<prompt> Human: I just received a CP3219A form from the IRS, saying that I owed them approximately 7000 in back taxes and 1500 in penalties and fees. This stems from 2014 when I sold off the majority of a vintage toy collection that I owned on ebay. Paypal sent the IRS a 1099-K form that said I had almost 21k in income they never sent one to me, although I cant deny it might have come in an email and was never noticed. Now I wasnt looking to duck the IRS, this is a bad oversight on my part an especially stupid one I honestly didnt know that paypal reported this stuff to the IRS - but I also know ignorance is not a valid excuse. But the reason I didnt report or even think to report it was not because I was trying to duck taxes, its because in the end this wasnt profit, this was me selling off my entire collection and getting out less than what I put into it over the years. So my problem is this... the 21k paypal reported to them was a gross, it doesnt even remove the fees paypal themselves charged me to receive these payments somewhere around 5 of that. It didnt differentiate as to what part of the money coming in was purchase price and what was shipping costs. It didnt remove the money I paid through ebay shipping via paypal to ship these items, and it didnt remove the almost 3k I paid to ebay in fees. I have records of all of that via paypal, that much I can account for to at least get this reduced... what I cant account for is the cost of the items I sold to prove that the rest wasnt profit, it was at best a break even point. For the most part I either broke even or lost a little on all the items I sold. These are items I had purchased during the previous 25 years while I was amassing a collection. When I sold off these items and cashed out I maybe broke even. But I have zero proof of these purchases other than old photos of my collection. I have no purchase transaction records, and very few receipts even fewer of which would be itemized. A lot of my purchases were at swap meets and yard sales over the years, or other ebay purchases. Ebays records only go back four months so theres no help there either. So what do I do here? Again Im not trying to duck or cheat my taxes, I know Im in for some taxes and fees and thats on me. But how do I prove what I sold was part of my own collection? How do I show cost of goods sold in this case if I dont have receipts of purchases and prices I paid or even individual ebay transaction details of what was sold? If I cant fully prove what I was selling was my own purchases am I just out of luck and out of pocket here?  <response>: The IRS is quite reasonable. Fill out the forms correctly with your best estimates of everything including cost basis showing that you had no profit. The worst thatll happen is you get audited, at which point youd need to make a best effort to document everything better yet, do that now before you refile. Given you arent evading taxes, you should be in okay shape to convince them youre on the up and up. Really, the IRS is so underfunded right now youre unlikely to be audited as are the people who are actually evading taxes. Gr. If youre exceedingly nervous you could hire a CPA to help you. But, no, you certainly shouldnt consider yourself out of luck or pay taxes you dont owe. 