TAX ID Hold. Spent an hour on the phone with the IRS.

[GPH85]

Just spent an hour on the phone with the IRS and talked to 3 different agents. They told me in no way shape or form to give Paypal my tax ID number. That was for them, myself and an accountant if needed. They also told me that Paypal shouldn't be with holding anything in regards to this. Does Paypal know something the IRS doesn't? I've tried contacting Paypal by several different means and either get a bot responding that kicks me off or a message system that puts me on hold and hangs up after 15 minutes. Don't feel right giving paypal something the IRS tells me not to especially after having a card stolen from their site. I've currently got funds on hold by Paypal because of this too. Just trying to get a legal answer.

[sharpiemarker]

@GPH85 

PayPal is required to collect tax ID so they can issue 1099-Ks at the end of the year if you meet the 200 transactions/$20k thresholds of goods and services transactions unless you’re in the 4 states that have lower thresholds so whoever you were talking to have no idea what they talking about. The tax ID is however collected through your PayPal account. Not by phone, not by email. If your account alerts you to provide tax ID, just go into your Settings page to enter it there.

[Whonosenemore]

This doesn’t fix the problem. This is why the problem exists

[Ducatista]

Hi, I'm having the same problem with funds getting held by PayPal, except that I did add my social security number to my profile  to get the funds released, and after 7 days, PayPal is STILL HOLDING THE FUNDS!!! (the site says it should only take 15-30 min for the hold to be removed and funds released).

I've been on the phone twice now with PayPal customer support who say that this is a known and unfortunately intermittent bug where people are entering their tax ID info and the funds are still not getting released. PayPal needs to fix this ASAP for people getting paid through them as freelancers or running their business and needing cash flow to operate—and not to have funds blocked by PayPal! I have an open ticket for my case which has been sent to the "back office" for resolution...will try to keep you posted on what happens.

(Oh, and edit to this post): I meant to also clarify that some time in the last year or so since I've been getting paid as a freelancer via a service using PayPal to clear funds, PayPal has now revised their threshhold from $20,000/200 transactions down to $600 for the point at which they need to issue a 1099 (like every other tax paying entity in the US). On the one hand this is better bc I had to report a large amount of income to the IRS last year that had no paper trail bc I didn't meet the $20K threshhold of funds coming from PayPal...which seemed sketchy come tax time and getting documentation to my accountant and IRS. Glad my accountant said to go ahead and report it as the IRS would eventually catch up to figuring it out.

[jbrinson99]

@Ducatista 

Did you get this cleared up? How long did it take? Dealing with same issue now.

[Ducatista]

@jbrinson99 it finally did get resolved...but I was on the phone for an hour two separate times with customer support who only came through when I really pressed them to pursue the issue with the "back office". It did take a full seven days from the time it should have been released (PayPal's claim is that once the tax id is entered, payment will be released within minutes). I think part of the problem was that the process glitches on personal social security numbers, and doesn't get hung up so much on EIN Numbers (Business Tax IDs). If you can get a real person on the phone, that'll be your best bet. Take names so you can follow up with the same person hopefully and let them know you'll keep bugging them until it's fixed! 

[TaxID15MinLie]

Since May 25th I’ve been begging PayPal nearly daily in calls and emails via their site to release the funds they promised would be released in “15 minutes” after I provided my SSN#. PayPal also stated the funds would be released “in 15-30 minutes”, “in 3 days”, “ immediately”, and “by June 10th”. PayPal has told me their “back office” was resolving their “technical issues” and “don’t worry”, but I need the funds they are holding indefinitely, because our family is dealing with an urgent medical issue and time is of the essence. PayPal reps just apologize and admit that they are in the wrong, but yet they do nothing to release the funds. It’s like being mugged on the street and having the mugger apologize and expect that justifies taking my money from me. Can you tell me the steps you used that got PayPal to perform their responsibilities as a payment platform by returning your money to you?

[sharpiemarker]

@Ducatista 

On the one hand this is better bc I had to report a large amount of income to the IRS last year that had no paper trail bc I didn't meet the $20K threshhold of funds coming from PayPal...which seemed sketchy come tax time and getting documentation to my accountant and IRS. Glad my accountant said to go ahead and report it as the IRS would eventually catch up to figuring it out.

I wouldn’t say there’s no paper trail unless you did cash transactions and didn’t keep track. But you did at least have a bookkeeping of the transactions and expenses, right, so that wouldn’t technically mean no paper trail at all.