Big news: One-year reprieve on 1099 reporting for ebay etc.
 

From the WSJ:

"The Internal Revenue Service on Friday gave millions of Americans a one-year reprieve on new tax-reporting requirements, delaying implementation of a law that requires e-commerce platforms such as eBay, Etsy and Airbnb to give the tax agency information on users with more than $600 in revenue."

Sorry that's a paywalled source, I'm sure there's other coverage.

That is complete BULL SHIP. Those A-Holes ruined my chances of finding new to my collection Wade Boggs bats for no reason. Because of this needed change many stopped listing on eBay and that made all of us suffer with less choices/listings.:mad:

The supply/demand for Tony Gwynn bats has remained strong...

Brian

LOL, I wouldn't know anything about that.:)

I mean, this basically had to happen.

There would've been hundreds of thousands of people who refuse to pay or straight up don't. Imagine the legal proceedings to that happening. It would basically be the people vs the government, and they definitely don't want that.

Does the head of the IRS have the legal authority to ignore Federal Law? Since this clause was used to further spending, I'm not sure if anyone except Congress can amend the law. Coming soon to the Supreme Court?

Will this trigger a slew of BINs between now and the new year?

That would be cool to see.

The IRS is not ignoring the federal law, they are simply using their discretion to delay the implementation of it due to the situation and issues it creates for taxpayers, those having to prepare and report/file these 1099s, and the IRS' epic work backlog and shortage of people right now. People can criticize the IRS all they want, but the truth is they are simply doing the best job they can with what is being handed to them by the government, from politicians that typically don't really have a clue when it comes to taxes and what they are doing to people and the IRS when they pass legislation. And I am not saying or accusing you personally of criticizing the IRS, just speaking of some people in general.

Despite the recently enacted budget boost the IRS is to receive over the next 10 years, about half the federal government seem to have politicized that, with some having accused the IRS of being on the verge of going out to attack and harass the lower- and middle-class taxpayers of this country with scores of new auditors. Basically, all unfounded lies. This same half of the government to my understanding also recently pushed through a current year drop in IRS funding as a tack-on to another bill that needed to be passed. Typical government crap, and therefore, this coming current year is even going to be more underfunded and understaffed for a bit yet. Additional reasoning possibly behind the IRS decision to delay this new law's enactment. To throw this additional reporting burden onto the IRS, taxpayers, and everyone else involved right now, is just too much given the current economy and what is happening. It seems to me the IRS is simply trying to be as realistic and manage the situation they were dealt, as best as possible.

This change in the reporting laws was actually passed back in the Spring of 2021, so it is not like there wasn't ample advance warning and notification for people and businesses to have the necessary time to get ready for the new reporting threshold. I am thinking part of the reasoning behind the IRS postponement announcement is that they themselves aren't fully prepared and able to be as ready for this change and increased workload they're going to face from it either.

Regardless, the delay of the lowered reporting threshold does NOT absolve any taxpayer from reporting and paying their proper tax due on any net income/gain they had during this past year, simply because they don't get a 1099 sent to them. As noted in this accompanying CBS story, taxpayers are still supposed to report their income for tax purposes, whether they receive a 1099 or not.

https://currently.att.yahoo.com/fina...190100084.html

There would not be a a ton of legal proceedings as a result. If taxpayers getting these 1099s simply refused to report them on their tax returns, or pay any tax resulting from them, the IRS simply assesses them the tax due based on what they know, which is only the amount reported to them on the 1099. It will be up to the taxpayer to report the gross income from the 1099s they receive, and then they can show the offsetting deductions and such to actually lower their taxable income/gain to the proper amount. It is the taxpayer's responsibility to properly report their taxable income to the IRS. The IRS doesn't have to take anyone to court to do this and to commence collection activities.

Meanwhile, taxpayers thinking they can take the IRS to court over this is a joke. Doing so would be the same as taxpayers taking the IRS to court over being required to pay taxes on the income reported on their W-2s. This isn't really about any new tax laws at all, just the requirement for third parties to report the results of taxpayer activities to the IRS for better enforcement. Any taxpayer taking the IRS/government to court over this is basically someone trying to cheat the system and not pay their taxes that are due. Remember, the law is that even without a 1099, the taxpayers are still required to report and have their net income/gain properly taxed.

I sell about 30-40K a year on ebay. Certainly not a big seller but it's a nice side gig. I guess I just never got all this tax worry. Be honest. Report what you bought for inventory. Report what you sold. It all works out.

A non paywall link
 

Call it economic evolution -

Government wants new revenue streams and now hobbyist, dealers and the like are going to find a new way to circumvent.

Now what?

When the price of a baseball card reaches a million bucks and people in government read about it, then the light bulb turns on. Probably also happens when law enforcement is called to resolve all these "collectible/memorabilia" issues of fraud. Just think, by taxing the crap out of everything for the collectible/memorabilia community, maybe they can actually start digging into some of these issues. Ok, probably not... :p

Thank God I flipped that Hunter B painting last week. Guess I am golden. Couldn’t resist.

Just thought I would post this so folks can be on the lookout. Just received a 1099-k from Ebay. I'm over the $600, but less than the previous $20k/200 transaction reporting limits so it looks like while Ebay is not required to send the 1099-k, they are still doing so anyway.

Similarly, I received a 1099K from Paypal last week. Oddly, it appears to include the Friends and Family payments I received last year.

Nothing like taxing people on things that should not be.

I used Venmo, ppff, and cashapp every holiday season to collect donations at work to "adopt" several children as a secret Santa. These donations can total several thousand and myself and a few others would do shopping for each child, wrap and deliver new clothing, winter clothes, and of course toys to these homes. I never made a penny on this and in fact usually lost hundreds, but did not care.

I switched jobs this year and have not organized this of yet. Really happy to know that in their zeal, PayPal feels I need to not do this as the PPFF money needs a gratuity to the irs and myself having to somehow document that all these purchases are for gifts...I am not a 501c, I am just trying to frickin' help.

Of course we all know that people can abuse it. But while in college I sent my son thousands over those years for food and supplies, was he supposed to explain on a return that his dad was giving him pizza and book money?

If that is indeed true, it is an absolute travesty.

Bob C, I expect you will add...I just want to vent as these are unnecessary complications and will absolutely discourage me from using this service. I was using it correctly and now per this information, correctly is not good enough. Garbage, absolute garbage.

No good deed goes unpunished!!

Now I could not resist..
 

no, you are not golden....you are Goldin.

In response to the people posting about how they received 1099-K forms for 2022, but did not meet the $20k of sales and 200 transaction thresholds, first off, I don't know what state(s) you live in. There are some states that have had their own, already reduced 1099 reporting thresholds in place prior to now. During earlier threads where this reduced federal threshold requirement came up and was being talked about, other members had posted about how they were already getting 1099-Ks at lower thresholds because of where they lived in prior years as well.

Here's a good, concise article that summarizes and shows the states and their various reporting threshold requirements, specifically as they relate to 1099-K reporting.

https://sovos.com/blog/trr/irs-delay...es-until-2023/

You'll also note that in this linked article, it emphatically states that the 1099-K reporting requirements specifically call for only Goods & Services payments made through TPSOs (Third Party Settlement Organizations), like PayPal, to be included on 1099-K forms. PayPal Friends & Family payments, or other such non-taxable payments received through other TPSO platforms, should not be included on any 1099-K forms issued for the year 2022.

For the first poster that got a 1099-K form without having reached the $20K/200 transaction threshold limit, check the linked article to see if the state you are in has one of the lowered 1099-K reporting threshold requirements. If so, that probably explains why you still got a 1099-K form. Now if you do not live in one of the states with a lowered reporting threshold requirement, you may want to contact PayPal, or whoever it was that sent the 1099-K form to you, and ask them if it was somehow sent to you in error? It is possible this was a mistake on the issuer's part, and they never intended to send you a 1099-K form for 2022. But don't forget, the deferral of the lowered 1099-K reporting threshold requirement only happened just before Christmas. I'm pretty sure all the TPSOs out there had already updated and put their systems in place to prepare and send out 1099-K forms to everyone for 2022 based on the lowered reporting threshold limit of just $600. This very sudden, last-minute change can easily have caused confusion, issues, and mistakes to occur within some of these big TPSO organizations, to the point where their automated systems may have mistakenly gone ahead and automatically mailed out some 1099-K forms that they really didn't have to. By checking with the TPSO that sent you the 1099-K form you got, they hopefully can tell you if the form was mistakenly sent to you, and assuming that is what happened, you can then ask if they also mistakenly sent a copy to the IRS as well already. With luck, if they did err in sending the 1099-K form to you, they may have already caught their mistake and corrected their system(s) so as to not also send unnecessary 1099-K forms on to the IRS.

However, even if you actually did end up making/receiving less than the prior year's $20K/200 transaction threshold limits, so you didn't really need to have a 1099-K form sent to you for 2022, just remember that the law is merely to force TPSOs to report and issue 1099-K forms once a certain level of sales/transactions was reached. There is NO rule or law that says the TPSO can't still issue a 1099-K form to anyone that comes in below those threshold limits. So even if the TPSO you got a 2022 1099-K form from didn't need to send you one, they could still do so if they wanted. And there isn't a darn thing you can say or do about it as long as the amount(s) they reported on it is/are correct. So again, try calling the TPSO that issued the 1099-K form to you and find out if it was an error, or maybe them just deciding to go ahead and start using the lowered reporting threshold for reporting purposes anyway. As I mentioned, they probably had already set up their entire automated systems to calculate and report everything based on the lowered reporting threshold already, and maybe figured it was even more work and bother for them to try and change everything back at literally the last minute. The big thing you want to try and confirm though is if the TPSO does admit to not having needed to send you the 1099-K form, are they still the going to forward a copy of it to the IRS as well. If they cannot, or will not, either confirm or deny they will be forwarding a copy to the IRS, you need to think long and hard about being safe, and smart, and being sure to report that 1099-K income somewhere on your 2022 federal income tax return. Remember, legally you are supposed to be reporting that income on your tax return whether you got a 1099-K form reporting it to you and the IRS, or not! For if the TPSO does end up sending a copy of your 1099-K form for last year to the IRS, and you do not include and report it somewhere on your 2022 federal 1040 tax return, I can GUARANTEE you with 100% CERTAINTY that you will eventually be contacted by the IRS about the discrepancy on your return.

Now as for the other poster who said he got PayPal Friends & Family payments he received last year erroneously included in the amounts reported to him on his 1099-K form for 2022, before anything else, go back and double, and maybe even triple, check your records and numbers, and compare them to your Paypal account records for the year, to be absolutely certain your 1099-K form income being reported to you is wrong. I'd then print out or otherwise have copies and/or access to all your pertinent records at hand, and then call PayPal and explain how you received an erroneous 1099-K form from them, and what the correct amount should be. If you are correct, and can get them to realize/see their error, they should agree to prepare and issue you, and the IRS, a corrected copy of your 1099-K form for 2022. What I don't know is how long that could take them. There is an IRS imposed deadline for an issuer to get 1099-K copies submitted to the IRS, and that due date is today, January 31, 2023. However, there is no specific deadline to then get them corrected copies. You are kind of at the mercy of PayPal I'm afraid, and how quick they will move to correct their error. It is also possible that PayPal may just try and blow you off and not do anything to correct the erroneous 1099-K form, or maybe even insist they are right and you are wrong, though I would sincerely hope that is not the case. In that instance, if they refuse to help you despite having the records and data to back up and prove their error, you may need to go ahead and file your tax return anyway, using the incorrect 1099-K income they reported as your gross income/sales amount received in 2022, and reporting that same amount somewhere on your 2022 federal income tax return as your gross taxable income/sales for the year. And then you deduct/take off the erroneous Friends & Family payments received, along with and as part of all your other applicable expenses and deductions, to arrive at your true taxable income. Be sure to keep all records, info and data supporting your claim as to the error, and keep that with your 2022 tax return and tax records for at least four years. (Technically you only need to keep tax records three years, but I usually advise people to keep them at least four years, just to be safe.)

Having said all that, a couple other issues/concerns do come to mind regarding erroneous reporting of PayPal F&F payments as supposedly G&S payments. I do not have firsthand experience, but have heard that PayPal may now be monitoring even more closely the activities of their users for potential abuse of the F&F function. PayPal is not stupid, and realizes that many people who do not want to have to report G&S income received to the IRS may try to switch over to using F&F services going forward to escape the IRS finding out how much their sales really are. And Paypal also knows that they don't get to charge their service fee for the F&F service. So not only are such potential abusers cheating the IRS, they are also cheating PayPal. I thought I'd heard/seen somewhere that when PayPal did find what they felt was abusive behavior, that they would suspend that user's account from the ability to do anymore F&F transactions. Again, I do not have firsthand evidence or proof of this, but would assume that even if Paypal shut down someone's F&F account, they wouldn't also automatically transfer that F&F activity over to then be reported as G&S income on the account owner's 1099-K form for that year. So, to the person asking about the alleged erroneous F&F receipts being reported as part of their G&S income being reported/shown on their 1099-K form, is there any chance you had any contact or inquiries from PayPal during the prior year in regard to the usage of and activity in your F&F account? If so, is there any possible chance PayPal may have reassigned some/all of you F&F receipt activity from last year to G&S activity? I'm assuming PayPal would not do such a reassignment without expressly informing you first, but you never know with large companies of their size. But I have to ask to cover all the bases.

The other concern/issue I then wanted to bring up is, I don't know how much activity you have during the year in your PayPal G&S and F&F accounts. Nor if you have a lot of it right around the calendar year ends. Reason for my asking is that you may be keeping track of your G&S income based on a different measure, or maybe more appropriately a different timing, than how Paypal accounts and keeps track of it. Is it possible you have a lot of year end G&S activity that you maybe count as being received in the year it actually ends up being put into your account, whereas Paypal may be putting it into the year where they had received it, but not yet released it into your account? You also never said how much of a difference this error you are talking about is. Is it at all possible the difference you discovered is not F&F payments after all, but maybe just G&S payments you received in early 2023 that Paypal had marked you down for as actually receiving in 2022? Just speculating, but also trying to cover all the possible bases I can think of off the top of my head regarding your question/issue.

Hopefully, this will help the two of your asking specific questions, and maybe others receiving 1099-K forms they weren't expecting this year as well, or that they thought weren't accurately reporting their 2022 G&S income.

No problem Justin, I get it and agree with you. Go look at that article I linked to in post #20, you'll note how it clearly states that donations and charitable type contributions are NOT supposed to be getting included in these G&S type amounts being reported on 1099-K forms, along with all F&F type payments to not be reported as well.

I can also understand the issues and errors that can be made, especially when these changes to the reporting limits get suddenly tossed out the door at literally the last minute. This whole issue has been a potential cluster-you-know-what from the very beginning, and in the IRS' attempt to hopefully make things easier for everyone, it may be having the exact opposite effect for many. But don't go blaming the IRS or any of the companies that have to prepare and issue these 1099-K forms. The bullseye should be squarely on our wonderful federal government, and all the dedicated, hardworking, and wonderful members of Congress, and whoever was in the Executive office that then signed this into law. (And that statement is made with complete and fully intended sarcasm.)

Hopefully you are not getting any of what you talked about reported as G&S type income, and having it show up on a 1099-K directed to you. If you have a concern or potential issue, I would possibly try being proactive, and contacting whatever TPSO (Third Party Service Organization) you may be using to handle these transfers, and explain what you're doing to them, and how to ensure that this activity does not end up as G&S taxable income to you on a future 1099-K.

One other suggestion, try using Zelle for cash transfers. Unlike all the TPSOs like Paypal, Venmo, and so on, Zelle is a direct bank-to-bank transfer, and is not considered as a TPSO, and therefore is not subject to any 1099-K reporting whatsoever. I myself have never used Zelle or set up an account with/through them, but understand they currently, at least, charge no fees for using their money transfer services. However, individual senders/recipients should check with their own bank/credit union to make sure they may not have some processing fee or additional charge they may try adding on to such transfers.

Sounds like a great thing you and others have going. Good luck to you all in keeping it going long into the future.

2022------1099k
 

I received the 1099k for 2020 and 2021 from eBay----I need one for 2022, eBay didn't send --any suggestions?

Did you go to the taxes page on eBay? It should have the details.

Bob, well stated. As for me, I'm in NJ and this is the first year I got the 1099-k from Ebay. My sales in 2022 were about half of what they were in 2021. My purpose of posting wasn't to complain, I'm going to state my total sales from Ebay and other sources regardless of getting a 1099-k or not, but more to make folks aware not to assume they aren't getting a 1099-k just because Ebay is not required to send it. I think this part of your post should really be emphasized.

Hey BobC, great stuff!

fyi, I had my f/f suspended years ago by paypal. I wasn't trying to avoid taxes, but i was trying to avoid their fees, and they finally caught on. so i switched to venmo f/f (also owned by paypal!).

Hmmmmm? Not to ask a stupid question, but did you double check to make sure you did go over BOTH the $20K sales/200 transactions threshold limits? I can't imagine you asking if you didn't but, still have ask the obvious.

Assuming your answer is yes, any chance a portion of your receipts this past year may have come through as F&F payments instead of what you may have thought were G&S payments? And if so, maybe enough dollars did get switched so it somehow got you below the most recent year's threshold limits after all?

But if that isn't it either, it is possible your 1099-K could still be sitting in the mail system somewhere, or may have been lost/mis-delivered. What you can do is contact Ebay/PayPal, to ask if your 1099-K form for 2022 has been sent out yet. And if they tell you yes, and it was sent a while ago according to them, ask if they can send you another one, but be sure to confirm the address they have for you on the 1099-K form in case they botched up their records and sent your original 1099-K to the wrong address. In which case you'd know why you never received the original one they sent you. Or maybe see if they can just make it available to you online so you can simply go and print it off yourself. You don't need an original to send a copy in along with your tax return, you just need a copy to see what the IRS got told, and make sure you report the proper amount of gross income/sales on your tax return.

Worst case scenario, if your 1099-K copy doesn't show up in the mail on its own in the somewhat near future, and you can't get Ebay/PayPal to send/provide you a new copy, you may have go back through and double check your PayPal G&S numbers and receipts for last year, and use that figure you come up with to report it as your gross G&S taxable income/sales from 2022 on your tax return. As long as what you end up reporting on your tax return equals or exceeds what the IRS thinks you're going to report per the 1099-K form they may have gotten for you, you're good to go.

However, as I mentioned in one of my earlier posts, in response to another person's question, you do have to be careful in figuring out what you should properly be reporting if you have to calculate your taxable G&S revenue yourself due to not getting a 1099-K form after all. If you had received any G&S receipts right around the year-end, or right after it, you need to careful. There could be some timing differences between when Ebay/PayPal thinks you received G&S receipt income, and when you may think you received it. And this fairly new Ebay Authentication Program could possibly be a huge factor in creating even bigger timing differences for people. Unless you are in a formal business, and have elected to use the accrual method of accounting, most every individual is considered and treated as a cash-basis taxpayer. That means you only record and report taxable income in the year when you actually receive it, and only record and report tax deductible expenses in the year you actually pay them. But in the case of PayPal, they are acting as sort of an official agent for you. So when you sell something on Ebay say around 12/28, and the buyer pays you via PayPal on 12/29, you then turn around mail the item off to Ebay Authentication on 12/30. Then because of the year-end holiday and all, the authentication company doesn't receive the item till say 1/4 of the following year, and finishes their work and forwards the item on to the buyer on 1/5. My understanding is that Ebay/PayPal may consider you to have received the income when they first received the buyer's payment on your behalf back on 12/29, but because of the AP program and all, PayPal doesn't actually release your money to you and put it into your account till after the authenticator completes their job and sends the item on to the buyer. In which case you may not think you received the money till after the end of the year. See the potential problem? PayPal/Ebay may be including the proceeds from that 12/28 sale on your 2022 form 1099-K and reporting it as taxable income to you for 2022. Meanwhile, you're thinking you didn't actually receive the money till sometime in 2023, and therefore aren't expecting it to be reported as taxable income to you until next year, 2023. So if you do end up contacting Ebay/PayPal about your missing 1099-K form, also ask them which year, 2022 or 2023, they'd end up reporting that taxable revenue/sales income in for you, based on my above circumstances and story. And if you do get an answer, please come back on and post for all of us what they told you. That way we'll all know for certain exactly when they consider a person to have received taxable income for their G&S receipts.

Hope this helps.

I don't sell on Ebay. Does this tax page you're referring to possibly have a link or something where you can access and download your 1099-K form right online?

If so, that would be helpful information for maybe a lot of people.

If you sold through eBay it does.

eBay 1099-K
 

Yes, I got my 1099-K both in a USPS envelope (Presorted First Class Mail) and a link that I can download.

No worries, I didn't think you were complaining at all. New Jerseys is not one of the states that has already enacted a lower reporting threshold limit, so if I were you, I would still be a bit concerned as to why they did send me a 1099-K form if I didn't go over the $20K/299 transactions threshold limits. You still might want to try calling them to find out why they did send you that 1099-K they really didn't have to. You never know, there could be some other issue with their system, or error in their records, that affected you. Usually better to fix things early before they possibly get worse later on.

The point about how you can still be sent a 1099, even if someone wasn't legally required to, is still 100% valid for everyone.

Yuck, that sucks. But be careful on Venmo as well. I think a lot more people are going to be getting more and more scrutiny for their F&F type usage and activity going forward.

Zelle could be a last resort for you since they are not considered as a TPSO, and therefore are not subject to any 1099-K reporting requirements at all. However, you have pretty much no transaction protection or recourse if a deal goes bad and you get ripped off.

[Double post!

Ah, great to know, thanks Ben.

Thanks for understanding my frustration Bob, and trust me I know exactly what poorly performing branch of government sends this nonsense the average citizens way.

I have not received anything as of yet, but just was a bit grumpy after seeing that post. I really try to make a bit of difference even if tiny during this little nick of time we get to spend on this earthly plane and get defensive about someone taking that away from those that need it. I choose to help children because they do not have a selection in the hands they are dealt. I believe that if they are shown they are not forgotten that they will believe in their strength as adults to push to greater heights of achievement.

I will look into Zelle as I have not tried that as of yet. I just took in donations toward these items in any way possible to make it as easy as possible for those helping.

Have a good one.