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This is why I always tell people to spread out sales over many accounts.

I think the record here of getting the IRS request has been as low as 110 items sold and the amount someone else reported was around 5,000 in sales.

It is the POTENTIAL of you hitting the 200/20k that pps is looking at.

If you sell 100 items this month and say 75 next month you most likely will get the request. Because you have the "potential" of already hitting their numbers and they want to be ready for you because of their IRS requirements.

Unfortunately that's a record I own. 4 sales in a 24 hour period. :smash:

I sold 4 monthly recurring services at $247.00 per sale.


PP asked for my Soc Sec number because they Annualized my sales volume.

4 x $247.00 = $1,000.00

1k x 12 months = 12k

PP said they assumed more sales would be coming thru so they told me to provide info now.

I no longer have that account.

Moral of the story: Don't use "subscription-Buy Now" buttons. Send your customer a PP request monthly if you need to go that route.

That's what I do now.

Thanks.

This just proves my post is correct and people need to be aware that large volumes of sales on one account is no longer the best thing to have.

Spread things over many accounts is the way to go.

I do it and do it successfully so others can to.

PP is known to extrapolate on sale figures - another risk setting that is built into the platform - it is annoying if you only do short bursts of activity

I have long exceeded the 20k mark, but not the 200 transactions. You must have both in order to have PP send the info to the IRS. Now, with that said, I believe that it is NOT 200 ITEMS sold on ebay per se, BUT 200 TRANSACTIONS coming though paypal. You have one buyer who bought 10 items and paid in one paypal payment, it counts as 1 transaction, not 10. So if you have 200 transactions to deal with on paypal, you now have 199 and not 190.

This has its advantages.

This is not correct.

Many have reported even less then my numbers.

You DO NOT have to reach both thresholds at all.

Did you even read Roscoes? He got it with a very small amount of sales.

It is the potential of you hitting those numbers and NOT you actually hitting them both.

Your info is totally wrong as I have experienced it without hitting either number or even close to it.

I was told by a tax expert this is what they were told and it has turned out to be just another lie by pp.

And my transactions never hit the 200 on this pp account and of course never come close to the 20k.

With the ever changing ways we all need to be careful as it has been proven that 200/20k is NOT a true statement to the meeting both of those numbers.

No - they can request the tax info at any time. Doesn't have to be 20k/200. It is the IRS REPORTING that isn't done until meeting both criteria.

I sold $30k last year but less than 200 items. I check in my paypal account under the tax section and have NO 1099 available.

It's not reported until you reach BOTH thresholds.

YES, they can ask for tax info anytime they want...that doesn't mean they are going to report it.

I stand corrected. I previously thought it was $20,000 or 200 sales.

This is what PP says: https://cms.paypal.com/us/cgi-bin/ma...ng_us/IRS6050W

Internal Revenue Code (IRC# Section 6050W states that all US payment processors, including PayPal, are required by the Internal Revenue Service #IRS# to provide information to the IRS about certain customers who receive payments for the sale of goods or services through PayPal.

PayPal is required to report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments in a calendar year.

PayPal will track the payment volume of your account#s# to check whether your payment volume exceeds both of these levels in a calendar year:
$20,000 USD in gross payment volume from sales of goods or services in a single year
200 payments for goods or services in the same year

You may be asked to add your tax ID number, such as a Social Security Number #SSN# or Employer Identification Number #EIN#, to your existing account#s#, if you don’t already have one on file.

If you cross the IRS thresholds in 2012, PayPal will send Form 1099-K to you and the IRS for the 2012 tax year in early 2013.

Will I be affected by the 2011 tax changes if I only meet one of the thresholds?

No. A seller has to exceed both IRS thresholds #$20,000 in gross payment volume and 200 separate payments) in a calendar year before a Form 1099-K is required.

We may require that you provide a tax identification number before you reach these thresholds however we will only report your payments if you exceed both thresholds.

I never said it was going to be reported.

The thread is NOT about that issue.

The thread is to let people know they will ask for and in most cases shut your account time over time if you do not provide them the information.

You stated above you had to reach both thresholds before you will get the request and it is not so.

If you read thought many threads you will find many people getting their pps shut down because they were asked for SSN or EIN and did not provide it.

That is what this thread is all about.

Letting people know that if you get close or have the potential to hit these numbers be prepared to provide this info or the account will be limited at some point if you do not provide.

Correct, but the thread is about being asked for the information at number way below the 2 thresholds.

It is not about getting the 1099 at all.

That is an entirely different subject in itself.

So PP is saying I could run 1 Million thru my account and less than 199 sales and they WON'T report it to the ABC agency?

Hmmmmmmmmmmmmmm! :pop2:

Luxembourg here we come. :yar:

Nope.

The account will get the request and have it cleaned out as it will get the request because you have the potential of hitting both thresholds.

Once it is requested many have reported they lasted a month or two and then the account was limited.

If you run anything close to those numbers you will get the request long before because pp sees you as having the potential of hitting it and will jump all over it. Unless they do the normal pp thing and miss one here and there.

Yeah, what the Heck is with PP. I had the request twice via legal PPs. After I submitted docs I continued to sell but eventually PP shut down my account.

I had a Legal LLC for years, everything was perfect, then kaboom!

Every single person I know has been shut down after the dreaded Soc Sec request.

Does PP only want Stealth Accounts? What the :rant:

I hope so as I have a nice stack of them to last me for years!!

:clap:

No I never mentioned anything about the tax REQUEST even in my OP. I only stated IRS reporting. I already knew they could request info at any time.

I was asked for EIN, I provided it. Got limited later on for another issue and they wanted SSN...provided it and have been fine ever since, putting a good number of sales through with no issue. I dont plan for it to continue forever though.

Obviously that is not a Stealth account!

The way you were talking, it sounded like you still got the hammer after submitting SSN.

That's correct. That's when I had a real PP account. Now I'm all Stealth.

Right - so what I said was a valid remark.

Yea, the request will be there pretty much after a few thousand in sales. In 2012 for the first time on a stealth I had an account in Mid December just below 19k limited for receiving payments. It was reset about the 20th of January. I would say don't worry about it and try to spread your payments out.

So GreenBean does not get on me make sure you if sell items you realizes the taxes you have to pay and talk to an accountant. But if you are trying to get around the 20k for stealth usually the provide your tax id for PayPal the past 2 years has not meant anything. Until they actually limit you for getting payments. The best way to do that is to spread them out over the year as evenly as possible.

And as GreenBean would say make sure you talk to your accountant and pay your taxes.

I thought paypal asked for the ssn once they asked for the ID + billing scans at about the $1,000 mark that all accounts get hit with? To my experience they ask for supplier invoices and receipts at around the $8,000 mark and your ssn is given to them long before that. Did they change this or something?

Ran into this mess late last year :doh:

I try to keep my weekly sales average <$400 & <17 transactions per account now. If my averages get past those levels I pause on that account until my weekly averages are back below those levels.

You must be selling some high risk stuff. If you keep good standing with eBay and PayPal it takes time to work up to that amount of sales. Normally on a new ebay/paypal thanks to the selling limits on eBay I am lucky if I get 10k in the first year because it takes 3-4 before you can really even sell anything. If you are moving money through ebay/paypal that fast on new accounts you will get limited and asked for invoices suppliers etc. Unfortunately nowadays the tortoise seller on eBay is the one who stays in the game with stealth accounts.

This is my exact problem last year. I sold TOO FAST during the holiday season (can't help, it's Christmas and everyone want a gift), as a result, thousand of dollars pour into my PP account. Finally PP limit my acc and ask for supplier's invoice. In the end, they permanently limit it for good. If they didn't, I probably pass that $20,000 mark, because I made like $3000- $4000 a month.
In the new account, this month alone, I sold $600 worth of goods, I guess that's why they ask for my SSN, gotta do it slower.

eBay and Paypal your reputation. Think of it like a credit score, you have to build good standing with them and play within the rules.
It sucks as I know but to survive now that's how it is. I do have stealth accounts where I have sold 3k in month never more.

But I have had them since 2008. I had one account last year in December I got limited fro receiving money at 19.2k but it was reinstated in late Jan this year. It is all about taking it slow and trying to build a reputation with them.

It can be a hassle but there really isn't any way around it anymore. I might suggest if you are running into these problems maybe if you haven't already purchasing the stealth guide and consider running multiple stealth accounts so you can spread out your sales.

I just purchase that guide, and most of the info inside I already know, from dealing with PP and eBay. I figure it out on my own about how eBay and PP can link accounts, and how to make new bank account, link credit card, lift limit, etc. I learn all of that last year after my main and only account (also income source) got limited.

Yea, I know it. When I purchased the guide my stealth. I only learned one thing. But that one thing was well worth the $50 I spent. Was having accounts linked left and right years ago cause of Flash Cookies. Was a life savor. I always suggest people get it as a guide to the stealth world even if lots of it is stuff you already know.

I agree most guide common sense if long timer. But there a few things that makes it worth it. I just wish had where could print it as my antivirus hates the file.

Because you invested in that Guide you now have access to this forum and the subscriber section which is worth 100x what you paid.

No whining about the Guide.

PP and EB change almost weekly. That's why Aspkin created this forum.

Just some new information I want to share with everyone.

I have been pounding this subject for a long while here on the board to help people.

As a person who loves to test things, I test all kinds of ways to see what the results are so I can fully understand how and why things happen.

I posted a long time ago that I very good tax professional told me that this tax issues is merely the IRS putting ebay and paypal into the corner and telling them if you have someone who has both 200 items sold and 20,000 in sales they will required that that seller be sent the 1099 for tax purpose.

But----

I was also told that ebay and paypal decided they were not going to miss anyone who has the "potential" of hitting those numbers and will be ahead of the system if they force those who have the "potential" to meet these two to hand over your SSN, EIN or whatever.

This is why so many are getting the request for such low amounts. eb and pp want to be ready for you in case you do hit those numbers.

Sure some have been lucky enough to sell way past those numbers and not get hit with it but it is purely luck and they missed you. The same reason they decided to hit those "potential" sellers early.

Now the issues and the proof.

This week I have received several orders for accounts from 4 different people who got the request for SSN and all had their accounts limited shortly after not giving them the SSN. One I think said it was 2 months they kept on selling etc and then they limited the account with 3500 in it.

With that being said here is the perfect example.

I asked each one of them "How many items did you sell and what was your sales amounts?" All four were way below the 200 and 20k. Not one understood how this works and the misconception posted by some had allowed these people to think they had to hit both numbers to get the SSN request and that is simply incorrect. When you hit both number you will get the 1099 sent.

Now onto the juicy part.

I have posted about everyone needing multiple accounts to spread your sales out to stay under the radar. And one poster mentioned it was crazy to have large amounts of accounts.

Well, it is not crazy, it is smart business. Why? because if you are not prepared for the future and with eb and pp changing things almost daily then you might as well go work at Burger King because any smart business owner would know to be prepared for the worst and take advantage of today.

I have huge numbers of accounts for various reasons but for me I sell on avg 20 accounts per week and rotate to another group and then another group. Selling on hundreds of accounts I only have received the request for SSN one single time on hundreds of accounts and thousands of items sold.

And I dont get limited, I dont lose accounts and I have tested and worked on this subject for a while and find that everyone here needs back ups and multiple accounts.

How many you need needs to be based on what your prediction of sales might be in a year. Like me I sell thousands of items in a year, have thousands of items in stock and need tons of accounts to spread my sales out.

For others it could be you only need a few because you only sell a couple hundred items.

But I hope I have taught people enough to understand that you need to adjust your business plans according this this information and be prepared for today but also be prepared for the future.

Good luck everyone with your business. I wish everyone success and hope my thoughts help someone build a prosperous business now and into the future.

I see it as another win for team Aspkin members!

Sandy

The bar requesting the tax ID doesn't really mean much. I have had it on all my stealth accounts for the past few years after a thousand dollars or so in sales. Like Sandy says it is based on projections. What they do throughout the year is average your sales month by month to project if you will hit the threshold.

My experience has been try to even the sales out as much as possible. Last year I did have an account limited in Dec from receiving funds and closing the account. I had something like 400 transaction and 18.8 or 18.9k in sales. They account was reinstated late Jan right after the 1099k were electronically filed for everyone over the threshold. I still have the bar requesting the tax id all the time. For the most part I would be most worried about getting something like the death penalty from PayPal because of the reporting for selling too much on PayPals less than a year old.

This is where Sandy is correct. You should multiple stealth's ready to go based on how much you believe you are going to sell. You should also have overflow ones in case if you start selling too much in a single month or short period of time you can slow it down and move some items to another account.

When PayPal limits you for getting close to the threshold I think they do it to make sure you don't go over and they get dinged for non-compliance. This is with accounts that have a several years history in good standing with eBay and PayPal. Because of that I think they see them as assets and income stream that is why my account was reinstated. I will say it again, I would be worried about selling too much on a PayPal with less than a years selling history.

why can't you just get tax IDs and pay your taxes?

create steaths as a business.. get tax ID's and pay tax when the time comes.

You want to pay taxes on hundreds of thousands of dollars? Go right ahead....

That's the dilemma I am in at the moment...trying to decide whether I want to continue selling on this one account and have sales reported and pay taxes next year OR stop selling under the 200 transaction mark and move on.

And a fitting closing statement to a good thread.

Earn money pay taxes.

Keep your thoughts to yourself as well.

:peace: