Ticketmaster, PayPal, eBay are hassling customers to report sales even though the IRS says they don’t have to

The Hill ^ | 03/02/23 6:00 AM ET | BY TOBIAS BURNS

[RandFan]

People are being told they need to provide their Social Security numbers to online platforms and cash transfer app companies for the sales of things like clothes and concert tickets over $600, even though the IRS says they don’t need to.

The prompts from companies like eBay and Ticketmaster are the result of a change in the tax law that was reneged last-minute by the IRS ahead of the 2023 tax filing season.

The switch is causing a lot of confusion among taxpayers and tax professionals — and even within the IRS itself.

The threshold for reporting business income or personal income from using these apps was supposed to change this year. It was downgraded from sales above $20,000 to sales of above just $600 and was part of a provision passed in the 2021 American Rescue Plan.

That means you’d need to pay a capital gains tax on sales worth more than $600 if you used these apps to receive a payment.

But the IRS decided to delay this rule change from tax season 2023 to tax season 2024, citing “confusion during the … 2023 tax filing season” and the need to “provide more time for taxpayers to prepare and understand the new reporting requirements.”

The IRS said some taxpayers may be receiving 1099-K forms “in error.”

[RandFan]

This is the Dem law they passed isn't it? Very unpopular one.

Don't let the media spin it!

[Dilbert San Diego]

Just because someone is selling something on eBay, or doing transfers on PayPal , does not mean that the cash transaction is a taxable transaction.

But I think we all know, in case of an audit by the IRS, you are guilty until proven innocent. When all these people get audited ,it will be up to them to demonstrate that the transactions in question are not taxable, and that’s the reason they were not reported on their income tax returns.

[BipolarBob]

Note, these are all woke companies. They want YOU to pay more taxes while they try to avoid them like the plague.

[TheBattman]

Democrats in action...

I’ve thrown red flags ever since Biden pushed this - consider the consequences:

You are NOT an online business - you simply use one of these services to buy and sell online - clean out your garage and have some useful stuff to unload? Well - if the grand total for the year of “sales” is $600 - you were supposed to report it (and the Biden policy made the processors do the reporting).... So:

That extra chainsaw you never use... you paid $600 for it (plus another $30 for the extra chain) and $40 for a case... you are in it $670... You sell it on FB Marketplace for $350... using PayPal...

You also have a bicycle... that you paid $800 for a few years ago... but ever since your injury - you just don’t ride any more - so it gets listed and sold for $300...

You have not made a profit by any measure - but because you had “income” through Paypal payment processing - it gets reported to the IRS as “income”... and technically - you pay income tax on it -

And many don’t know - crypto currency is treated very similarly - Say you initially bought $1000 worth. It went up for a while, then the bottom kind of fell out - so you waited for a bit of a positive move and sell... you got $700 of your original 1000 back... and the $700 is reported to the IRS as “taxable income”...

What the heck?

[ridesthemiles]

NOT capital gains tax.

That would require data on cost of item when obtained & sales price AND LENGTH OF TIME-—Over or under a year for short term or long term capital gains.

Capital Gains is entirely Another kettle of fish.

IF IRS wants the cash transacted to be reported to the IRS by PAYPAL, etc, then PAYPAL,etc NEEDS SOC SEC NUMBER, etc.

I have filled out 1099’s for over 58 years.

I couldn’t even guess how many.

When I did books for small businesses and a 1099 was called for, AND the recipient refused to give me Soc Sec number, etc., I would type up a 1099 with the information I DID HAVE and where the box was for SS NUMBER-—I would write REFUSED.

At least MY client who had paid the $$$$$ was legally filing the 1099, no penalty for him.

Does PAYPAL also transfer money-—just like Western Union? NO “SALES” involved???

[ridesthemiles]

The items you describe would fall under “Capital Gains’ tax-—if anything. NOT ordinary Income.

HUGE difference.

[PAR35]

Just because someone is selling something on eBay, or doing transfers on PayPal , does not mean that the cash transaction is a taxable transaction.

And why this:

" means you’d need to pay a capital gains tax on sales worth more than $600 "

I would think most of these sales would be ordinary income. And should be offset but cost of goods sold.

[ridesthemiles]

I also kept track of the multiple times I tried to get the SS numbers I needed.

[jdege]

It’d be capital gains only if there was a gain.

If I buy something new, and then sell it twenty years later for 25% of what I paid for it, it’s not a capital gain. It’s not income of any sort.

And it shouldn’t appear on any 1099.

[reviled downesdad]

Ebay also forced out PayPal as a choice for sellers to be paid.

[oldtech]

That is rather like what I was thinking...that companies doing certain kinds of business are wanting their customers to pay taxes that these companies would otherwise have to pay. Tell me I’m wrong...if I am.