requesting Tax id number for IRS

[granola]

Has anyone received the following message on their Paypal "My Account" page.  I received an email requesting my tax id number or SS number several weeks ago. I immediately forwarded it to Paypal and they said it was a scam.   This message showed up on my account page and has stayed there and I am continuing to get emails requesting the same.  Any help?   Thanks.

***Please provide us with your tax ID number. Your tax ID number lets us
send you Form 1099-K, as required by the IRS under certain conditions. Find more
information about the new tax rules and why we need your tax ID at
www.paypal.com/irs. Provide
your tax ID number now.***

[Numyfila]

Hi Andy and whoever can help me,

I have an Argentinean PayPal account. So, according to what you've been saying, I do not need an IRS number, right? I don't even have the option to insert it and I haven't been warned about this.

The thing is that I have a Spanish eBay account but I always publish in the US eBay (since it reaches more buyers than others). And US eBay has blocked me from publishing and it's threatening with finish all my active listings if I don't enter the IRS number... What can I do?

Please, help me!!

[suzylaquay]

Hi, Paypal_Andy.  I hope you can answer my question as I keep getting the emails requesting my tax ID and can't get answers.  first of all, I likely have over the 200 transactions, but am nowhere near even the $10,000 mark.  I don't have a tax ID and would have to provide my SSN.  There is no way I wil meet the outlined threshholds, even if the math Paypal is using is based on trends.  I do not want to provide my SSN or any other unnnecessary personal information given the fact that I'm not in any way going to meet the threshold.  Why would PayPal limit my account access given these circumstances?  It's really against common sense...

[Able]

Sorry, but the information I see paypal Andy providing on the requirement for Taxpayer ID is incorrect.

A 1099-K is to be prepared only for sales exceeding $20,000 AND 200 transaction per calendar year. BOTH thresholds have to be met.

There is no requirement by the IRS for Paypal or similar entity to collect Taxpayer ID information prior to meeting the above.

I think it would be prudent for Paypal to research the topic a bit more carefully and cease threats of restricting account usage and/or threats of Backup Withholding.

I don't see where it serves the best interests of Paypal or Paypal users to go down this road.

ID theft is rampant and any data base on any server is not secure enough, so why ask for information that is not necessary in complying with IRS regs.?

[celebrations]

I agree. They shouldn't ask until you either hit the limit or are really close, and I know many who weren't. Also, I believe they really need to provide a simply way to know where you stand - not some work-around where you have to jump through hoops to find out.

[PayPal_Andy]

Able- You are correct; you need to hit both thresholds before we report your income to the IRS.  But this tread started as a question as to why we request the information before you hit it; I never specified one way or the other.  We do need to ask for that information before you hit the thresholds though.  There would be some...difficulties...if we have to report the income but you refuse to provide the information so we can report it.  Therefore, if we see that it's possible you'll hit reach those levels, we need to start preparing ahead of time.

Andy

[Dreamer7]

Hello . A good question as well is what is considered gross payments?  Does Paypal use the "monthly sales report" in a users history to figure this out? 

 Also had a question about funds being held for 21 days and the 20,000 threshold. I notice what happens here is that the person pays for the item, example $20, that goes towards the gross amount. Then if the funds are held for 21 days, the net of that gross amount is held for 21 days, say about $19 net. Now, when the money finally clears after 21 days, I notice that it is released to the gross amount and not the net. So with that said, does Paypal put both of those transactions towards the 20,000 threshold for a total of $39? Or is it just the original gross of $20 that's counted? I ask this because in the monthly financial summary, all of the payments that were held are now on the credit side were it says "Payment releases". 

Also, are cash back bonuses from using a Paypal card counted towards it? And what about transfers from a bank account into Paypal. Are these all counted towards the 20,000?  Thanks!!! And sorry for all the questions, but I haven't seen them answered before.

[Dreamer7]

Hi Andy, if you could be so kind as to answer these few questions, I'd be very grateful. I guess my main questions would be if when those "payment releases" are taken off "Hold" and the Net amount put back in my account 21 days later, is that amount added to the $20,000 as well? That would almost be doubling the amount of one transaction. $20 now became $39 since it was put in my account initially, then taken out to be put on hold and then the Net put back into my account 21 days later.  I really need clarification on this since I'm trying to figure my amounts for the year and don't know whether to add it towards the gross or not. What's more confusing is that in the "Monthly Financial Summary Report", the payment releases show up in the credit column. Is the  release amount just there for reference? Do I go by my "Payments Received" for the gross amount and nothing else? Also, does the monthly cash back from using your Paypal card add in to the equation?

[celebrations]

And yet, my point still is - PayPal really shouldn't not be able to request this information without providing a simple, easy, straightforward, one-step way to see what they are basing their request on. The work-arounds Andy and others have come up with are just that - work arounds and obviously NOT what PayPal is doing. PayPal obviously has some report that they are basing this whole thing on and without providing me, the user, with that information so I can see also see it I fail to see the legality of their request. They're asking me to simply trust them without providing me basic information. I should not have to guess at what they are seeing. This simply sounds like a lawsuit waiting to happen.

[Dreamer7]

Hi Andy, if you could be so kind as to answer these few questions, I'd be very grateful. I guess my main questions would be if when those "payment releases" are taken off "Hold" and the Net amount put back in my account 21 days later, is that amount added to the $20,000 as well? That would almost be doubling the amount of one transaction. $20 now became $39 since it was put in my account initially, then taken out to be put on hold and then the Net put back into my account 21 days later.  I really need clarification on this since I'm trying to figure my amounts for the year and don't know whether to add it towards the gross or not. What's more confusing is that in the "Monthly Financial Summary Report", the payment releases show up in the credit column. Is the  release amount just there for reference? Do I go by my "Payments Received" for the gross amount and nothing else? Also, does the monthly cash back from using your Paypal card add in to the equation?

[suzylaquay]

Hi, Paypal_Andy.  I hope you can answer my question as I keep getting the emails requesting my tax ID and can't get answers.  first of all, I likely have over the 200 transactions, but am nowhere near even the $10,000 mark.  I don't have a tax ID and would have to provide my SSN.  There is no way I wil meet the outlined threshholds, even if the math Paypal is using is based on trends.  I do not want to provide my SSN or any other unnnecessary personal information given the fact that I'm not in any way going to meet the threshold.  Why would PayPal limit my account access given these circumstances?  It's really against common sense...