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  #1  
Old 01-23-2021
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Default Stayed under the limit, they sent 1099 to IRS anyway

I thought I was good as long as I stayed under the 200/$20K limit, so I got several IPs from IPBurger, etc...numerous stealth accounts, spread things out, followed the guide, etc...but I just got an email from PP on an account that only did $5K in 2020 that they sent the 1099-K to the IRS.

In reading all the relevant threads here, I saw that some states have lower thresholds than 200/$20K, and I used an address in one of those states.

I'm not asking tax advice, per se, as I declare all income and pay taxes.....

But what should I do with this stealth account? Just wait until they say there was a mismatch or the address returned the mail or what?

If anyone has time to share advice or experience, thanks in advance...
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Old 01-23-2021
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I doubt if PAYPAL would do anything with return mail,

you can look at that 1099K image on Paypal site,what does it say?5K?

how can he open a Paypal account with no tax ID-SSN or company ID?

Quote:
Originally Posted by byronius maximus View Post
I'm not sure what this means....
pAYPAL gives us an option of downloading 1099k Form and print it ourselves ,so if you go into your Paypal account,you should find a copy which you can see what is the amount and the address you gave them

Last edited by TGMT²; 01-24-2021 at 04:00 PM.
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Old 01-24-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Quote:
Originally Posted by agent006140 View Post
you can look at that 1099K image on Paypal site,what does it say?5K?
I'm not sure what this means....
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Old 01-24-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Last I checked it was only Mass and a couple of other states that did this. Happened to me once also.

Regardless, the fact of the matter is that the 1099k they made for you has no tax ID on it so nobody can be held responsible. I'd still probably not sell on that account anymore.. but, just saying.
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Old 01-24-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Quote:
Originally Posted by agent006140 View Post
how can he open a Paypal account with no tax ID-SSN or company ID?
It is still possible to "open" a pp account...maintaining activity without issues will be the problem in general, sadly.
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Old 01-24-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Quote:
Originally Posted by phaz0rz View Post
Last I checked it was only Mass and a couple of other states that did this. Happened to me once also.

Regardless, the fact of the matter is that the 1099k they made for you has no tax ID on it so nobody can be held responsible. I'd still probably not sell on that account anymore.. but, just saying.
Yeah, VA is one of those states, and I had never read here that the holy "200/$20K" threshold does not apply to several states. That would have been good info to have before going stealth in one of those states.

Not only do I stay under that 200/20K limit, I keep the monthly sales in each account below what would be on track to reach that limit in a year.


Does anyone specifically have any experience with this? Like, I had upgraded to business and got an EIN, so PP sends a 1099 to the IRS, will the IRS tell PP that the stealth address doesn't exist/returned the 1099, and then PP asks me to confirm address or what? This has just happened with several of my accounts in the last few days, all with addresses in VA.
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Old 01-24-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Quote:
Originally Posted by rsot View Post
It is still possible to "open" a pp account...maintaining activity without issues will be the problem in general, sadly.
False news.

Do not agree with this.

Address choice, name choice, just two factors that MIGHT see an account killed prematurely......sadly.

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  #8  
Old 01-24-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

I have never had a 1099 mailed from PayPal just the opportunity to download it for taxes.

So there would be no issues about return mail to PayPal, it would in my opinion be safe to keep using the account.
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  #9  
Old 01-24-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

IRS does not care about your address,just your SSN.
It will ADD YOur 1099 gross sales to other income to verify your return
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Old 01-25-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Quote:
Originally Posted by byronius maximus View Post
Does anyone specifically have any experience with this? Like, I had upgraded to business and got an EIN, so PP sends a 1099 to the IRS, will the IRS tell PP that the stealth address doesn't exist/returned the 1099, and then PP asks me to confirm address or what? This has just happened with several of my accounts in the last few days, all with addresses in VA.

The IRS only tells PP if your EIN and/or business name do match their records. The address showing on the 1099 doesn't matter.

degsey already answered, but I can confirm.

About you not hearing about this rule in VA, it's most likely because VA just recently passed this regulation. Like 3 years ago there wasn't any state that would make 1099's for less than $20k. It seems like Mass did it first and then other states started to realize they are missing out on tax revenue by having such a high reportable threshold.
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Old 01-26-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

HEY everyone I am interested to find out more about this as well. I had paypal say the sent IRS 1099-k. Issue is its in all stealth information. When I logged on to my paypal, it was only for 3,355.34 in sales. WAY under any threshold. HOWEVER on the 1099-K that I downloaded they actually had the : FILER'S TIN
filled out, there was a number in the TIN section?!! I never provided anything so I have no idea what to do. I have no problem whatsoever claiming the income and paying the taxes but how do I go about this if its in all stealth information and with paypal having taken it upon themselves to fill out the TIN section???

Form 1099-K

I dont want the IRS coming after a fictitious person or headaches with stealth over less then $4k. Any help or advice would be greatly appreciated.
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Old 01-26-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Okay quick correction, I made a mistake the TIN is not filled out for me there is a FILER'S TIN (which is filled out obvious now its paypals info lol)
and
PAYEE’S TIN which is blank.

So since the payee's tin is blank and it still is technically under $20k, do I still report it or try to claim this 1099-k as mine? It was for the state of VA, and I am in NY. So I dont know how to go about making this right? please help
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Old 01-26-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Okay one more thing lol I think I may have answered my own questions, but just want confirmation from the vets on here. Obviously I panicked ha.
But since its under $20k it wont be an issue with irs, it would then be an issue of sales tax to the state, in this case VA. However since all the sales on the 1099-k from paypal were thru ebay, wouldnt ebay have already done the sales tax collection on their end? I mean ebay handles sales tax on their end so.. Then I should be perfectly okay in just ignoring the 1099-k and not having to do anything with it? is this correct? thanks
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Old 01-26-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Quote:
Originally Posted by degsey69 View Post
I have never had a 1099 mailed from PayPal just the opportunity to download it for taxes.

So there would be no issues about return mail to PayPal, it would in my opinion be safe to keep using the account.
I think this is an option-mail it or download it.
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Old 01-26-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Quote:
Originally Posted by livelifewild View Post
Okay one more thing lol I think I may have answered my own questions, but just want confirmation from the vets on here. Obviously I panicked ha.
But since its under $20k it wont be an issue with irs, it would then be an issue of sales tax to the state, in this case VA. However since all the sales on the 1099-k from paypal were thru ebay, wouldnt ebay have already done the sales tax collection on their end? I mean ebay handles sales tax on their end so.. Then I should be perfectly okay in just ignoring the 1099-k and not having to do anything with it? is this correct? thanks
whether it is 20K over or below,it matters to IRS,if you owe tax.
it is just 200 transactions and $20k is the cutoff,figure most businesses do more than that.
if you sell less than $20k,YOU probably does not make much money to owe taxes,thats conventional wisdom
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Old 01-29-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

Quote:
Originally Posted by degsey69 View Post
I have never had a 1099 mailed from PayPal just the opportunity to download it for taxes.

So there would be no issues about return mail to PayPal, it would in my opinion be safe to keep using the account.
Thanks. In this case, PP said that they had mailed it to the IRS too, but in any case, if it doesn't matter, why does everyone repeat the manta about staying under the 200/$20K threshold? Maybe I used to know and forgot, but if it doesn't matter whether they send a 1099 or not, why do we worry about doing things to prevent it?
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  #17  
Old 01-29-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

it does matter,as 1099 copy sent to IRS,it will add it your IRS account as income.
when it comes time to process your income tax return,it would notice discrepancy if you fail to report your online sales income,if it is large enough,it could end up with an audit
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Old 02-01-2021
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Default Re: Stayed under the limit, they sent 1099 to IRS anyway

So how would you go about paying 1099-K taxes on a stealth account?
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