A U.S. district court in California issued a John Doe summons for JustAnswer LLC to examine who has been paid by the company and if they are paying taxes on that income. File Photo by the U.S. Department of Justice/Facebook
Dec. 27 (UPI) — A U.S. District Court in California has allowed the IRS to serve a John Doe summons on JustAnswer LLC to determine if the digital platform’s experts are paying their taxes on money charged for advice they provide.
Customers have increasingly turned to these experts for help with a wide range of subjects, the government says. JustAnswer charges monthly membership fees to consumers who seek the advice.
The Justice Department said while the “on-demand” gig economy has provided new avenues for people with a variety of experiences to make money, it also allows them a chance to hide such payments to avoid taxes.
The court order, issued by U.S. District Judge Dolly Gee of the Central District of California, found that “there is a reasonable basis for believing” that experts who have been paid by JustAnswer failed to pay income tax on that money.
“There is no indication that JustAnswer has engaged in any wrongdoing in connection with its digital platform business,” the Justice Department said in a statement.
“Rather, the IRS uses John Doe summons to obtain information about individuals whose identities are unknown and who possibly violated Internal Revenue laws, such as by not reporting income they received.”
Justice Department officials said like well-known apps and digital platforms like Airbnb, Uber, Lyft, DoorDash, and Esty, it can be difficult to keep up with transactions and what should be paid in taxes.
“The gig economy has grown in recent years and with it, the concern for tax compliance issues has increased,” Deputy Assistant Attorney General David Hubbert, of the Justice Department’s tax division, said in a statement.
“This John Doe summons demonstrates that working with the IRS we will use all the tools available to us to ensure that no matter how U.S. taxpayers earn income, they are properly reporting it and paying their taxes.”