eBay Forcing you to give your checking account with routing number and Social Security number

[loriv8473]

Forcing you to give your checking account with routing number and Social Security number . I am not a big seller I just sold a few things I never used that I had then eBay locked my account AFTER selling some stuff saying I had to update my account. I refused to give my private information. I called eBay and of course I was tossed around from one person to another. I asked them why PayPal doesn’t ask you that kind of private information they allow you to use your bank card like a credit card and do two small deposits with one withdrawal to verify. If you are a business they only require your EIN number.  Never do they ask you for your private information. Brittany from eBay the last woman I was talking to said well PayPal is a Financial company and a eBay is a market place. Ok so that supposed to make me feel comfortable giving Them my private information? That is supposed to tell me it’s Secure to do so? I had to ship the stuff I sold to the people because I’m not a jerk but eBay won’t give me my money. I told Britney I was deleting my account she sent me the link. Once I know the people received what they purchased ( because I’m honest)  and want to make sure they got it even though it cost me money. I WAS a victim of fraud twice. My SS# was stolen and it ended up freezing my tax returns and the second time I had my bank account drained. I was told by the police to NEVER give your SS # out other than in person and never give your routing # out unless it’s in person or a government site which have very high security and Only if you need to exp: direct deposit tax return. I have never given it out since. There is NO good reason eBay needs that. They have documentation they took the sales tax out. Personally I think anyone that got ripped off by eBay and they will not give them their money back need to get together and sue eBay. 

[mam98031]

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@lacemaker3 wrote:

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@espresso_warehouse wrote:

This information keeps resurfacing here in a myriad of forms but the rule is extremely simple.

If you sold household items for less than you bought them for(cell phone, laptop, toaster oven) then you do not have to report any of this to the IRS.

If you have an EIN and a business account, hand all the information to your CPA and let them deal with it when they file your business taxes.

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Yes.

But, if you're going to go to the trouble of selling them online, and if they are being sold at a loss, then why not use the loss to reduce your taxable income from other sources, so you can pay less income tax in the end? You have to report it to do that. And its very easy. You can do it yourself. No CPA needed.

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For those just selling stuff from around there house, if when they claim it on their federal tax returns and it proves out to be a loss, they aren't allowed to reduce taxes owed by their losses on this type of sales.

[espresso_warehouse]

There is no reason to claim 'stuff from around the house' on your federal tax returns. Those are household items and are not required to be included on your taxes. Talk to your CPA.

Profit and loss means you are a business. Those two things do not mix. It's either profit/loss OR household items. Can't be both.

I don't understand why this keeps getting muddled on here all the time.

[espresso_warehouse]

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@mam98031 wrote:

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@espresso_warehouse wrote:

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@mam98031 wrote:

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@fitzgeral_19 wrote:

I was planning on selling a few items.  Basically, unused home items and items I bought on eBay and didn’t like.  I was wondering about 1099 since eBay collects taxes,  Based on this thread, I’m wondering if it’s worth it.  I’m not trying to set up a business,

Alternatives?  Thank you 

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@fitzgeral_19 

First it is really important to understand what taxes we are talking about.  Ebay is REQUIRED BY LAW to collect and remit sales tax for about 42 states.  These taxes are paid by the BUYER, not the seller.  So the taxes Ebay collects has shouldn't be a deciding factor for you to become a seller.

Every transaction on Ebay is a business transaction.  There are NO personal transactions on Ebay.  This doesn't mean you have to be set up as a legal entity or company nor do you have to be registered with IRS as some type of corporation or LLC.  Most of us likely operate as Sole Proprietors and report our earnings under our SSNs.  

For many sellers that come here just to sell off some stuff they bought at some point but no longer use never end up paying income tax on the money earned here.  But that doesn't mean you don't have to claim it / report it.  For many sellers once they claim their income on the appropriate form for your Federal Income tax and you take away your expenses, if you are at a break even or loss on selling YOUR used items, then it has no impact on taxes owed.  But keep in mind this is for selling your own already owned items.  The moment you start selling stuff for others or buy used or new items for purposes of resale this changes.

Track your expenses.  All of them.  Keep good detailed records.  If you don't have receipts for those items you bought on Ebay, you can likely go back into the history of your purchases here and find it so you can print it out.

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This post is so far off I don't know where to start. Here is the reality;

• As long as you sell your items for less than they cost you, you don’t have to pay taxes on the money you make.

https://www.1040.com/blog/2019/7/12/selling-stuff-online-taxes-for-etsy-ebay-letgo-and-more/

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It's fine, it's a common mistake.  Not having to pay taxes on it doesn't mean you don't have to claim it.  The two aren't the same.  Yes, as I said before you may not actually owe any taxes because of what you earn on your own used stuff, but you still have to claim it and then reduce it by your expenses.  That will likely prove out that you didn't make a dime off it so you don't have to pay any additional taxes.

But if reporting this money wasn't required, then a whole bunch of sellers could say they are selling their own used stuff and get away with it when they are actually purchasing used stuff for resale.  

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You don't have to claim it. 

[mam98031]

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@lacemaker3 wrote:

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@mam98031 wrote:

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There were some changes made to the Anti Money Laundering laws last year.  IDK about PP or other sites for those that were enrolled before the changes.

https://www.finra.org/rules-guidance/key-topics/aml/faq

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@mam98031, I took a look at that link the other day, but I couldn't see anything that appeared to be related to eBay sellers or marketplace sales. Admittedly, that's some of the most confusing information I have ever seen.

Would you mind highlighting or summarizing what the key takeaways are?

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Finding information written in a language most of us will understand is so difficult for stuff like this.  But here is something I found that might help.  It isn't exactly what I was speaking of before but it may help.  I have a pretty busy day the next couple of days, so I may not get to doing anymore research until later in the week.

https://www.jdsupra.com/legalnews/fincen-seeks-to-expand-scope-of-18845/#:~:text=Accordingly%2C%20fo....

[mam98031]

Additional information on those that consider themselves Hobby sellers or what some refer to as an online garage sale type seller.

https://www.hrblock.com/tax-center/income/other-income/capital-gains-garage-sale/

https://www.findlaw.com/tax/federal-taxes/do-you-need-to-report-your-online-sales-to-the-irs.html

https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-tax-filing-factsheet-for-ebay-sellers/L...

https://www.thebalancesmb.com/how-does-ebay-affect-my-taxes-1140171

[fitzgeral_19]

Thank you.  I used a EIN years ago for a different type business.

everyone is very helpful.

 Numerous sellers mention other venues.  What other venues are available other than Etsy?  
thanks again and have a good day

[lacemaker3]

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@espresso_warehouse wrote:

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@mam98031 wrote:

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But if reporting this money wasn't required, then a whole bunch of sellers could say they are selling their own used stuff and get away with it when they are actually purchasing used stuff for resale.  

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You don't have to claim it. 

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You don't have to claim it if the items were sold at a loss. Otherwise, it's a capital gain, and you do have to report it and claim the income.

The IRS Publication 409 Capital Gains and Losses covers this.

https://www.irs.gov/taxtopics/tc409

Most people who are downsizing and selling their personal stuff would be better off if they reported all the proceeds, and used the associated expenses to reduce the taxable income from the garage sale to zero (if the activity is just a hobby) or even less (if they take a little extra effort to keep records and conduct the activity as a small business).

Documenting and reporting the capital gains and losses is a lot more difficult than doing a Schedule C for a small business or hobby, and it's much harder to justify if you have to defend your position in an audit. You would have to be able to provide the cost basis to document all of the capital losses, as well as for the items that were sold at a profit. People who don't report the proceeds at all are relying on not being audited. If they do get audited, they have to be able to prove that the capital assets were sold at a loss. Just because they were sold at a "garage sale", whether online or otherwise, is not enough.

When you are reporting on a Schedule C as a hobby or small business, you can transfer the ownership of the goods to the hobby/business at the fair market value at the time of the sale. In the simplest case, that could be the sale price, in which case the original owner (the seller) has donated the items to the hobby/business at a personal loss. It's very easy way to establish the cost basis when personal items are sold like this, and well documented too. The proceeds are assigned to the hobby/business and reported on the Schedule C, along with all the associated expenses of running the hobby/business.

[lacemaker3]

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@mam98031 wrote:

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@lacemaker3 wrote:

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@mam98031 wrote:

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There were some changes made to the Anti Money Laundering laws last year.  IDK about PP or other sites for those that were enrolled before the changes.

https://www.finra.org/rules-guidance/key-topics/aml/faq

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@mam98031, I took a look at that link the other day, but I couldn't see anything that appeared to be related to eBay sellers or marketplace sales. Admittedly, that's some of the most confusing information I have ever seen.

Would you mind highlighting or summarizing what the key takeaways are?

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Finding information written in a language most of us will understand is so difficult for stuff like this.  But here is something I found that might help.  It isn't exactly what I was speaking of before but it may help.  I have a pretty busy day the next couple of days, so I may not get to doing anymore research until later in the week.

https://www.jdsupra.com/legalnews/fincen-seeks-to-expand-scope-of-18845/#:~:text=Accordingly%2C%20fo....

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Thanks. That's quite helpful.

This is referring to a proposed change. It's talking about an NPRM (Notice of Proposed Rule Making) to update the "Threshold for the Requirement To Collect, Retain, and Transmit Information on Funds Transfers and Transmittals of Funds That Begin or End Outside the United States ...", which was published Oct 27, 2020, in the Federal Register.  The publication is here, and it appears to be the latest publication on this subject:

https://www.federalregister.gov/documents/2020/10/27/2020-23756/threshold-for-the-requirement-to-col....

The purpose of an NPRM is to ask for comments about the proposal from individuals, groups or organizations that would be affected by it. The deadline for submitting the comments was Nov 27, 2020, and after that, the government has to review and address the comments, then they normally issue a response, which might be a revised NPRM, or something else. It doesn't look like the government has published anything further since the commenting period ended. This change has not gone into effect, and at this point, it may not. Proposals like this frequently go through several iterations before the final decision is taken and the new regulation is published. 

There hasn't been any change made to the regulation yet. The transaction threshold (for recording information including SSN) is still $3,000, and they may or may not lower the threshold at some future time, but we don't know if or when that might happen. Businesses would take this under advisement, but they wouldn't have to change what they are doing at the moment.

[pburn]

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@lacemaker3 wrote:

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Would you mind highlighting or summarizing what the key takeaways are?

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FINRA is the organization that regulates broker-dealers and their agents, and investment advisors and their representatives (along with a couple of other entities). I'm not sure the FINRA link is the best source of information for the subject being discussed, since neither PayPal nor eBay's Managed Payments program would be under the jurisdiction of FINRA.

I would think a citation from FinCEN or the USA PATRIOT Act CIP or the BSA and/or AML themselves--specifically as to whether they may or may not apply to money processors rather than broker-dealers or investment advisers--would be more appropriate.

[pburn]

@lacemaker3 

@mam98031 

@readabouthorses 

This post will concern itself with the subject of whether eBay's Managed Payments program can required a physical address for participants. It does not address the subject of whether eBay sellers must report taxable income. If anyone would like links to the websites I used for this research, please contact me via private message.

ASSUMPTION: eBay's Managed Payments program is operated under the money transmitter license granted to eBay Commerce Inc.

• Money transmitters are classified as MSBs (money services businesses) and therefore fall under the purview of the Financial Crimes Enforcement Network (FinCEN) and must comply with BSA requirements applicable to financial institutions.
• The "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism" (USA PATRIOT) Act requires financial institutions to identify customers in compliance with its "Customer Identification Program" ("CIP"). 
• CIP requires financial institutions to obtain a residential or business street address for all customers. Individuals can provide an APO or FPO or "the residential or business street address of next of kin or of another contact individual." Post office boxes are not an accepted address. (There are alternatives for people in so-called "Address Confidentiality Programs.")

Further clarification of the requirements for address verification:

[readabouthorses]

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@pburn wrote:

@lacemaker3 

@mam98031 

@readabouthorses 

This post will concern itself with the subject of whether eBay's Managed Payments program can required a physical address for participants. It does not address the subject of whether eBay sellers must report taxable income. If anyone would like links to the websites I used for this research, please contact me via private message.

ASSUMPTION: eBay's Managed Payments program is operated under the money transmitter license granted to eBay Commerce Inc.

• Money transmitters are classified as MSBs (money services businesses) and therefore fall under the purview of the Financial Crimes Enforcement Network (FinCEN) and must comply with BSA requirements applicable to financial institutions.
• The "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism" (USA PATRIOT) Act requires financial institutions to identify customers in compliance with its "Customer Identification Program" ("CIP"). 
• CIP requires financial institutions to obtain a residential or business street address for all customers. Individuals can provide an APO or FPO or "the residential or business street address of next of kin or of another contact individual." Post office boxes are not an accepted address. (There are alternatives for people in so-called "Address Confidentiality Programs.")

Further clarification of the requirements for address verification:

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My roadside mailbox is lying on its side in my garage and has been for several years.

This is interesting but I wonder why PayPal is just fine with my PO Box as my address??

Wait ... I can solve this ... I own the house right down the road that my daughter lives in ... I could just use her address since she has a mailbox and technically the house is mine.

This could be the enough is enough for me. I asked myself a couple of questions earlier today that came to the enough is enough conclusion. I can't compete with the massive Media Mail abuse in my category ... I don't need the money .... I don't need the hassle ... I was just happy to help other people find a magazine they've been looking for or help someone complete their own collection.  I do have my own Facebook Business page so I think I'll just try to finish that and be done with eBay.

[pburn]

@readabouthorses 

While your idea of using the address of another property you own would work on one level, the complication you may possibly confront would be changing your bank records--and perhaps even other documents you use to identify yourself, like your driver's license, to match the address you've given Managed Payments. (eBay's requiring a match, right? As part of the verification process?) I think I've read threads where people have had to produce a copy of their driver's license . . . I'm not sure what eBay would do if your driver's license address didn't match the address you've submitted for Managed Payments.

All other things being equal, I think I would contact my financial institution to ask for their advice. If you're still contemplating using your credit union, they might be able to help you figure out a solution; for example, maybe they'd allow you to have two addresses on the account--sort of like eBay's "primary address" and "ship to" address. Your credit union has to comply with FinCEN regulations (BSA/USA PATRIOT, etc.), so they should be familiar with issues that might come up in your geographic area. I'm kind of surprised your credit union will allow you to use a post office box, but there are circumstances that allow them to grandfather in existing customers.

Are you sure your residence does not have a rural route identification of any sort? I live in a very rural state, and, while I'm in a town, everyone I know who lives in the country has a residential address of some sort. If you do, I would think your credit union would allow you to use that as your "address of record," so to speak, but keep your post office box on record as far as mailing any documents to you.

Frankly, I don't think anyone would blame you if you choose to stop selling on eBay. Good luck with whatever you decide. Sorry I couldn't be the bearer of better news.

[mam98031]

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@pburn wrote:

@readabouthorses 

While your idea of using the address of another property you own would work on one level, the complication you may possibly confront would be changing your bank records--and perhaps even other documents you use to identify yourself, like your driver's license, to match the address you've given Managed Payments. (eBay's requiring a match, right? As part of the verification process?) I think I've read threads where people have had to produce a copy of their driver's license . . . I'm not sure what eBay would do if your driver's license address didn't match the address you've submitted for Managed Payments.

All other things being equal, I think I would contact my financial institution to ask for their advice. If you're still contemplating using your credit union, they might be able to help you figure out a solution; for example, maybe they'd allow you to have two addresses on the account--sort of like eBay's "primary address" and "ship to" address. Your credit union has to comply with FinCEN regulations (BSA/USA PATRIOT, etc.), so they should be familiar with issues that might come up in your geographic area. I'm kind of surprised your credit union will allow you to use a post office box, but there are circumstances that allow them to grandfather in existing customers.

Are you sure your residence does not have a rural route identification of any sort? I live in a very rural state, and, while I'm in a town, everyone I know who lives in the country has a residential address of some sort. If you do, I would think your credit union would allow you to use that as your "address of record," so to speak, but keep your post office box on record as far as mailing any documents to you.

Frankly, I don't think anyone would blame you if you choose to stop selling on eBay. Good luck with whatever you decide. Sorry I couldn't be the bearer of better news.

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IDK about the Drivers license as not everyone has to submit that.  So are you saying that they go out and verify that without us supplying the DL to them?  IDK, which is why I ask.  That could answer why for some the DL is required, they found a discrepancy and they are trying to resolve it.

@readabouthorses has a rural address for their home but due to constant vandalism of their mail box they choose not to use it.

[pburn]

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@mam98031 wrote:

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IDK about the Drivers license as not everyone has to submit that.

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I said "may possibly confront" and "like your driver's license" in order to suggest the possibility, not to present it as fact.

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@mam98031 wrote:

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So are you saying that they go out and verify that without us supplying the DL to them?

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No, I didn't say that, nor am I saying that now. What I said was:

" I've read threads where people have had to produce a copy of their driver's license . . . "

And if a driver's license has been requested--for whatever reason--and had one address and Managed Payments had been given a different address (which was the context of the comment--whether s/he could use the address of a separate property for Managed Payments), the verification process "may possibly" identify the discrepancy.

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@mam98031 wrote:

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@readabouthorses has a rural address for their home but due to constant vandalism of their mail box they choose not to use it.

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Actually, I think s/he said his/her mailbox was "taken out by a hurricane and it was just easier to get a PO Box than it was to put it back up." 

It doesn't matter why s/he chooses to use a post office box. Compliance with BSA/USA PATRIOT Act/AML laws, rules and regulations requires eBay to obtain a physical residential address. Where a person chooses to receive mail is different from where that person resides. The point of the law is to be able to find where a person lives--like, literally,  get in a car and go there.

[readabouthorses]

@pburn 

All I'm asking is ... if I change my CONTACT information to my physical address then what methods of CONTACT will that address be used for. If the physical address is just for verification then don't call it CONTACT address.

So my question all along has been, contact how? 

And even if I change my contact address to my physical address, it still won't be the address that will show on any bank statements I would provide because bank statements are sent in the mail so would require I provide a valid MAILING address to the bank.

I still can't believe that no one in the whole eBay Adyen system did not see this coming? Can they be that out of touch with real life? If I were their Mom I would be asking "What WERE you thinking?"