1099-K form sent in error by ebay

[lindaevelyn]

Ebay sent me a 1099-K form for 2021 tax year.  However, my sales were below $6000.00 and my number of transactions below 127!  So in no way would I qualify under the limits set for the year 2021 which was $20,000 and 200 transactions!  Looks like someone at Ebay made a big mistake and applied the new limit of $600 to 2021 sales and didn't bother to wait until this year, 2022 when they take effect!  This would mean I would have to report this to IRS on my tax return this year and pay a combined tax on it of 30% that I shouldn't have to, but under the law, I am duty bound to report any income that a filer reports to the IRS under form 1099K!  I wonder how many other people this has happened to?  How will ebay correct this?  Will they pay the tax I owed since it is their mistake?  I have contacted them and all they say is yes, this happened, especially in California, and they would fix it.  But when??? I need to file my taxes and still have hear nothing from ebay.  Everyone - if you got a 1099-K make sure you really were supposed to!!

[stainlessenginecovers]

You are in Cali. Cali required anything over $600 to be given a 1099. (although it was supposed to be for 'uber' drivers etc., looks like Ayden didn't get that message or decided to 'just do it'). 

The 'minimums are a requirement, but a company can issue one for any amount less than.

[sin-n-dex]

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@lindaevelyn wrote:

Ebay sent me a 1099-K form for 2021 tax year.  However, my sales were below $6000.00 and my number of transactions below 127!  So in no way would I qualify under the limits set for the year 2021 which was $20,000 and 200 transactions!  Looks like someone at Ebay made a big mistake and applied the new limit of $600 to 2021 sales and didn't bother to wait until this year, 2022 when they take effect!  This would mean I would have to report this to IRS on my tax return this year and pay a combined tax on it of 30% that I shouldn't have to, but under the law, I am duty bound to report any income that a filer reports to the IRS under form 1099K!  I wonder how many other people this has happened to?  How will ebay correct this?  Will they pay the tax I owed since it is their mistake?  I have contacted them and all they say is yes, this happened, especially in California, and they would fix it.  But when??? I need to file my taxes and still have hear nothing from ebay.  Everyone - if you got a 1099-K make sure you really were supposed to!!

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You're supposed to report your income whether or not you receive a 1099K. (And some states have a lower threshold).

Just because you didn't earn 20K doesn't mean what you did earn is tax-free.

C.

[fern*wood]

What makes you think you didn't have to report your sales that were under 20k?  You have always been supposed to report them whether a 1099k was issued or not.

[kensgiftshop]

@lindaevelyn 

It doesn't matter if you get a 1099 or not, you're supposed to be reporting your income on your income taxes.

[dbfolks166mt]

     I am in Virginia who changed the reporting threshold requirements in 2020. I had always been reporting the income anyway, which everyone should have been doing, but I actually appreciated getting the 1099 since it served as a bookkeeping check and validation of my own numbers. 

     EBay is not going to pay your income tax either federal or state since you should have been paying it all along.  There is no 30% tax bracket for 2021. What tax bracket and % you fall into depends on your net income and your filing status.

[tealt]

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@stainlessenginecovers wrote:

You are in Cali. Cali required anything over $600 to be given a 1099. (although it was supposed to be for 'uber' drivers etc., looks like Ayden didn't get that message or decided to 'just do it'). 

The 'minimums are a requirement, but a company can issue one for any amount less than.

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This whole issue is a hot mess right now.

Some who have called CS were told it was a mistake and eBay would "fix it".  Others were told that it is "for your information only".  There are user postings on this board asserting that these are genuine 1099K's that have already been sent to the IRS.  There are vague references that eBay is gathering names of users that are affected and is investigating.

California state seller help pages on this topic are murky and almost contradicting.

That eBay  would "just do it" without a whisper to the sellers affected seems wrong somehow.  Sellers who filed their returns unaware that they have a 1099K from eBay are likely to hear back from the IRS or their state income tax agency. 

Your inference that Adyen did this (presumably without eBay's knowledge) is interesting .  In the 200+ posts I've read so far this week, that may be the first time anyone suggested that it wasn't eBay itself that was in charge of sending 1099K's.

EBay itself has maintained radio silence so far on the site on this topic.

[lizzie101234]

Hi,  Ebay told me to rest assured this was not reported to the IRS.  I sold 5 items for less than $1000.00.  This was SUPPOSEDLY a technical issue.   Someone is going to correct this and reach out to those who received the 1099Ks in error.

[clx901]

Why are we having so many tax policeman here, LOL. People are talking about they are getting the 1099k even though Ebay was not supposed to issue them one, PERIOD.

[dryophelia]

@clx901 

Adyen is the issuer of the tax forms. 
They are required by law to issue the 1099K for amounts above the predetermined value set by each jurisdiction. 
I don’t think there is a law that says it is forbidden to send the form for those who fall below the predetermined amount. 

What is the worst thing that could come from getting 1099K?

Doesn’t having the document make filing a bit easier?

[mkaczorsee]

The 1099 makes your reporting your income easier. 

[downunder-61]

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@clx901 wrote:

Why are we having so many tax policeman here, LOL. People are talking about they are getting the 1099k even though Ebay was not supposed to issue them one, PERIOD.

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Because just receiving a 1099k means absolutely nothing, changes absolutely nothing, because we all report out profit to the IRS each year the issuance of a peice of paper is totally and 100% irrelvant to all of us.

[icenine27]

I just got off the phone with eBay. The person I talked to said it was a mistake.  The form was sent out to a huge amount of sellers in CA. She said to please disregard it and they are working on fixing it, but eBay would not provide any documentation or verification that an error occurred. 

[bbravo65]

...one paid tax or not is none of anyone's business...

...can anyone looks straightly into a mirror and admit no cheating in taxes...???

...even the politicians whom wrote all the laws to grab as much tax monies as possible under any made-up reasons also are tax's evaders...but no one could pull them out under the sun...

...tax to death...

[dbfolks166mt]

This whole issue is a hot mess right now. Understatement of the year. 

Some who have called CS were told it was a mistake and eBay would "fix it".  Others were told that it is "for your information only".  There are user postings on this board asserting that these are genuine 1099K's that have already been sent to the IRS.  There are vague references that eBay is gathering names of users that are affected and is investigating. Anyone who "calls" customer support is wasting their time if they expect a correct and consistent answer. CS is abysmal with basic questions let along something this complex. 

California state seller help pages on this topic are murky and almost contradicting.

That eBay  would "just do it" without a whisper to the sellers affected seems wrong somehow.  Sellers who filed their returns unaware that they have a 1099K from eBay are likely to hear back from the IRS or their state income tax agency. That is a given since this can be detected via bots although given how far the IRS is backlogged it may be 2-3 years down the road before the audit happens. 

Your inference that Adyen did this (presumably without eBay's knowledge) is interesting .  In the 200+ posts I've read so far this week, that may be the first time anyone suggested that it wasn't eBay itself that was in charge of sending 1099K's. I brought this up over a year ago when the legislation was about to pass. At that time eBay confirmed and announced that they would in fact be the ones distributing the 1099's. Of course there is no way possible eBay can do this without the data from Adyen since eBay does not have a financial component capable of handling this on their own which is why Adyen was a replacement for PayPal. 

EBay itself has maintained radio silence so far on the site on this topic. Probably a wise move until they get their act together and can figure out what has gone wrong. There are several "Key" dates associated with the 1099's some are eBay's responsibility some are the recipients responsibility. I won't go into all the detail on those but you can access the on the IRS web site for specific deadlines and actions required.