wooden_flower Volunteer Community Mentor.
mam98031 • Volunteer Community Member • Buyer/Seller since 1999
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Recently eBay, as required by the IRS, sent a letter and notice to a very small number of sellers requesting they complete a physical Form W-9. This was because there were discrepancies with the Tax ID and name provided to us, which was then reported on their Forms 1099-K for the 2020 tax period.
If you received a notice by mail, we ask that you complete the Form W-9 and return it by December 17th. In addition to the notice, you should have received a banner communication upon logging into your eBay account which contains a link that will allow you to digitally upload your Form W-9. In order to process your updates in a timely manner, we encourage you to use the upload feature to avoid delays.
If you did not receive a letter and notice you are not required to complete a W-9.
Thank you for selling on eBay.
That sounds like a fake. Payment processors never withhold tax. A W9 is requested if you are providing contract labor or services, which you are not. If eBay does not have your SS#, they would send you a message and ask you to update your records online.
Can you post a photo of the letter, with your name and address, and any other personal info covered?
A new scam to warn folks about?
I chatted with eBay and they said that the letter was legit.
Wow, I am totally surprised by that. I have never heard of any payment processor using the w9 to collect taxpayer info, or to threaten backup withholding. Thank you for posting the chat.
@wooden_flower wrote:
That sounds like a fake. Payment processors never withhold tax. A W9 is requested if you are providing contract labor or services, which you are not. If eBay does not have your SS#, they would send you a message and ask you to update your records online.
Can you post a photo of the letter, with your name and address, and any other personal info covered?
A new scam to warn folks about?
You're right that it's always good to be cautious @wooden_flower so I'm glad @mjdykes2009 chatted with eBay support to verify the letter they received. Some sellers do need to send in a W9 form and payments will be blocked until it's received.
OK, I find this a bit disturbing. Please provide a link to describe this process. What are the reason that Ebay would ask for a W9? What qualifies a seller to be asked for such a form?
I sell on multiple sites and I've simply never heard of a marketplace like Ebay requiring this information.
More DETAILS please.
@mam98031 wrote:
OK, I find this a bit disturbing. Please provide a link to describe this process. What are the reason that Ebay would ask for a W9? What qualifies a seller to be asked for such a form?
I sell on multiple sites and I've simply never heard of a marketplace like Ebay requiring this information.
More DETAILS please.
I'm sorry but I don't have a lot to tell @mam98031. Form W9 is an IRS form for providing necessary information to a person or company that will be making payments to another person or company.
While I can't get into specifics, there are certain instances in which we may require this of a seller and it appears the OP fell into one of those instances. You could try contacting the Payments team to see if there is any additional information they would be able to share with you, but this is all I have to provide.
Let me start of with say that I KNOW it is not you making it difficult to get the information. And no matter what ANYONE tells you the process for Ebay requiring a W9 is NOT account specific information.
The Payment team uses this as an excuse all too often when they do something that they don't currently have a written and published policy for.
If the Payment Team is going to require the W9 in certain situations, then they should be able to explain WHAT situations put a seller in this position. That is NOT account specific information anymore than in a written policy telling seller what causes a defect on a seller's account. There are specific reasons that cause a defect just as there are specific reasons that Ebay will require a W9.
It probably goes something like this:
A W9 is require for the following reasons [but not limited to]
US seller that is a foreign resident
Real Estate Transactions
And for a host of other reasons, I'm sure. And yes for 2021 Ebay can withhold up to 24% for Federal Income taxes.
But this whole process could be reduced to a written policy so that ALL sellers are aware of this without one hint of account specific info.
https://www.irs.gov/pub/irs-pdf/iw9.pdf
https://www.investopedia.com/articles/personal-finance/082714/purpose-w9-form.asp
There is lots more information out there on this subject. I think if the payment team really wanted us to know and understand why Ebay would require this they would write a policy guideline instead of a SURPRISE policy! I can't stress how much sellers HATE to learn by SURPRISE!!
Does anyone know this. Are W9's only for Sub Contractors? I'm unclear on this. And if it is only for Sub contractors, when did seller ever qualify for being a Sub Contractor to Ebay?????
According to the IRS website:
Use Form W-9 to provide your correct Taxpayer Identification Number (TIN) to the person who is required to file an information return with the IRS to report, for example:
- Income paid to you. <<------
- Real estate transactions.
- Mortgage interest you paid.
- Acquisition or abandonment of secured property.
- Cancellation of debt.
- Contributions you made to an IRA.
This is from the Paypal website, but does apply to Ebay also:
- In the coming months, we may ask you to provide tax information like your Employer Identification Number (EIN), Individual Tax ID Number (ITIN) or Social Security Number (SSN), if you haven’t provided it to us already. For background, generally businesses use an EIN, while sole proprietors and individuals will use an ITIN or Social Security Number.
- The 1099-K reporting requirement was part of the American Rescue Plan Act of 2021 passed earlier this year by Congress and signed into law by the President. The effective date for these new changes is January 1, 2022.
@*lady*madonna* wrote:According to the IRS website:
Use Form W-9 to provide your correct Taxpayer Identification Number (TIN) to the person who is required to file an information return with the IRS to report, for example:
- Income paid to you. <<------
- Real estate transactions.
- Mortgage interest you paid.
- Acquisition or abandonment of secured property.
- Cancellation of debt.
- Contributions you made to an IRA.
I read that and thank you for posting this. But the balance of those have nothing to do with regular sellers and only with Sub Contractors, which we are not. There in lies my confusion.
That bullet point goes on to say something like if there is a problem verifying your SSN or TIN.
https://smallbusiness.chron.com/subcontractors-fill-out-w9-31850.html
https://turbotax.intuit.com/tax-tips/self-employment-taxes/what-is-irs-form-w-9/L2f51WOD7
It is my understanding that we hire Ebay as a vendor to run our listings within the rules of the site. We are not employees or sub contractors or independent contractors of Ebay. We are CUSTOMERS of Ebay.
Now I get it that with the Money Processing rules things can change a little bit, but I don't think these facts change. But I'm very open on this subject and more than willing to learn more so I can have a better understanding.
@*lady*madonna* wrote:This is from the Paypal website, but does apply to Ebay also:
- In the coming months, we may ask you to provide tax information like your Employer Identification Number (EIN), Individual Tax ID Number (ITIN) or Social Security Number (SSN), if you haven’t provided it to us already. For background, generally businesses use an EIN, while sole proprietors and individuals will use an ITIN or Social Security Number.
- The 1099-K reporting requirement was part of the American Rescue Plan Act of 2021 passed earlier this year by Congress and signed into law by the President. The effective date for these new changes is January 1, 2022.
That doesn't say anything about a W9 but only their need to have this information for some accounts. That completely sounds reasonable to me.
