New IRS rules require PayPal to report sales information

http://thenextweb.com/insider/2011/08/16/new-irs-rules-require-paypal-to-report-sales-information/ ^ | 8/16/11

[Nachum]

Due to new IRS rules, PayPal has started asking users to provide their tax ID number, which is either your Social Security number, Individual Tax Identification Number or your Employer Identification Number. PayPal says it will use your tax ID number to send tax Form 1099-K to you and the IRS when the payments you receive exceed both of these milestones in a calendar year:

$20,000 in gross payment volume for goods and services 200 payments

So for most occasional PayPal users, this change won’t be applicable, but you’ll still need to enter your tax ID just in case. Although, it’s important to note that the new law requires PayPal’s non-US subsidiaries to comply so any non-US account holders may need to certify their non-US status and address. If you don’t receive an email from PayPal asking for this, you’ll be prompted with the following message when you sign into your account.

[editor-surveyor]

>> “I did use them a couple of times and then - out of the blue - they demanded to have my banking information. That was in addition to my credit card number.” <<

.
They do not ask that anymore. You can use them all you want now and only have to give a valid credit card number.

[ladyjane]

They do not ask that anymore. You can use them all you want now and only have to give a valid credit card number.

Well then paypal is lying to me.

According to paypal, and they may be lying, you can sign up for paypal with just a credit card, but it's only for a limited time. Then you must become verified and give them access to your bank information or they will no longer process your transactions.

I do not trust paypal. No way would I give them access to any bank account.

[editor-surveyor]

Folks, this is not from paypal; it is a phishing email.

Just forward it to spoof@paypal.com so that they can catch all the participants in this scheme.

[editor-surveyor]

I use paypal heavily and I am not “verified.”

They quit asking that several years ago because so many people had misgivings. The only way you need verification now if if you are receiving a lot of money from sales.

[CodeToad]

So...not a real news story? (head down) OK, we’re sorry.

[YHAOS]

Interesting.

[warsaw44]

I thought it was because of the bad checks that buyers were sending.

---

No, not at all. I have been a seller on ebay since 1998. Prior to paypal everyone used checks, sent cash or money orders. Maybe two checks bounced in all the thousands I received. The buyers were mortified when notified and always sent a replacement check which a higher amount than owed.

Ebays total BS reason for requiring paypal infuriated me - still does.

Nothing was ever ‘ lost in the mail ‘ either and I mean nothing. Now, with paypal required and proof always needed for each shipment ( on-line proof ) you would be amazed how many packages just vanish into thin air. A simple “ the package didn't arrive “ email to paypal and they begin the process of freezing the money in your account and eventually giving it to the buyer.

Now ebay is charging sellers a fee on our shipping costs. They claim it is to make sure we sellers don't overcharge people on postage. Another BS reason from ebay - they want us to pick up the postage for the buyer.

Ebay is just a total PIA at this point.

[RandallFlagg]

If it’s fake, it might be helpful to add something like (Fake) in the headline.

Just a thought.

[warsaw44]

Last week I went to make a transfer from my paypal account to my bank account and was asked from the paypal site for my SS number as my sales exceeded 20,000.00.

[Future Useless Eater]

>> I agree totally, I wonder what would happen if you enter 999-99-9999.

No, using an SSN like 999-xx-xxxx is commonly done by universities or colleges such as Occidental College for foreign students.

Use 042-68-4425 instead. That one has been confirmed by Social Security Administration as having been never issued.

However, it would be best if you had a history of having lived in Connecticut in March 1977, because other numbers surrounding that one, were issued that month, and applicants who were 12 years old or more at that time had to apply there, in person.

[july4thfreedomfoundation]

Like you, I’m in Maine and I got both the e-mail and also the “prompt” when I logged onto to PayPal.

I ignored the prompt and went ahead and transferred some money in my PayPal account to my bricks-and mortar checking account. Didn’t have a problem....not yet anyway.

[ladyjane]

You keep saying that paypal does not ask for bank information or social security numbers.

Why do you continue to do so when there are a number of us who have personal, first hand information to the contrary?

PAYPAL DEMANDED THAT I GIVE THEM ACCESS TO MY BANK ACCOUNT INFORMATION!!!!

What part of that statement do you not understand? This was not years ago. This was within the week. This was after using them, on and off, for a long period of time and for scores of transactions.

Of course I refused to give them the information. Ebay and paypal lost a customer because of their attempted intrusion.

[Minus_The_Bear]

I think Bitcoin or something similar might actually catch on if this becomes mandatory.

Most people don't want to give over their Tax ID just to complete a simple PayPal transaction. That's idiotic. PayPal skims too much off the top already.

[GreatRoad]

Re: ‘Big Brother in the bedroom’. Im sure there is an IRS think tank trying to come up with ways to tax indoor sports, right now.

[ThomasThomas]

From my reading his a seller requirement. Not if you just a buyer. I guess they think people are selling goods in excess of $20,000 and not reporting it as income.

[GreatRoad]

I wonder if the IRS will tax all the dimes I picked up off the ground this year. I even found a ten spot to add to my sidewalk kitty.

[giotto]

What’s all the fuss about? If you’re selling more than $20,000 a year, you need to report the income to the IRS. It’s easier to do that than to worry about the consequences of not doing it. And as for giving your bank account info, the funds have to come from somewhere. Credit card info can be stolen, so PayPal requires a bank account to verify the identity of the user. If you only knew how many scamsters there are out there, you would realize this is the only way PayPal can protect sellers who trustingly ship their products to a total stranger.

[Tammy8]

It happened to me two weeks ago, after I have been a buyer for years...I was once a seller and had a specified bank account just for that and was verified. Then ebay made it so tough on sellers I quit selling and closed the account that was verified. As a buyer I had no issues with anyone and they demanded I give them bank account info two weeks ago before I could pay for items I had already purchased. I would not give them my info and used a green dot card to pay for purchases- then got an email that I can only use green dot for up to $150 or something like that and then I MUST give them info. Guess who quit shopping with ebay? Their customer service told me they are doing this to random accounts.

I think it is just ebay, I use paypal to pay other businesses online and have not had an issue. As a long time ebayer it seems to me they are trying really hard to run off all their sellers and buyers with all their recent rules...makes no sense to me.

[Humble Servant]

Curious to know where you went? When I daydream, I can’t come up with a place to go that isn’t at least as bad.

[ladyjane]

Interesting that it happened to you too.

I bought something and logged into paypal to pay for it. The computer screen said sorry the amount is above your limit. Sort of strange since it was a small purchase, under $50. So I called them and they gave me a story about how a credit card is sufficient for your first $2000. in purchases. After that you need to be verified.

I got laughing on the phone with the customer service person and said to her, “so once you have spent $2,000 with paypal and shown yourself to be reliable, only then you need to provide access to your bank account? That sounds backwards. It’s the unreliable ones who need to get verified. LOL”

Her response was, “I would think so but I just work here.”

I told her to close my account because there was no way I was letting them into my bank account. If I still have any ebay stock I’m going to sell it. They have a crazy business plan.