Problem with eBay's W-9 form. Payouts on hold

[rumcreekss]

Hi everyone,

I'm a sole proprietor / single member LLC. eBay put my funds on hold wanting me to update my W-9 form. Under tax classification there is a dropdown box with three options: C-Corp, S-Corp, Partnership.

I am none of those. I'm a single member LLC. Furthermore, under my "Business Info" everything is correct. Under "Tax Information" the box is checked "Rum Creek Sales and Service LLC is owned by an individual." My SSN is correct. My EIN is correct. I called eBay and they told me to "consult my tax advisor." Thanks, eBay.

Have any of you single member LLCs run into this? How did you resolve it? There SHOULD be a fourth option in that dropdown box for us but there is not. Until I get this resolved my payouts are on hold.

Please advise!!

[mtgraves7984]

@rumcreekss 

I don't know your solution, but here's another similar post. Might want to check it out for replies, too. Good luck.

W-9 Tax Withholding - The eBay Community

[lacemaker3]

@rumcreekss 

Here is an eBay Help page which offers information that should/may/could be relevant to your situation. You should click the link and search for information to help you. I have copied some FAQs that seem like they may be helpful, but there is other information there as well.

https://www.ebay.com/sellercenter/resources/changes-to-ebay-and-your-1099-k

The link in the fist screenshot goes to the IRS standard W-9 form, which you are asked to submit. This form does allow you to choose "Individual/Sole Proprietor" in Box 3A, which sounds like what you should do based on what you have said.

https://www.irs.gov/pub/irs-pdf/fw9.pdf

FYI, if you are an Individual/Sole proprietor, then you are a "disregarded entity" according to the instructions for form W-9 (see the link above).

[rumcreekss]

This is very helpful thank you. I think filling out and uploading the physical form is the way to go. Additionally, I spoke with my CPA and he suggested reporting to eBay that because I'm a disregarded entity that I report myself as a sole proprietor only.

[rumcreekss]

Yes that was exactly my same situation but with no resolve. Thank you though for your reply.

[rebootpcsllc]

I'm having the exact same issue.  Things like this REALLY give me pause that my income relies on this company.

[rin1175llc]

Hello! I called eBay yesterday and they did say this a bug on the form they're working on fixing. There's nothing you can do until they resolve it. It's a bit crazy that it went out this way, but that's the information I got around 6 PM CT yesterday. 

[treasurecovecollectiblellc]

I am having the same issue and I have called a few times over the past few days. Still no update on an eBay fix. This is very frustrating from a seller and is making me rethink some things.

[lacemaker3]

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@rumcreekss wrote:

This is very helpful thank you. I think filling out and uploading the physical form is the way to go. Additionally, I spoke with my CPA and he suggested reporting to eBay that because I'm a disregarded entity that I report myself as a sole proprietor only.

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@rumcreekss,

Yes, according to the information in the FAQs from eBay, that is what you should do.

There are two different kinds of business account on eBay. You should check and make sure that your eBay business account is set up correctly as a sole proprietor.

Follow these instructions to edit your account type, and make sure that it is set up as a "sole proprietor", not as a "legal entity". This could be what is causing the problem; if your account is set up as a "legal entity" then you wouldn't see the option for "sole proprietor" on the W-9.

https://www.ebay.com/help/account/creating-account/creating-ebay-account?id=4191#section6

If your eBay account is for a sole proprietor, then are you entering your own name in line 1, as a sole proprietorship/LLC on the W-9? Make sure it is exactly as it is shown on your 1040.

Also, you should enter your SSN number. I know it says that you can use an EIN if you have one, but if you entered your EIN and it wasn't recognized by the IRS, then just enter your SSN instead. With this business set up, you would file a Schedule C Profit or Loss from a Business, with your 1040 personal tax return, and that is filed under your SSN.

This is from the same link as I posted before:

https://www.ebay.com/sellercenter/resources/changes-to-ebay-and-your-1099-k

[rumcreekss]

Thank you. My information is exactly as you refer to. Exactly. Under "Business Info" my "Business Type" is listed as Sole proprietor/Single-member LLC with EIN because I the owner have one.

All I need is a line on the W-9 dropdown under business classification. I need Sole proprietor/Single Member disregarded entity as an option. That was not available at the time of my calling. According to posts above, this is a bug that eBay is fixing.

In the meantime, after my third call I was TOLD that I must choose S-Corp. I argued about it. I told them I have never filed that paperwork, that it didn't make sense. The eBay rep INSISTED that this was the "fix." I asked if this call was being recorded. She said yes. I noted her name, the time etc so that I have proof that when my account gets all screwed up that it's on them at this point. For the time being, my payout ban has been lifted. But if this "bug" gets fixed I want my account changed to the correct setting.

[itsallgood1965]

I'm in the same boat.  Are you still having this issue?  

[bcharlton10]

Same here. Payouts held for 6 days now. Called ebay every day. Reps were hepful and spent a lot of time with me. But the resolution always gets esculated to IT to fix the issue and they havent communicated any efforts they attempted. Also I cannot submit the form as i reached maximum attempts. 

[ruby_deals]

In the same boat here as well. Payouts held almost a week, no way to submit the electronic W-9 form. 

Fine, sometimes automated processes don't work, but how is there not a manual workaround that a human can accept and submit my W-9 while the automated form is broken?

[pjsdeals123]

I'm in the exact same boat. I am also a single member LLC with the correct documents from the IRS.   I've uploaded everything they requested (although I've already done that in previous years and nothing has changed).  They said I would get a payment this morning (even had a banner on my payments page) and then that went away and no funds sent.  Still on hold after 30 minutes.  If anyone knows a good solution I would really appreciate it!

[pelequip]

I'm in the same boat. A rep advised me to send a scan of my W-9 to informationreporting@ebay.com.

I did so on Thursday and was told payouts would be released at noon on Friday. have spoken to 20+ team members since then and am still getting the runaround. Payouts still on hold and is putting the crunch on our small business as we are starting to fear we will never see it.