EIN - what info needs to match up?

[ploughman]

Originally Posted by phaz0rz

It's verified whenever they send out a 1099 for your tax ID for the first time. If the IRS rejects it then your account is closed. If the business name is wrong they have you fill out a W4 to correct the error.

Is this still the way they're doing it? Do they only verify the business name matching on the EIN if they send a 1099 to the IRS? Or is there some online way to do it when you send PayPal the EIN and business info.

I ask because I've never gotten to the $20K or gotten the 1099 yet. Some years ago I gave the EIN number and the business name and that was that for about 7 years. Now I've heard back that they want me to enter the tax info again, which may be coincident to having the PP account limited recently to just receiving payments and withdrawals to a bank account because I didn't want to give them an SSN.

I may have made a mistake in getting the EIN as a sole proprietorship and having my real name as the first line on the address on the form the IRS sent back. OTOH, I'm not sure I want to do an LLC over $6K a year if it complicates taxes (most sales are over on Amazon).

My first inclination is to give the same info I gave 7 years ago if it only gets checked in the event of sending out a 1099 and that being bounced. If I give them EIN + real name (as business name) I'm concerned they'll notice it doesn't match the registered name and cause a fuss.

Which would you do? I don't expect the account to reach $20K or actually need a 1099 soon.

[agent006140]

If you are ever audited ,it really does not matter whether you receive a 1099 or not,IRS agent could ask to see your bank statements and see all the incoming deposits,deposits with description starting with 'PAYPAL' is pretty obvious.
It is up to you to prove where these deposits come from,it could be inter bank transfer,then where is the sending bank account statement>
if not bank transfer,is it income you earned??
So keep copies of deposits,like insurance claim,tax refund etc

[ploughman]

I'm reporting the income on my taxes and don't expect any problem there or on the IRS side, even though I've yet to ever get a 1099 from PayPal (I do get a 1099 from Amazon, where sales are higher). I've always reported it whether there's a 1099 or not.

My question is whether I should give PayPal the same EIN info I did last time even though the business name probably won't match if they checked (Acme Widgets instead of John Q. Doe). If they check only when the IRS rejects a 1099 form they send over, it's probably OK because that's unlikely to happen for me anytime soon. I might get $5K or $6K in item sales for the year and $9K or so if they also count shipping & handling.

OTOH, if I gave them John Q. Doe as the business name (i.e. the correct match on the EIN form), I'm concerned they'll notice the name isn't the same one the account is registered to (account is a stealth) and that might be a bigger problem.

I recently got the second notice for updating the tax info so I'll have to do something soon.