A lovely note from PayPal....

Raufus · August 31, 2011 2:18AM

I received the below note from PayPal today. I thought it was a spoof. Then, I logged into my PayPal account. It's the real deal. Clearly I missed something.

WHEN did this start??

WHY did this start??

Any info appreciated.

I will note that I'm one of the sellers - even though it's mostly a hobby for me - who has always reported coin selling profits anyway. This seems so over the top. Yet another of the endless hassles to the private sector.

----------------------------------------------------------------------
Please provide your tax ID number
----------------------------------------------------------------------

Dear

We're asking for your tax ID number due to new IRS rules. Your tax ID
number is one of these:
- Your Social Security number
- Your Individual Tax Identification Number
- Your Employer Identification Number

We'll 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

We want to help you continue to sell with PayPal and to avoid any
interruption to your account. It's easy — here's how:
1. Log in to your PayPal account.
2. A message will appear asking you to update your information.
3. Click Provide Now.

If you have multiple PayPal accounts, repeat these steps for each account.

We appreciate your help in complying with these IRS rules. For more
information, please see our FAQs on the IRS reporting requirements:
www.paypal.com/irs

Sincerely,
PayPal

ctf_error_coins · August 31, 2011 2:21AM

Got the same one. It official you are now in the coin biz

I reported mine last year as I knew this was coming.

Welcome to the world of coin dealers.

AMRC · August 31, 2011 2:22AM

It has been on their site for months and months.

Russ · August 31, 2011 2:31AM

Is it damp in your cave?

Russ, NCNE

mingot · August 31, 2011 2:36AM

<< I will note that I'm one of the sellers - even though it's mostly a hobby for me - who has always reported coin selling profits anyway. This seems so over the top. Yet another of the endless hassles to the private sector. >>

I don't enjoy the hassle of having to report my income to the IRS, either. It's a real bummer and a real drain on my bottom line.

devious · August 31, 2011 2:36AM

A great link for this:

explanation of what the OP references from PayPal

Raufus · August 31, 2011 2:39AM

I don't go around looking at the PayPal site. Obviously I missed this.

Why was this instituted? Does anyone know what legislation this was part of?

Seems like another boondoggle like the 1099 for all transactions over $600 and something which was thankfully voted down on a bi-partisan basis. This foolishness seem ripe for the same legislative treatment.

airplanenut · August 31, 2011 2:39AM

<< I will note that I'm one of the sellers - even though it's mostly a hobby for me - who has always reported coin selling profits anyway. This seems so over the top. Yet another of the endless hassles to the private sector. >>

So you'll get a 1099 and your records will show exactly where the money went, so you'll have to do nothing extra.

Raufus · August 31, 2011 2:40AM

<< A great link for this:

explanation of what the OP references from PayPal >>

Thanks for the great link!!!!

devious · August 31, 2011 2:45AM

It was pretty much added to the healthcare fiasco.

Russ · August 31, 2011 2:45AM

<< I don't go around looking at the PayPal site. Obviously I missed this.

Why was this instituted? Does anyone know what legislation this was part of?

Seems like another boondoggle like the 1099 for all transactions over $600 and something which was thankfully voted down on a bi-partisan basis. This foolishness seem ripe for the same legislative treatment. >>

The 1099 was a boondoggle, a seriously stupid move. This reporting requirement is not. It's something that should have been done long ago. It causes no additional work for the seller, and the only people it negatively impacts are the tax cheats.

Russ, NCNE

Bankerbob56 · August 31, 2011 3:06AM

I am HAPPY to see entities paying the appropriate taxes!!!

If EVERYONE paid their fair share I think my taxes would go down!

Just to keep it coin related, I don't advise anyone trying to pay their taxes in COIN!!!

UtahCoin · August 31, 2011 3:08AM

Got it too a few days ago.

I used to just list my profits as miscellaneous income. Now more paperwork....

silverman68 · August 31, 2011 3:08AM

I have confirmed you have to hit BOTH the $20,000 and 200 MONEY IN transactions. Called to verify myself.

RichR · August 31, 2011 3:12AM

We'll 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

I have a question...from the wording of this, you need to exceed BOTH 200 payments and $20,000 in payments to trigger the notification...which seems odd. So let's say you have $100,000 in sales spread over only 50 sales...you don't get a form? That seems strange.

OPA · August 31, 2011 3:15AM

In order to avoid a 1099...sell less than $20k per year with less than 200 PayPal transactions...I'm still not sure if "PayPal gifts" are counted. But any other funds transferred to your PayPal accts. i/e big crumbs do count or possible refunds of returned items.

OPA · August 31, 2011 3:16AM

<< We'll 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

I have a question...from the wording of this, you need to exceed BOTH 200 payments and $20,000 in payments to trigger the notification...which seems odd. So let's say you have $100,000 in sales spread over only 50 sales...you don't get a form? That seems strange. >>

I don't believe so...it's either one or the other.

Russ · August 31, 2011 3:18AM

<< We'll 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

I have a question...from the wording of this, you need to exceed BOTH 200 payments and $20,000 in payments to trigger the notification...which seems odd. So let's say you have $100,000 in sales spread over only 50 sales...you don't get a form? That seems strange. >>

I think they did that based on the assumption that, regardless of dollar amount, transactions below a certain threshhold would be less likely to be a taxable business. One of the things the IRS has to consider when pursuing revenue is the cost/benefit ratio. In other words, the conclusion may have been that lower transaction numbers might not yield enough to justify the compliance expense.

Russ, NCNE

Russ · August 31, 2011 3:19AM

<< I don't believe so...it's either one or the other. >>

No, it's both.

Russ, NCNE

OPA · August 31, 2011 3:25AM

<< 

<< I don't believe so...it's either one or the other. >>

No, it's both.

Russ, NCNE >>

Thanks, Russ...I wasn't 100% sure about that. Any idea if they count paypal gifts or credits?

mrearlygold · August 31, 2011 3:29AM

YOU WILL PAY

jfoot13 · August 31, 2011 3:52AM

I sell everything for less than I paid ( or so it seems ) so I guess this is a good thing

Zubie · August 31, 2011 3:56AM

Any way to get a complete history from Paypal for the year 2010? Looks like they only allow last 3 months history?

johnny9434 · August 31, 2011 4:15AM

amazing world of ebay

Russ · August 31, 2011 4:19AM

<< amazing world of ebay >>

This has nothing to do with eBay. Anybody who sells anywhere and accepts credit cards is subject to the same rules.

Russ, NCNE

RichR · August 31, 2011 4:20AM

No jioke...I'm still writing off losses accrued from Worldcom's implosion back in 1999...at the pathetic rate of $3000/year.

Capital gains...ha...surly you jest...and don't call me Shirley!

OPA · August 31, 2011 5:58AM

<< Any way to get a complete history from Paypal for the year 2010? Looks like they only allow last 3 months history? >>

2010 is not the issue...the 1099 reporting starts for the year 2011. I have no idea where PayPal is hiding that info, it sure isn't available to the account holder

PerryHall · August 31, 2011 6:15AM

<< If EVERYONE paid their fair share I think my taxes would go down! >>

Are you serious?

MsMorrisine · August 31, 2011 6:40AM

<< 

<< I don't go around looking at the PayPal site. Obviously I missed this.

Why was this instituted? Does anyone know what legislation this was part of?

Seems like another boondoggle like the 1099 for all transactions over $600 and something which was thankfully voted down on a bi-partisan basis. This foolishness seem ripe for the same legislative treatment. >>

The 1099 was a boondoggle, a seriously stupid move. This reporting requirement is not. It's something that should have been done long ago. It causes no additional work for the seller, and the only people it negatively impacts are the tax cheats.

Russ, NCNE >>

This required move on PayPal's part has been discussed here before.

Now they are acting on the reporting requirement.

I have to agree with Russ. My only concern here is the data safety. As of right now, I'm certain my data will be stolen from PayPal at some point in the future.

Any other concerns are those of the tax cheats. And the brokerage houses are now going to be reporting cost basis on their 1099s. Now the IRS knows what you paid and what you sold.... not just what you sold. I'm surprised this also wasn't taken care of a long time ago.

JustaRookie · August 31, 2011 6:40AM

<< 

<< If EVERYONE paid their fair share I think my taxes would go down! >>

Are you serious?

>>

Taxes are like toll roads they never go down or away.

pf70collector · August 31, 2011 6:45AM

Any way to get a complete history from Paypal for the year 2010? Looks like they only allow last 3 months history?

Click "statements" tab, then click on "go to history" on top right. You can input the dates there.

MsMorrisine · August 31, 2011 6:48AM

<< 

<< 

<< I don't believe so...it's either one or the other. >>

No, it's both.

Russ, NCNE >>

Thanks, Russ...I wasn't 100% sure about that. Any idea if they count paypal gifts or credits? >>

You know... gifts over a certain amount are taxable.

You all know I'm a moron sometimes and am not a tax pro, but it'd seem that gift pament would be excluded from 1099 reporting.

OTOH, there are points where gift become taxable and the law should probably make PayPal report such things as well.

Here is a blurb I found:
Basics about gift tax limits

You may give any one person up to $13,000 in total gifts without filing a gift tax return (from 2009 – 2011). This limit includes all gifts for the year, not just money or property. It includes birthdays, graduations, holidays, etc. (The limit was $12,000 from 2006-2008; $11,000 from 2002-2005.)

For 2011 to 2012, the lifetime exclusion from gift taxes has risen to $5 million. During the 2005 to 2010 period, the lifetime exclusion on gifts was only $1 million dollars. Gift tax rates for taxable gifts have ranged from 47% in 2005, to 35% currently. Barring new legislation, the gift tax exclusion will revert to $1 million in 2013, with a tax rate of 50%. (50 freaking percent on an already income taxed gift??? are they nuts??)

How can you avoid getting caught in the IRS’ gift tax compliance trap?

Look back at any properties or assets you changed title on in the past five years for any reason. If you transferred assets, or parts of assets, to anyone at all, make sure a gift tax return, Form 709, was filed, when needed. Married folks must each file a separate Form 709. There is no such thing as joint Form 709.

You can avoid gift tax returns altogether if the asset’s value was less than the annual limit. If the asset value was higher, there are still ways around the gift tax. But you will have to file the gift tax return.

MsMorrisine · August 31, 2011 6:49AM

<< YOU WILL PAY

>>

one of my favorite episodes.

OPA · August 31, 2011 8:19AM

<< Any way to get a complete history from Paypal for the year 2010? Looks like they only allow last 3 months history?

Click "statements" tab, then click on "go to history" on top right. You can input the dates there. >>

Thanks...

A lovely note from PayPal....

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