THE NEW PAYPAL EMAIL

tigercreekgifts · Posts: 6293

I have not received any emails from GCO or PP about this but, I already provided them with my SS number a long time ago for extra verification to get them to lift all of the initial monthly limits and restrictions that they placed on my account when I first started using them to collect payments for my sales 4 years ago. SO, it could be that some of us have not received those emails because we have already provided PP and GCO with our SS numbers, or it really could be a scam.

I NEVER give out any highly confidential information like this via email. I always go directly to the site and log in to double check, and if I don't have any messages about it or see any bulletins about it once logged in, I call the company directly to confirm the accuracy of the email.

thecheapskirt · Posts: 2123

WendysHomeAndGardenShop · Posts: 5

I don't see why they should require a SS # or Tax ID# or why they are creating 1099's. What if I were using my bank down the street to deposit checks for stuff I might be selling locally? Why is it the bank's business to assume (or figure out) if that is income-taxable or not? I think of PP just like a bank. Not a source of income to send me 1099s.

What am I missing?

thecheapskirt · Posts: 2123

Here is info from PayPal: https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W

Also, the Auctionbytes link up there explains it as well.

Also, this article: http://www.eidebailly.com/industries/financial-institutions/form-1099-k-filing-requirements explains the difference between Payment Settlement Entities (of which PayPal is one) and banks.

wtcollectibles · Posts: 2728

WendysHomeAndGardenShop · Posts: 5

Thanks for the perspective. Interesting. Yes, people earning income should be paying income taxes. But, it also seems wrong for the government to stick their nose in someone's "bank account".

I hope sellers don't turn to money orders or something else that is not as safe as Paypal/Google CO though.

Doesn't affect me, but I can relate on a smaller scale. There is often talk about states with sales taxes having access to credit card records to find out-of-state purchases. Wrong - wrong -wrong. I declare my out-of-state purchases on my state return and so be it.

wtcollectibles · Posts: 2728

TyreeTrading · Posts: 1608

Right now, any business/church/nonprofit must provide a 1099 for any individual they pay $600 or more during the course of the year. If it is a company, then they don't have to.

When the National Health Care Reform was passed, it included a provision that said 1099s were to be done for everyone, including businesses, with whom you expensed $600 or more during the year. Small businesses screamed loudly and eventually that portion was repealed. Imagine how many 1099s Comcast or AT&T would get from the companies they provide internet access or phone service for! The whole purpose was to catch those who run businesses and don't declare income or who under report income.

This whole PayPal thing is part of the IRS tracking down people who don't pay. The honest folks get scooped up in the same procedures.

WendysHomeAndGardenShop · Posts: 5

TyreeTrading · Posts: 1608

wtcollectibles -- That is probably true in every state that has a sales tax. It's one of the most ignored tax laws and state governments acknowledge it is.

I remember one of the big 'tax fraud' cases years ago was stores in New York City offering delivery service to New Jersey customers - only they didn't deliver, they just marked the receipt that way. All because New Jersey residents receiving the item delivered wouldn't have to pay New York/New York City sales tax. they were supposed to pay NJ sales tax but never did. New York City led the crackdown on that one.

The Streamlined Sales Tax inititive was created to collect sales tax on interstate sales based on delivery point. It hasn't made a lot of progress because of each state has it's own insane what's taxable/what's not taxable/different rates etc.

WendysHomeAndGardenShop · Posts: 5

TyreeTrading · Posts: 1608

Downsizing Diva -

the intent was to increase revenue to help pay for the program. And yup, because the lawn boy was running a business, he'd have taxable income.

wtcollectibles · Posts: 2728

Just so we don't get too politically off-track here, the 1099-K applicable to online selling was signed into law by G.W. Bush before he left office in 2008. So I don't know how much we can connect it to the health care plan..... Or maybe I'm misreading.
Question

TyreeTrading · Posts: 1608

We took a little detour...thank you for recalculating Very Happy

vintagecornerstore · Posts: 151

I think this whole thing is such a major boondoogle. The fact is, those people not reporting this kind of income will probably not be paying any tax even after they report these sales (remember, something like 49% of the people in the US do not pay ANY taxes, and this isnt' the rich people, either).

It is going to cost the IRS so much money to process all the paperwork, that I bet the net sum they collect will actually be negative. In my mind, it is just another truly ridiculous program put in place that looks good on paper, but is actually going to cost more than what is collected from it.

I've always reported it all, if for no other reason than to make me keep on top of all the business numbers at least once a year, but the way they are currently spending it makes me wish I had the guts not to! (War after war, endless entitlements ... oh well, we won't go there.)