IRS announces delay in new $600 1099-K tax reporting threshold

[sheila@ebay]

Please check out the 1099k reporting threshold announcement from December 29th, here. This announcement should cover the majority of 1099 questions.

Have more questions that aren't covered in the announcement? Please post your questions in this thread.

[fern*wood]

I don't think any amount of q&a will help at this point.  It seems way too many sellers just don't believe the answers they have been given a gazillion times.

[pburn]

Especially when eBay, IMO, is complicit in helping these sellers cheat on their taxes and hiding behind the guise of "we'll continue to advocate for you," when there's no doubt the only ones who were helped by this delay are eBay--since they don't have to issue the forms--and tax cheats.

[stephenmorgan]

I was actually looking forward to receiving a 1099K and I am rather disappointed I won't be receiving one this year.  Just because I won't receive one does not mean I or anyone else who does not receive one would  consider being a "tax cheat".

I will download reports of sales activities, fees, shipping and payouts available through the Seller Hub.  I can then reconcile these reports with my own internal sales data to make sure that everything matches up.

IRS knows full well there are loop holes in the Tax Code to allow income to go unreported.  There have been Bills created by Congress before to lower the 1099K requirements (3 that I know of).  Finally a law was passed to lower the requirement to $600 and just days before the Tax Season ended IRS postpones the requirement for a year. 

I did not know that IRS had authority to wavier a Law enacted by Congress, but they did.  What are people  suppose to perceive this to mean?  Is IRS complicit in helping people avoid reporting all income by turning a blind eye to the law?  I think IRS is helped the most by this delay because they were not prepared to deal with a influx 1099K's and complaints that may arise.  

[pburn]

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@stephenmorgan wrote:

Just because I won't receive one does not mean I or anyone else who does not receive one would  consider being a "tax cheat".

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And no one said people who do not receive Forms 1099-K are tax cheats.

[stephenmorgan]

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@pburn wrote:

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@stephenmorgan wrote:

Just because I won't receive one does not mean I or anyone else who does not receive one would  consider being a "tax cheat".

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And no one said people who do not receive Forms 1099-K are tax cheats.

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Thank You, that is very kind of you.

[mikhirs]

I was supposed to receive one last year because of my state threshold.    Ebay payments said I would get one, but I never did.

We'll see what happens this year.

[kh-cathy]

Hi everyone,

This discussion has gotten a bit off topic. Please bring the discussion back to subject established in the original post.

Thank you.

[byronomo]

Question: let's say that you generate $649 in sales, with your most recent sale being for $50.   Ebay then withholds the $50 until you provide a SSN which allows them to generate the 1099.   What if you never provide the SSN and they never release the $50 payment?

In this case, is your reporting requirement the $599 that you ACTUALLY received or should it include the $50 that eBay is holding?

What does eBay do with the $50 if they never release it?  Does it count as revenue for them (eBay) and thus subject to taxation for eBay?

I can't imagine that there is a scenario in which I would/should have to report monies never received.

[dbfolks166mt]

I was supposed to receive one last year because of my state threshold.    Ebay payments said I would get one, but I never did.

We'll see what happens this year.

     I am not sure exactly when Arkansas passed their new $2,500 1099-K issuance requirement or what year it went into effect but eBay had a few issues last year sorting out the states that had their own 1099-K issuance threshold and accidently issued 1099-K's to sellers in some states that were operating under the old Federal threshold, most of these were to California sellers. It is quite possible that they failed issue 1099's to a few sellers who already had a lower reporting threshold. 

     Not sure how the IRS monitors compliance at the state level unless a seller knowingly reports eBay or another third party financial process for failing to issue the 1099 on time. 

[bryo_3145]

I know a guy that it's taken him six years to try to find and fill out his forms. 

[southern*sweet*tea]

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@mikhirs wrote:

I was supposed to receive one last year because of my state threshold.    Ebay payments said I would get one, but I never did.

We'll see what happens this year.

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Same here.  I didn't get one from Ebay OR from Paypal OR a couple of other places who paid me over $600.   Income was still reported by me, just without the STATE required 1099. My state requires one for $600+

[dbfolks166mt]

@mikhirs wrote:

I was supposed to receive one last year because of my state threshold.    Ebay payments said I would get one, but I never did.

We'll see what happens this year.

Same here.  I didn't get one from Ebay OR from Paypal OR a couple of other places who paid me over $600.   Income was still reported by me, just without the STATE required 1099. My state requires one for $600+

     You should report those to your state IRS office. The state may have penalties similar to the ones the Federal government has for failing to issue the 1099's on time and according to the state laws. 

[blingfling123]

@southern*sweet*tea 

I am in the same state as you and I took this all the way up the chain last year because I was sick of asking about it.  From what I understand there is a grey area in the wording of the rules that actually allows them not to report it.  This was from the PP lawyers, eBay and a couple of other platforms.

After a discussion with the MS dept of rev, they confirmed it and then stated they were happy that the threshold was changing.  Probably not happy now as I am sure they, (and other states), were banking on income increases based on the new forced filing. 

[dbfolks166mt]

@southern*sweet*tea 

I am in the same state as you and I took this all the way up the chain last year because I was sick of asking about it.  From what I understand there is a grey area in the wording of the rules that actually allows them not to report it.  This was from the PP lawyers, eBay and a couple of other platforms.

After a discussion with the MS dept of rev, they confirmed it and then stated they were happy that the threshold was changing.  Probably not happy now as I am sure they, (and other states), were banking on income increases based on the new forced filing. 

     The gray area must be state specific. I am in Virginia which has had a 1099-K state issuance requirement of $600 since 2020. I have consistently received 1099's from eBay, PayPal, Venmo..... for the last two years since I broke the threshold at the state level even though I had not broken the federal level.

     It will be interesting to see what the individual states do in 2023 with regards to their own individual issuance thresholds due to the current Federal mess at the moment. It could also be interesting to see if the gray area gets closed and the third party financial processors have to go back and issue the 1099's for prior years based on individual state laws. When Virginia passed their law in 2020 they did so in July but made it retroactive back to 1/1/2020.