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Old 07-06-2012
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Default IRS and paypal.....

When do they actually report? Will they report once you provide an EIN? Get close to the 200/20k limit? Or they are only collecting info(if they are asking for your info) and once you actually hit either 200/20k then they will report?

My worry is I create an EIN for a sealth account and get somewhat close to those limits, and they report it. I'll then need to pay taxes on that. I know for sure I wont hit 20k but paypal did send me a tax email and im about 13-14k. I will be close but wont hit the trigger of 20k.
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Old 07-06-2012
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You are really misunderstanding a LOT of this.

Bear with me as I try to explain.

paypal has a record of ALL user3657's transactions.

paypal has a requirement from the IRS that transactions require reporting.

Obviously there is an algorithm that creates this.

The activity of user3657's transactions may give rise to a request of the 1099.

Each report/request differs. That means the amounts differ.

Over the tax year the request could come at any time ( more or less).

http://www.aspkin.com/forums/paypal-...-usa-only.html

Have a read of the above thread too.

It's not as black or white as you think.

Of course you should/MUST take professional advice from a taxation specialist for this.

Hope this helps
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Old 07-06-2012
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But after browsing that link it says

"Under the new legislation, well report to the IRS the total payment volume received by US account holders whose payments exceed 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 "

so you must exceed both requirements for them to report your earnings to the irs?
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Pay your taxes. You must pay to play. There is no way around it. End of story. Trust me....everyone was deflated when the rule was implied. Took me about a month to get over it.
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Old 07-06-2012
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Quote:
Originally Posted by user3657 View Post
When do they actually report? Will they report once you provide an EIN? Get close to the 200/20k limit? Or they are only collecting info(if they are asking for your info) and once you actually hit either 200/20k then they will report?

My worry is I create an EIN for a sealth account and get somewhat close to those limits, and they report it. I'll then need to pay taxes on that. I know for sure I wont hit 20k but paypal did send me a tax email and im about 13-14k. I will be close but wont hit the trigger of 20k.
Once you submit an EIN/SSN, the IRS will now have notice of you having a relationship with paypal concerning an income source therefor if you don't file, or declare your proceeds, the government will be suspicious and you will get their undivided attention. I suggest doing everything on the up, and up, or risk going to jail
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Quote:
Originally Posted by cherrqell View Post
Once you submit an EIN/SSN, the IRS will now have notice of you having a relationship with paypal concerning an income source therefor if you don't file, or declare your proceeds, the government will be suspicious and you will get their undivided attention. I suggest doing everything on the up, and up, or risk going to jail
You wont go to jail, but say you dont pay $20,000 and 3 years later they figure it out, then a minimum of 20% compound interest would turn into $14,460 in interest alone. Have Fun!
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If you create a stealth paypal and ein using the same info, give paypal the ein...and as long as you dont go over 200/20k then paypal would not inform the irs as they say they are only required to inform them once you hit 200/20k???

I dont get how stealth users are going about creating eins on stealth accounts. Im not going to hit 20k in sales. If I do I will stop selling for a month so that I dont have to report taxes but I dont understand how guys are making paypal happy under stealth.
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Old 07-08-2012
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pay your taxes kid
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Old 07-09-2012
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Unless you are acquiring your products illegally, you can write off all your expenses, pay your taxes, and still make a decent profit. Just too risky to mess around with the Gov't. No way to avoid the long paper trail that leads right to your door.
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Old 07-09-2012
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Official advice of the forum is to seek professional tax assistance.

If that is hard to understand ......
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