Expected lifespan of stealth accounts

[matt20]

oh wow,

So if I register an EIN, my big fear of not being able to build accounts past that $20k limit is solved?

[Sandy D]

Originally Posted by john456

Wow after I said it 5 times Meg Whitman appeared in my mirror!!

We all need a picture of her on our wall because she gets credit for helping us expand our ebay business and make more money.

[jeffweico]

Originally Posted by matt20

oh wow,

So if I register an EIN, my big fear of not being able to build accounts past that $20k limit is solved?

Yes. Keep in mind that PayPal CAN ask for an SSN on ANY account at ANY time for identity verification. But an account that has an EIN attached and is being properly run is UNLIKELY to be asked for the SSN. PayPal asks for an SSN when they are worried about risk.

Things that could trigger an SSN request other than for tax reasons:

1. Unresolved customer issues
2. Customer complaints of counterfeits
3. Lots of negative feedback
4. Low DSR's
5. Suspicious activity
6. Applying for the PayPal ATM Card

Suspicious activity could mean anything, but really it means anything where PayPal perceives an increase in the risk on your account. For example, you have a stealth account with an EIN attached and it is 2 years old. Over the 2 years, you built it up to selling $5k per month. You sell HDMI and printer cables and low dollar value PC accessories - under $25. All of a sudden, you start listing hundreds of $1,500 laptops for sale. THAT could trigger the SSN request. And PayPal is required by US law to get an SSN for US customers when they apply for any product that gives you access to the financial system - specifically debit cards and credit cards. So don't hit the APPLY button for those.

[matt20]

Thanks!! You guys are awesome.

So, when I register an LLC, it has my name and address attached to it.

When I sign up for eBay and PayPal, do I join with the LLC name as my name? Or do I have to use some other actual name other than my own?

Such a big learning curve compared to the "list items, sell items" routine of 2 weeks ago lol

[jeffweico]

Originally Posted by matt20

Thanks!! You guys are awesome.

So, when I register an LLC, it has my name and address attached to it.

When I sign up for eBay and PayPal, do I join with the LLC name as my name? Or do I have to use some other actual name other than my own?

You can use your real information to register the LLC in your state. Also use your real information to get the EIN from the IRS. NEVER give any ⊗⊗⊗⊗ information to the IRS!

Then, start a PayPal account with a stealth identity. You can register it as a business account right away, but I always prefer to start it as a personal account and then switch to a business account later, like when they ask for a tax-id. That way, if the account is on shaky ground and gets banned in a couple of weeks, I have not wasted an LLC and EIN.

[matt20]

Gotcha!

So if I register a stealth account with a different name and address, and then PayPal requests a tax ID, they won't care that I only decided to make it a business account after they requested the SSN?

Also, does the address on the LLC registration have to match the address on the eBay account and stealth PayPal?

[jeffweico]

Originally Posted by matt20

Gotcha!

So if I register a stealth account with a different name and address, and then PayPal requests a tax ID, they won't care that I only decided to make it a business account after they requested the SSN?

Also, does the address on the LLC registration have to match the address on the eBay account and stealth PayPal?

No and No.

Edited to add: The first time one of my PayPal accounts got hit with the tax-id request, I was nervous about that. In fact, I couldn't find the upgrade section on the account to change it to a business account. So, I called PayPal and gave the rep a line of BS about my accountant telling me to make sure everything was properly in place so that my business income was separated and properly reported to the IRS. He said he understood and walked me through the process. 5 minutes later, I received the email from PayPal confirming the switch and the addition of my tax information.

I WOULD suggest having an LLC and EIN ready for their request. When you apply for an EIN, it can take up to 2 weeks for the information to be updated in the IRS database. You don't want PayPal to think you just applied for the EIN - I'm not sure it would matter, but better safe than sorry.

[matt20]

Alright so

1. Register an LLC and EIN
2. Make PayPal account using random name and different address
3. Make Stealth eBay account using LLC name and same address as PayPal
(Question: Will the "person's name" appear anywhere on eBay, or just the LLC name?)
4. Upgrade to business account and provide EIN when requested.

Got it.

Last question for the night:

Where do I register for an LLC? And I do that first, and then request an EIN from the IRS right?

**disclaimer to admit how clueless I am about all of this** lol

[GreenBean]

@matt

What you must do is speak to a tax professional. Discuss everything.

Also read thro' this site

Internal Revenue Service

It is user friendly and has the in-depth info you need for your business.

[slapped]

Expected lifespan of stealth accounts


It is ALL about what you sell,,,Plain and Simple,,,If you sell Rubberbands, expect your accounts to last FOREVER

If you sell Exercise DVD sets like P90X,,your accounts may only last MINUTES,,,and there is a fair chance that you will also wind up in court as well,,,

[vogeltron]

Originally Posted by krimson

so in short the expected lifespan of a stealth accounts if you have 10 or more if you spread your sales throughout each they will last about 1 1/2 years before paypal comes knocking because you reached 200 transactions or 20k in sales

Depends on how much you move. Past couple years it was more sales dollars and projected sales. Now I have gotten more and more requests at lower sales less than $10k. My speculation is that they could be going off the 200 transactions as well. Seems like you get three emails from them requesting Tax ID then you can no longer close or receive funds. Will be interesting to see if those limitations are lifted in 2014. Unfortunately, from everything I have heard and seen. Stealth accounts for US members have lost value in terms of payments you can receive this year. You never know though how it will play out year to year.

For myself included as the long term members preach. That is why you need to have a lots of extra accounts primed and ready to go.

[rsot]

And the rate of sales revenue since PP will kick your account if PROJECTED rate is 20k/200

[Sandy D]

I have had a record number for sales every on ebay this year and so far this year by spreading sales over tons of accounts I have not received a single request for tax info.

Knock on wood but I last year got one as low as 5k in sales.

I have several accounts sitting with only some browsing going on for a few months to hammer in November and December for large volume of sales.

[matt20]

Originally Posted by Greenie

@matt

What you must do is speak to a tax professional. Discuss everything.

Also read thro' this site

Internal Revenue Service

It is user friendly and has the in-depth info you need for your business.

Thanks Greenie!

Back to the LLC option for one second:

Will PayPal/eBay ever ask for a driver's license or utility bill if it's under an LLC?

[slapped]

Yes, If they want to they can also ask for your SSN

[outofluck]

Originally Posted by slapped

Yes, If they want to they can also ask for your SSN

What do you do then?
Or better yet, how do you avoid this?

[GreenBean]

Originally Posted by outofluck

What do you do then?
Or better yet, how do you avoid this?

this is the how long is a peice of string question................


You create accounts that are run in such a way as to stay under the radar.....


That is how I run my USA accounts.

[rsot]

Originally Posted by outofluck

What do you do then?
Or better yet, how do you avoid this?

You avoid this by aiming to keep sales low and rate low - if you are asked this then not much you can do but move on to next account and wait out the holding period.

[GreenBean]

Originally Posted by rsot

You avoid this by aiming to keep sales low and rate low - if you are asked this then not much you can do but move on to next account and wait out the holding period.

When did paypal usa give accounts asked for 1099 a holding period?

Thought the procedure different.

[Sandy D]

Originally Posted by Greenie

When did paypal usa give accounts asked for 1099 a holding period?

Thought the procedure different.

Wondering this myself.

Holding period for what?

[vogeltron]

Originally Posted by Sandy D

Wondering this myself.

Holding period for what?

I think he is referring to when PayPal locks accounts from receiving payments or closing the account do to failure to provide Tax ID. The past few years if you waited until the next year, usually end of Jan when they would send 1099k out to everyone else. The accounts have been released and you can receive payments again. No guarantee it will happen again in 2014.

[rsot]

Holding period means if your PP gets limited (i.e. request for documentation) and you CANNOT solve it with your documents, you will get your money HELD for 180 days. We know this principle