Paypal phone call and tax id questions (not answered in prior threads I can find)

[rokan]

I've done a lot of forum searching here and elsewhere on when PayPal requires a tax id number, which is something I got an email about yesterday. My year-to-date gross sales are $12k so far but headed for either $20k or close later in the year. I'll be applying for and getting an EIN from the IRS today, and I'm fine for handling taxes in 2012. (I know in these threads often the responses are most concerned about the IRS, auditing, and tax planning complications, but PayPal is more the problem for me). With this account in my real name (sole proprietorship), name-EIN matchup should work. I've concluded that I'll give PayPal an EIN, since my SSN is out of the question due to an old banned (limited) account (several years ago in another state, same first and last name but all else different).

I haven't given PayPal the EIN yet, planning to wait a few days. Every additional day of survival or risk minimization matters much to me because I'm now quickly going from nil reserves to more decent financial reserves by liquidating old inventory as fast as I can process it. Most remarks I found in forum searches, here and elsewhere, implied one has until reaching $20000 gross sales since January 2011 (which would be months from now for me). A minority disagreed, but the earliest anyone I saw mentioned for trouble was 2 weeks after the email.

I don't truly how fast the system they use for checking EIN is updated, whether taking seconds or days. Does anybody know that? I wouldn't want to give my EIN now if it returned no result because their database hadn't been updated yet, like I don't know whether they check with IRS directly or with a third-party EIN lookup service. (At least some third-party EIN lookup services apparently update weeks to months apart, although probably PayPal has a different system).

The day of entering the EIN may be a surge in risk, as far as I know. Although I'd *hope* that they couldn't run a credit check without more explicit approval, they might not like that my recently-created EIN has no credit history info associated with it. Worse, if perhaps they could find out my middle name from EIN lookup (???), that might lower my hidden score in their artificial intelligence software's analysis by increasing closeness to my old banned (limited) account, since first+middle+last matching if so could be worse than first+last matching (only a handful of people in the whole U.S. with my particular unusual first+middle+last name combo).

At least one source implied that paypal called in addition to sending 2 emails. I've only received 1 email so far, although also with yellow reminder text appearing near the account balance area on paypal login. Does anybody know when paypal calls? A day after the email? Weeks after? If anybody received multiple emails, how apart in time were they?

Missing a paypal call, I know, is the sort of thing that gets your account limited. From a third party (not paypal and unrelated to this matter), I have the nuisance of frequently receiving anonymous calls which prevent my caller id (appearing as "unknown" rather than a number like 402-etc.). So I tend to ignore all "unknown" calls and only answer those where I can see the number calling me, but that raises the question of if I could ever miss a paypal call by doing that. I know when paypal called me long ago they used a regular number, and I got the call. I just wonder if that ever varies.

I'm well aware that I should have maintained multiple isolated stealth accounts so I would have been better prepared and not have to worry so much about this, but any answers would be greatly appreciated.

[JRYAN34]

no one is going to read all that sh!t. Signing up for an EIN with the irs, you have to enter your real information with SSN, real name, etc. When you enter that into paypal all they see is the EIN, so they can comply with tax rules. Once you enter it, they will not hassle you about tax info any more.

[rokan]

Well, I found out more when I completed the EIN application.

"When will I be able to use my EIN?
This EIN is your permanent number and can be used immediately for most of your business needs, including:

Opening a bank account
Applying for business licenses
Filing a tax return by mail.

However, it will take up to two weeks before your EIN becomes part of the IRS's permanent records. You must wait until this occurs before you can:

File an electronic return
Make an electronic payment
Pass an IRS Taxpayer Identification Number matching program."

If PayPal uses an "IRS Taxpayer Identification Number matching program" and does so directly, the above would be the figure. Of course, that assumes they do, as opposed to two other possibilities being (1) them using a third-party database middleman taking longer to update or (2) them not checking such at all.

It would be interesting if anybody had experience, like did anyone create an EIN shortly before entering it in paypal, how many days before, and what happened?

I think I'll wait 2 weeks then enter the EIN into PayPal. It means I'm ignoring PayPal and may get calls, though I don't know how soon they call, but at least I'm reducing the odds of getting limited due to failing an EIN matchup.

On the matter of what numbers PayPal/eBay calls from, so far I've found evidence they call from both 402 and 801 area codes (though possibly more). If anybody has had a call from a # not appearing as one of those area codes or not appearing at all (unknown anonymous), I'd be interested.

[HurricaneHuntr]

There is so many questions regarding this 20k/200 thing that never gets answered, the only way to really know is to wait and see what happens to you, because nobody is giving out that info,It's like it's priveleged, i have an account that's 2 months past the 2nd email about the tax id. It's not going to hit 20k this year, and i am not planning on putting the EIN on it, why? Because i don't fear the taxes, that's not the issue it's that the account is stealth. People talk in long sentences here about taxes etc.. THAT HAS NOTHING TO DO WITH STEALTH. This forum is about STEALTH Ebay/paypal accounts. You cannot have an EIN or whatever it is on a stealth account. YOU CAN'T! And you sure as hell can't have 10-20 of them. So the options are pretty simple.


1. SPREAD SPREAD SPREAD
2. Hope paypal doesn't limit accounts who didn't provide the EIN because afterall they didn't meet the requirements.
3. When the paypal goes down, ebay allows you to add a new address and paypal doesn't connect 2 and 2 together.

If #2 doesn't work, we hope for #3 and if #2 doesn't work and i was actually the stealth person, i'd be calling up paypal and bi!!tching them out that their requirements specifically state to be issued a 1099 you must meet these requirements and i did not.

And has anyone sucessfully added an EIN to multiple paypals? I mean, i'm all for adding my EIN to all my paypals, i'm not avoiding taxes, i just want to have many paypal accounts because 1 ebay/paypal is not enough and everyone here knows that. I pay my taxes, i keep my eye books and so does my accountant.

[Sandy D]

WARNING TO ALL - the 200 and 20k is just a guide!!!


I got the dreaded pp email asking for this information and I was not even close to 20k.

I will post this once again for everyone.

PP is not only following the IRS rules but they are also being ahead of the game by going after anyone who has the "potential" of hitting 20k.

[HurricaneHuntr]

Yes, but they haven't came out and said that they will limit you if you don't provide it. If you don't provide it and you don't meet the requirements i'd like to see the ebay policy that says they can "Steal" your money until you provide it. What are they going to tell your lawyer? "Oh he can't have the money because we thought he was going to pass the requirement for reporting" that would be cut and dry case. Unless paypal (like amazon did) comes out and makes up their own requirements, they have no right to limit an account who doesn't give them the ein. NO RIGHTS. They can't just hold onto your money. If you were 200/20k can they? Of course it's the IRS law and requirements. But if you don't, again until i am blue in the face i'll say it. THEY CAN'T KEEP YOUR MONEY when you have not violated any of the IRS requirements, or surpassed them. They would have no shot in court fighting to keep it. Could they keep it until january 1st "just incase"? yes, but after that if you aren't 200/20k they can't keep it. Now if the ninja policy like amazon did, that's a whole new game, but i don't see that happening, ebay thrives on sellers selling, amazon has corporations

[jeffweico]

If you meet the threshold and do not provide the information, then the IRS requires that the payment processor (in this case, PayPal) withold 30% of your gross and forward it to the IRS.

You could then file with the IRS to get back whatever is left over after you pay the taxes due.

However, in practice, I don't think that the payment processors will want to do this. They will simply limit your account until you comply, BEFORE you reach the threshold. At least, that is what I believe is most likely to happen.

**This is my opinion but I remind you I am not a tax professional **

[GreenBean]

Moscutter:

Paypal have so advised sellers.

Your comments are inaccurate. Dont throw what is only your ill-considered opinion into this.

HWGA introduced the thread about the 1099 in late 2009. Since that time, INVALUABLE research has been done. Tests have been made on accounts to see what paypal may consider.
Users here have obtained EINs and given them to paypal. Their happy consequences are the accounts are functioning because the latest 1099 needs have been met.
paypal advice sellers to meet the 1099 requirements by a certain time period or there will be limitations.
Take that as a given.

[KingRay]

True, THat is probably what will happen.

As far as questions getting danced around etc. BS. This topic has been discussed so much I am tired of typing it all over and over again. The long tax statements ,etc are a must since its a major part of the EIN. If you want to do stealth then do it. The EIN is for others really anyway. Yes the forum is a stealth forum but there are many other topics that talk about issues you need to handle in order to be stealthy.

I have answered every PM I get daily and help everyone I can in detail. If you cannot find the answers that have already been posted then you arent looking.

As for the OP. I think you are being very paranoid in your worries. If it takes up to 2 weeks to be in their database then tell paypal that you didnt want to post it until you knew it was in the irs database. They probably already know it anyway and dont care. relax a bit. I checked mine and it was in on day 3.

Some of you have it all messed up. Paypal isnt using the EIN and business account upgrades to find out who you are. THey already have that info from when you got your account going. They only need something to give the IRS for the requirement.

I know this is getting long winded but so was your original post.

the answers to all that email mess as been discussed too. The answer is there is no rule. it just depends on their mood I guess. I got asked at 38k on one and near 20k on the other. I have several at 15k or so and nothing yet at all on them. See no rule or rhyme as to what they are doing. Just like any other policy they have. you just have to do it and see. all the replies are people experiences not just contradicting answers to piss you guys off.

[HurricaneHuntr]

I feel like i am watching dumb and dumber, what i said was pretty much straight forward.

i've yet to see proof of it happening, thus i don't believe it.

I've never seen a UFO , I don't believe it.

People could of been limited for violation both parts of the requirements, we DON'T KNOW until it happens to US!

https://cms.paypal.com/us/cgi-bin/ma...ng_us/IRS6050W

Is pretty straight forward.

Maybe i'm naive. July 4th i was notified on one account 9/24 it still works fine. Could this change? Yes, but it's the only thing i can go by because it's the only thing i have found with hours of research.

In fact pp reminds you every 5 days at the EXACT same time of the day the first email was sent.3x and then that was it. I'm not dumb, i'm well versed in everything, but hey i'm just a noob right?

[holyhell]

Originally Posted by Sandy D

WARNING TO ALL - the 200 and 20k is just a guide!!!


I got the dreaded pp email asking for this information and I was not even close to 20k.

I will post this once again for everyone.

PP is not only following the IRS rules but they are also being ahead of the game by going after anyone who has the "potential" of hitting 20k.

This is the same boat as I am in. Got the request when I'm not even in the ballpark of 20k. Maybe they assume, "if this account keeps going at this rate, it's sure to hit the magic amount." And request info. Ugh.

[doughboykilla]

I got hit today with the email as well im hopeing to use the paypal a bit longer then swtich to another paypal that i got that i have'nt used in awhile and let this set till nxt year then it should reset till the next 20k or will it be on my account from now on.

[HowYaLivin]

I have at least 6 accounts that have been getting the email for months now. They are not phasing me at all. If they go down, they go down, lol, I've got PLENTY more.

[MikeyD]

Originally Posted by KingRay

True, THat is probably what will happen.


Some of you have it all messed up. Paypal isnt using the EIN and business account upgrades to find out who you are. THey already have that info from when you got your account going. They only need something to give the IRS for the requirement.

YES! This should be made a FAQ. The only way for Paypal to find out who opened the EIN is to find out what state the company is incorporated in and then look through that states database to find out who the corporate officers are secretary are. There are many ways to keep that info private too. And you don't need to be incorporated to get an EIN. Bottom line: Paypal is NOT going to put HOURS/DAYS into finding out this info because they don't care. They are satisfying the IRS request for the SSN/EIN for 1099 reporting purposes. That's it.

ALL merchant account providers are required to do this. I received letters from my regular merchant account servicers that if they didn't have SSN/EIN they would be withholding 30% from all transactions.

[KingRay]

HOLY CRAP. someone finally got it............ And actually read the post for once and didnt ask the same question that is posted right above their post.

Originally Posted by MikeyD

YES! This should be made a FAQ. The only way for Paypal to find out who opened the EIN is to find out what state the company is incorporated in and then look through that states database to find out who the corporate officers are secretary are. There are many ways to keep that info private too. And you don't need to be incorporated to get an EIN. Bottom line: Paypal is NOT going to put HOURS/DAYS into finding out this info because they don't care. They are satisfying the IRS request for the SSN/EIN for 1099 reporting purposes. That's it.

ALL merchant account providers are required to do this. I received letters from my regular merchant account servicers that if they didn't have SSN/EIN they would be withholding 30% from all transactions.

[unkown5454]

Haha, King, I don't know how you muster the effort to repeat yourself in here so often. But, much respect for being the most knowledgeable person on this forum in regards to this subject and taking the time to assist so many others with it.

[macbook]

Originally Posted by MikeyD

YES! This should be made a FAQ. The only way for Paypal to find out who opened the EIN is to find out what state the company is incorporated in and then look through that states database to find out who the corporate officers are secretary are. There are many ways to keep that info private too. And you don't need to be incorporated to get an EIN. Bottom line: Paypal is NOT going to put HOURS/DAYS into finding out this info because they don't care. They are satisfying the IRS request for the SSN/EIN for 1099 reporting purposes. That's it.

ALL merchant account providers are required to do this. I received letters from my regular merchant account servicers that if they didn't have SSN/EIN they would be withholding 30% from all transactions.

Not exactly true.... All merchant accounts are required to verify that the information provided matches what the IRS has on file. in fact the IRS has a specific program for this called the "IRS Taxpayer Identification Number matching program"

My own merchant account was verified and I was sent a formal letter from "PlPeline data" indicating that my information was matched successfully, the letter also described that the IRS is requiring merchant account providers to verify such information.

I can also assume that pp is required todo the same.

[MikeyD]

I agree. The context is merchant providers, not Paypal. This isn't anything new for merchant accounts. Paypal doesn't follow the rules of standard merchant providers, which is the whole reason they exist in the first place. If they had to, they couldn't provide merchant accounts to consumers, which is what they are essentially doing.