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Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

Close PayPal Account?

I recently got the dreaded request for my SSN or EIN. I haven't reached the 20,000 limit yet, so I think they are just jumping the gun. Nothing has been limited...so far. The account has been active for several weeks since the notice popped up and continues to pop up. It has a "remind me later" button.

I already used an EIN on a previous account (and I'm sure most know you can only get one EIN for a sole proprietorship and can't use EIN's on multiple PayPal accounts that you don't want linked) and I'm pretty sure I've used my SSN in the past. So I was thinking of closing the account before its limited and then opening another with fresh/verifiable info. A caveat, this paypal account is attached to my ebay account (all legit info) and I would want to attach the new PayPal account to my eBay account as it would be replacing the old one. My thought is that if I close it before PayPal takes action, then it may seem legit and the new account may get less scrutiny and give me more time to seek a more long term solution.

What do you folks think? Has this been done. Is it a good/bad idea? I sell comic books for a living and I can't do the multiple accounts that have worked so well for others on the forums.
Ziggy

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

You COULD open a new Paypal and attach it to your ebay account but it will be a matter of time before the new one gets limited and the last thing you need is to have 2, 3, 4 limited paypals with money in them.

You best shot is to open multiple accounts and TRY not to reach the 200 item / $20k. All it takes is some calculations to figure out where or when you will reach these limits.

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

Your only limitation for the amount of EINs u can create is one per day so why not create another EIN under a separate business ????

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

Does not work. paypal picks up quickly.

Did you notice the forum overflowing with this idea?

No.

You are earning money. You need to pay taxes.

These tax obligations were announced in 2009, not yesterday. You need to get moving to make sure you cover yourself for your requirements.


Get tax help quickly too. Forum is not a tax agent.

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

Once you get the Tax ID request you can not close your PayPal account until it resets sometime next year. Yes, it does suck even if you are well under $20k. It seems as though this year it has changed. Everyone I have talked to has been limited from receiving funds and closing the account when they get up around 190 transactions. I agree it is a big monkey wrench for stealth sellers who do not sell high priced items.

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

Simply closing a PP and opening a new one is not a viable solution - PP sees all the info and can link you up causing immediate limitation

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

I'm understanding the op is concerned because he thinks he can have only one EIN number and would like another but thinks you can't get one so since the op has his one EIN and a used social thinks that he is unable to get another EIN,

Maybe i misunderstood him

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

Maybe will get OP going on info:

Apply for an Employer Identification Number (EIN) Online

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

A person (a sole proprietor) may only receive one EIN. I could get another one by opening an LLC or some other business entity, but I can only get one as sole proprietor. An LLC is more complicated, and I'd rather not go that route unless necessary.

A thought I had may resolve my problem. Sign up for Propay or a merchant account and remove PayPal from the checklist while still keeping it listed
in my description as payment method I accept. If the customer doesn't want to use Propay or a merchant checkout, I can simply send them a paypal invoice directly to their e-mail using my old, Tax ID confirmed Paypal account. There are no limitations on it and it's in my real name. This keeps PayPal as a method of payment, which, I'm sorry to say, is very popular among buyers. Not using Paypal, in my opinion, would have a significant impact on my sales.

Of course, this is not without danger. There is always a chance that my old PayPal account could be linked to my new Ebay account...possibly if a customer were to file a complaint and mention accounts. I'm not saying it's perfect, but it seems the route to go.

I can't open multiple accounts in an attempt to sell under the 20000. The product I sell requires a large volume of items to select from so selling a handful of items on multiple accounts won't work in this case.

What do you folks think?

Re: Close one Paypal Account & Open Another to avoid Tax ID. Good idea or not?
 

I think that you're misunderstanding me. I'm not looking to avoid paying taxes and don't need tax advice. I'm simply trying to keep a PayPal account active so more customers will buy. No matter what we here may think, many find PayPal the gold standard of internet commerce. I can select an alternate
to PayPal, such as Propay or a merchant account on Ebay, but I really feel I will lose sales. Hence, my dilemma.