Ding Dong...IRS Calling

IRS Calling

IRS Calling

Paypal Related: Sigh...just got off the phone~ about the 1099K stuff and my SS# Posted by Debwest on 10/21/2011, 11:20 am 98.124.91.x

Ok..I got the dreaded email from Paypal requesting my tax identification number. So....being the stubborn thing that I am, I called and asked questions because I did NOT want to give Paypal any tax identification information at all. My Paypal is not a revenue stream it supports my doll habit.So, I asked questions and got some valid answers: 1) Why are there confusing statements about what the IRS rules mean on your website. When you are notified about the need for the Tax information there is a banner notice placed on your account. When you open the banner it gives two caveats about the reason for the infomation  a) $20K in gross payment volume for goods or services b) 200 payments for goods or services.When you query the Paypal site for IRS you pull up the following statements a) $20K in gross payment volume from sales of goods or services in a single year b) 200 payments for goods or services in the same year. The "Specialist in IRS questions" told me...yes, that is true. We had a nice discussion about how those statements were both from the Paypal site and they were in conflict with each other. She did not understand why I felt them to be conflicting. I explained: one statement declares you look at gross payment volumes of sales of goods and services  (this would be money received for transactions)  The other statement declares you look at gross payment volumes for goods or services (this would be gross transactions buying and selling) She finally understood my point. She agreed that the statements were conflicting and definately confusing. I also pointed out that the 200 payments in both areas could be interpreted as transactions (buying and selling). She said that the 200 payments were for received payments. I suggested that Paypal consider changing the language to keep the statements from being confusing. If Paypal would add the word "received" then there would be much less confusion. Because I was very specific with my concerns and was able to point out the exact language in the two areas on the Paypal website, she filed a report to clarify the language used.  What the IRS and PayPal are using as the guideline for Paypal reporting the 1099K is the following: a) $20K in gross payments received from the sales of goods or services b) 200 received payments for goods and services You must meet BOTH criteria for Paypal to generate the 1099K The next part of our discussion was also relevant because it concerned giving my tax identification number to Paypal. Beginning January 1, 2012 Paypal will require your tax identification number if you use your paypal account to sell items. In other words, if you receive any money at all in the category of goods or services you will need to provide your tax identification number. If you are not willing to provide the information, Paypal will take action to prevent you from using the account to receive money.  I didn't ask how they intended to do that. The specialist was more than happy to provide me with my running total of my received gross volume so I could decide whether to stop using paypal until the January 1 refresh. I am in no danger of meeting that standard  whew. Thank you to Prego and debwest for this Vital information and I urge you to click onward to thread which follows with much more information on this very important but political topic.