Ebay tax reporting drops from $20,000 to $600

[Dandor]

Originally Posted by BobC

Dandor,

What EXACTLY did Ebay say in their communication to you? Sending you a 1099-K form if you had not yet met the required threshold for 2021 in and of itself is technically not a mistake. The rule simply mandates that someone like Ebay must prepare and send you a 1099-K form when your sales (and number of transactions in 2021) reach a certain amount. If you didn't reach those threshold amounts, there's no law or rule that says Ebay (or whomever) still can't send you a 1099-K reporting your 2021 sales, regardless of what they were.

They screwed up with everyone in California. I had less than $4000 in sales and less than 150 transactions. This is exactly what we were told. I received my 1099-K form in the mail today. Part of me is on the fence about if eBay truly didn't send the form to the IRS/CFTB. I guess I could take their word, but the mailed 1099-K form has me concerned.

A recent technical issue resulted in a 1099-K form being incorrectly provided to you. Please disregard the incorrect 1099-K form. The incorrect 1099-K form was not sent to the IRS or California Franchise Tax Board.

We’re working to resolve the issue and ensure that it will not happen again. Unless you had more than $20,000 in gross sales and 200 transactions in 2021, we will not submit a 1099-K form to the IRS or the California Franchise Tax Board.

We sincerely apologize for the error and any inconvenience this may have caused.

As always, thanks for selling on eBay, and for being part of the eBay community.

The eBay Selling Team

[BobC]

Originally Posted by Dandor

They screwed up with everyone in California. I had less than $4000 in sales and less than 150 transactions. This is exactly what we were told. I received my 1099-K form in the mail today. Part of me is on the fence about if eBay truly didn't send the form to the IRS/CFTB. I guess I could take their word, but the mailed 1099-K form has me concerned.

A recent technical issue resulted in a 1099-K form being incorrectly provided to you. Please disregard the incorrect 1099-K form. The incorrect 1099-K form was not sent to the IRS or California Franchise Tax Board.

We’re working to resolve the issue and ensure that it will not happen again. Unless you had more than $20,000 in gross sales and 200 transactions in 2021, we will not submit a 1099-K form to the IRS or the California Franchise Tax Board.

We sincerely apologize for the error and any inconvenience this may have caused.

As always, thanks for selling on eBay, and for being part of the eBay community.

The eBay Selling Team

Like I said, this is technically not an error. They (Ebay) can still send everyone the 1099-K forms and they've done nothing wrong, except maybe make more work and expense for themselves by doing something they didn't have to. In this case I think the "error" they are referring to is the one they created by sending these 1099-K forms out to people who weren't expecting to get these till next year, and are now pissed as hell at Ebay thinking they're going to have to start reporting these sales on this year's (2021) returns instead of starting on next year's (2022) tax returns. And i'll also bet a few people had already filed their 2021 tax returns not expecting a 1099-K this year, and then this "present" from Ebay showed up. I'm sure that made a lot of people happy!

I'm thinking Ebay is doing a lot of damage control because of all their sellers they've pissed off due to this. And as a result, I don't think they'd make an even greater monumental error by telling everyone not to worry because they didn't actually send any 2021 1099-K forms that did not meet the reporting threshold in to the IRS/CFTB, but then sending them in anyway. I can't believe even Ebay could be that effing stupid! So though I can't guarantee it, I think you'll be okay to assume your 2021 form 1099-K did not get sent in to any tax authorities. Good luck.

[Dandor]

Originally Posted by BobC

I'm thinking Ebay is doing a lot of damage control because of all their sellers they've pissed off due to this. And as a result, I don't think they'd make an even greater monumental error by telling everyone not to worry because they didn't actually send any 2021 1099-K forms that did not meet the reporting threshold in to the IRS/CFTB, but then sending them in anyway. I can't believe even Ebay could be that effing stupid! So though I can't guarantee it, I think you'll be okay to assume your 2021 form 1099-K did not get sent in to any tax authorities. Good luck.

I have talked to some upper management people there. I believe that they can be that stupid!

If I did use the 1099-K form for my taxes, would the IRS/CFTB question me using a form they never got? I know the run reports and can find out immediately if you didn't use the 1099-K to file. However, would they run a report the reverse way to see if you used a 1099-K form that they never received. I guess they wouldn't care since reported income means more money for them.

[BobC]

Originally Posted by Dandor

I have talked to some upper management people there. I believe that they can be that stupid!

If I did use the 1099-K form for my taxes, would the IRS/CFTB question me using a form they never got? I know the run reports and can find out immediately if you didn't use the 1099-K to file. However, would they run a report the reverse way to see if you used a 1099-K form that they never received. I guess they wouldn't care since reported income means more money for them.

You got it exactly right, what isn't reported to them, they don't know about and they don't really care. They get concerned when they see a taxpayer isn't paying tax on something they do know about. They assume most all taxpayers are generally honest and voluntarily report all sales on their tax returns (And you thought Ebay was stupid?). So if anything, the IRS probably expects to see more returns with higher reported taxable sales than what was being reported on those same taxpayer's 1099-K form(s) than not.

Sounds like you'll be okay filing your 2021 returns as you had in earlier years. Good luck.

And as for Ebay's intelligence, I was trying to be nice and give them the benefit of the doubt. LOL