200/20k IRS and Paypal Question
I just got back from my accountant and I wanted to see what he would say about my stealth adventures.
I mentioned that paypal allows sellers to sell up to 200 items and 20k in sales until they ask for a ssn/ein.
I also mentioned that once they do that, I stop selling and just keep whatever I made since they can't send the info if I don't provide the ssn/ein to the irs to end up with a 1099.
He scared me saying that any income needs to be reported and paid for, regardless of a 1099 or what paypal says is allowed. He also mentioned that having bogus info on these accounts is also not a good idea and that this kind of stuff can be 3-5 years or 100k in penalties.
So I'm wondering if that's true, because I just wanted to make accounts, sell and avoid the 1099 at the end of the year. Of course I would have my regular account paying taxes, but stealth accounts I wouldn't. What do you guys think?
Edit:
I called paypal and asked, and the rep said that they still report it to the IRS. I asked how do they do that and she said that they send the info to the irs under the persons name...does that sound right?
Last edited by talos; 04-29-2015 at 12:39 PM.
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