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Old 01-19-2011
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Default EIN is no longer an alternative to a SSN?

so am I correct in assuming that PayPal no longer cares if you run a business with multiple people and EIN number, they will still want a SSN?

Also, just read this on PayPals site....

"Regardless of your business type, we will also ask that you verify your name, physical address and email address to ensure that we report accurately to the IRS."

so EIN is useless if you go over $20k, but if you stay under that limit, PayPal might still hit you with a SSN request?

Has anyone actually tried opening a business account with an EIN recently and been successful?

Last edited by jhohman; 01-19-2011 at 02:08 AM.
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Old 01-19-2011
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Yes--I have used an EIN but at some point they still are likely to require you to give an SSN.
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If you use an EIN that's connected to a corporation then you do not need to provide an SSN. Reason? Corporations are it's own entity, meaning it's the same as a human being, just can't vote or have children.
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Quote:
Originally Posted by Bang View Post
If you use an EIN that's connected to a corporation then you do not need to provide an SSN. Reason? Corporations are it's own entity, meaning it's the same as a human being, just can't vote or have children.
Ive heard it all before, but have you done this and gotten away with it? Lots of people talk on this forum, but have not tested out what they are saying to back it up. I understand what you are saying and theoretically it should work, but I highly doubt PayPal will let that slide. Thanks for the reply tho
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Quote:
Originally Posted by jhohman View Post
Ive heard it all before, but have you done this and gotten away with it? Lots of people talk on this forum, but have not tested out what they are saying to back it up. I understand what you are saying and theoretically it should work, but I highly doubt PayPal will let that slide. Thanks for the reply tho
2 of my stealths are under a Class C Corps name. Crops do not have a social security number because it's not a human being. It's identified by it's EIN/Tax ID number. One reason why PayPal wouldn't ask for a SSN from a Corps is because 1. corps doesn't have one and 2. legally Crops are it's own enity, it's own person controlled by a group of people.

All PayPal needs is it's tax id number. That's how the IRS and every agency/person identifies the business. Just like an SSN.
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Old 01-19-2011
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Whether or not PayPal will require an SSN is up to them. They are a private company and can make their own rules as long as the rules do not violate any laws.

The IRS is fine with reporting under an EIN. HOWEVER - whether it is for a corporation, an LLC, partnership or sole proprietorship, the IRS also REQUIRES that a person be named as the responsible party. If the entity is a publicly traded corporation, then they will accept the name of a board member. If it is a small corporation, they will want the name of whomever is the PRIMARY BENEFICIARY of the money generated by the corporation. Keep in mind, this is information given to the IRS, NOT to PayPal.

NOW... With the new 1099K reporting requirements, YES, an EIN is accepted by the IRS. HOWEVER, the IRS also requires that PayPal take steps to verify the accuracy of the information being reported. So, you must provide them with the EIN and the NAME AND ADDRESS of the responsible party. The IRS does NOT require an SSN to verify this. The information is submitted to the IRS and it either matches their records or it does not. The IRS will NOT correct it for them, or give them any information - they cannot do that by law. Match or No Match. It is that simple. If there is not a match, then PayPal would be required to correct their data OR withhold 20% of your sales (that is SALES, not PROFITS) to be in compliance with the IRS rules.

So, an EIN will need a name associated with it at some point, as well as an address. I see no harm in using a business address that is different from your home address for this. I read over the rules for HOURS and could not find anything saying you could not do this. So, if PayPal does EXACTLY as the IRS requires and does NOT go above and beyond, then it is unlikely they would link on name alone, UNLESS multiple accounts were reporting under the same name and address.

The other possibility is to keep accounts under the threshold that triggers reporting. BUT, if you do this, be VERY SURE to file honestly and pay the taxes owed. Because if you get audited, and the IRS finds you did not report all of your income, do you REALLY THINK that there is ANY CHANCE that you could convince them that it was an error, and that you were only trying to be invisible to eBay and PayPal and not NOT to evade paying your taxes? Of course not.

If you don't believe me, just go to the IRS website and search for 1099k and EIN. It explains everything - there is a summary (short) and the exact rules (VERY long!). It also explains VERY CLEARLY about WHO can be the responsible party named in the EIN application, and WHO cannot.

This is NOT LEGAL ADVICE OR TAX ADVICE. Neither myself nor this forum is a tax expert, and you cannot rely on any posts here from ANYONE when it comes to your taxes. If you need this, then you should seek the services of a professional tax advisor (usually a CPA) or a tax attorney.

Last edited by jeffweico; 01-19-2011 at 05:56 PM.
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'CROPS' would never have an SSN because they aint human. Spell check your posts,Bang can you,ta.
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