eBay

longtimealaskan · ‎02-13-2022

I received a notice from ebay that they are holding my payouts until I give them my social security number. I have no issue with the 1099. I'm not a big seller and the vast majority of things I sell are things my wife and I bought over the years for personal reasons, used them, and then eventually stopped using them. Although I sell some items to make a profit, I mostly sell items that we bought but no longer use. I'm sure I would be showing a loss on the 1099. Either way, I don't have a problem reporting my profit or reporting my loss to the IRS. I've already set up an Excel spreadsheet listing the items I sold, the sell dates, the selling price of the item and any expenses like ebay fees, shipping cost, insurance, shipping labels, packaging materials, etc.

My issue is giving my social security number to ebay. I cringe at giving ebay or any other online business my personal/financial information. I wouldn't trust the ebay clowns to protect my information. Bigger and better firms than ebay have been hacked and personal information for the firm's clients stolen. My personal information has been hacked from large firms 4 times already, firms in theory more concerned about protecting personal information than ebay is likely to be. I'd rather ebay withheld the 24% and sent it directly to the IRS. I will have to file a 1099 anyhow so why not eliminate the weakest link with respect to protecting my social security number? I don't mind waiting to get my money back from the IRS. I'm more concerned about protecting my personal information. If ebay doesn't have my social security number they can't lose it or have it stolen from them. Do you feel comfortable trusting ebay to properly protect your personal information?

What's wrong with my plan? Any and all constructive comments and thoughts are welcome.

jda04121 · ‎02-13-2022

That is true because employers can not simply keep it. However, the dollars will not be applied to the individuals. As it says, the money is sent in aggregate. Good luck trying to get the amount that applies to you.

jda04121 · ‎02-13-2022

Simple. Then find something else to do with your time.

slippinjimmy · ‎02-13-2022

@longtimealaskan wrote:

Ebay said if I did not provide them with the SS# they would withhold 24% and send it to the IRS. Yes, they could stop me from selling

Did they say what they would do with the 76%?

I am 99% certain they will not be sending it to you. At some point down the road they will send it to your State treasury, same department that handles abandoned bank accounts etc.

You can eventually claim the money from them (it could take a year or more) and I00% they will require your SSN before they release the funds to you.

Here is a parallel, if you got a part time job at a local business, they won't hand over your paycheck if you don't give them your SSN, who would you trust more with that info, eBay or the independent burger joint down the street who keeps their payroll info in a filing cabinet in the back office.

Paranoia strikes deep
Into your life it will creep

longtimealaskan · ‎02-13-2022

I admit I'm mixing apples and oranges, probably incorrectly. The 24% withholding occurs if you can't pass verification as opposed to not providing your SS#. To me, ebay's message if I don't provide my SS# is a mixed message and confusing. They say "your payouts will be put on hold, your ability to list and sell on eBay may be restricted." They follow that with "we may deduct backup withholding from future payouts." If they stop me from selling there would be no future sales and certainly there would be no future payouts. "Restricted" generally by definition means "limited" as opposed to "prohibited". Based on the definition of "restricted" and based on the possible deductions for withholdings, my interpretation is that I would still be able to sell, perhaps more limited, and ebay would deduct withholdings from my sales, probably at the rate of 24% since that is apparently their standard. That said, everyone will probably have their own interpretation of what ebay means. So you tell me, what do you think ebay means here. Here's the information supplied by ebay:

https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html#...

How long will eBay hold my funds if I don’t pass verification?

When your information doesn’t pass verification, you have 180 days to provide us with a Form W-9 or enter your information again. If you’re not passing verification and you’ve double checked your information and found nothing wrong, you can still upload a W-9.

If your information is still not verified after 180 days, we’ll begin withholding 24% of your sales as requested by the IRS.

What happens if I don’t provide my SSN, ITIN or EIN?

Since this information is required for all sellers with sales over a certain amount, if you don’t provide us with a SSN or ITIN, your payouts will be put on hold, your ability to list and sell on eBay may be restricted, and we may deduct backup withholding from future payouts. If this information doesn’t pass verification, your selling experience may be restricted until we verify your details.

longtimealaskan · ‎02-13-2022

Are you so sure? Ebay does say in their question/answer section they withhold 24% if they can not verify the seller information. And apparently there is a way to submit payments without having an SS#.

"Backup Withholding is federal income tax on the interest payments on deposits. It is withheld by a bank when it does not have the account holder's Social Security Number. This is a specified percentage paid to the IRS on most kinds of transactions reported on variants of Form 1099. American Express National Bank is required by law to withhold and remit to the IRS 24% of interest paid to your account under certain conditions."

Ebay also states "deduct backup withholding" in their question/answer section. Are you still sure?

I'm not saying it's a safe way to go, only that it apparently can be done, probably by using name, date of birth, and address.

longtimealaskan · ‎02-13-2022

I wouldn't be surprised to find that ebay lied, but ebay does say in their question/answer section they withhold 24% if they can not verify the seller information.

And apparently there is a way to submit payments without having an SS#.

"Backup Withholding is federal income tax on the interest payments on deposits. It is withheld by a bank when it does not have the account holder's Social Security Number. This is a specified percentage paid to the IRS on most kinds of transactions reported on variants of Form 1099. American Express National Bank is required by law to withhold and remit to the IRS 24% of interest paid to your account under certain conditions."

Ebay also states "deduct backup withholding" in their question/answer section. I'm not saying it's a safe way to go, only that it apparently can be done, probably by using name, date of birth, and address.

coolections · ‎02-13-2022

The only thing you need to do at this point is either give out the SS# or stop selling. The reason for the blurb about future payouts is in the event you sell something before quitting, or before getting booted. Only you can decide if you want to stay but everything else is a moot point.

lacemaker3 · ‎02-13-2022

@longtimealaskan wrote:
I wouldn't be surprised to find that ebay lied, but ebay does say in their question/answer section they withhold 24% if they can not verify the seller information.

And apparently there is a way to submit payments without having an SS#.

"Backup Withholding is federal income tax on the interest payments on deposits. It is withheld by a bank when it does not have the account holder's Social Security Number. This is a specified percentage paid to the IRS on most kinds of transactions reported on variants of Form 1099. American Express National Bank is required by law to withhold and remit to the IRS 24% of interest paid to your account under certain conditions."

Ebay also states "deduct backup withholding" in their question/answer section. I'm not saying it's a safe way to go, only that it apparently can be done, probably by using name, date of birth, and address.

@longtimealaskan, sorry, but no, that's not exactly what they say in the FAQs.

They say that they will put your payouts on hold, and that they may restrict your ability to list and sell. It also says that they may deduct backup withholding from future payouts.

But, as we have said multiple times, there have been no reports of eBay ever withholding any amounts from sellers' payouts. There have been a lot of reports of payouts being put on hold, a few reports of restricting the sellers' ability to list or sell, but never any reports of backup withholding.

eBay says a lot of things, just to make it clear that they could do some things if they had to. That doesn't mean they normally do, or are willing to, do those things.

https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html#...

longtimealaskan · ‎02-13-2022

Thank you Lacemaker3. I searched IRS for that type of information but didn't find that. I appreciate you finding that. I will probably have to provide my SS# but I absolutely cringe at giving ebay my personal information. I would rather have all of my earnings sent to the IRS than give ebay my personal information. I have zero faith in ebay doing the right thing. It's like the new system of payouts. Under the old system I could use my Excel spreadsheet to calculate to the penny exactly what the ebay fee would be. Not so under the new system. The percentage rate varies for every item, including another sale of the same item. Under the new system I can sell the same item for the same price but the ebay fee will not necessarily be the same for each sale. Why would they be different? It automatically makes me think ebay is padding the books. I'm not talking about the few pennies difference; I'm talking about having an overall lack of faith and trust in ebay to do the right thing.

longtimealaskan · ‎02-13-2022

Good point. I wouldn't trust either one. But if that was my primary source of income I might not have a choice. Fortunately (or unfortunately, as the case may be) I don't have to worry about making that choice. I'm 78 and have been retired for 22 years. That said, I'm in the age group that is frequently targeted with scams and crooked deals. My wife and I get inundated with telephone calls and emails trying to scam us. I don't need ebay to help the scammers.

longtimealaskan · ‎02-13-2022

Thank you for your well thought out and enlightening solution. If I went and did something else I would no longer get to read your helpful comments. Besides I can spend only so much time fishing before I get bored.

espresso_warehouse · ‎02-13-2022

There's a common misconception that these new requirements are motivated primarily by generating tax income. But that's not really why this is happening.

For the most part, the government is trying to crack down on money laundering, nefarious/criminal activity and terrorism. We can argue for days about who they are targeting politically, but it's got a lot more to do with tracking enemies of the state than it does getting a few bucks out of people running garage sales.

They want to know who is shuffling money around and be able to subpoena that information with ease.

I hear you about not wanting eBay to have your SSN, though. This isn't the most secure, responsible company. In this case, give them an EIN.

https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-n...

lacemaker3 · ‎02-13-2022

eBay has been managing payments for more than 3 years, and they started with the larger selling accounts, most of whom probably received 1099-Ks and were therefore required to provide an TIN. I'm not aware of any reports of data leaks in all that time.

eBay fees can be calculated exactly, to the last penny, as long as you do the calculations correctly. I have demonstrated this many times over the last year or so. The percentage rate does not vary, when a sale is made in the same category. However, the fees are calculated on the total payment made by the buyer, including the buyer's sales tax, which of course is going to vary depending on the buyer's shipping address. As long as you take that into account, you can calculate the eBay fees with 100% accuracy.

If you don't want to use your SSN, then you could apply for an EIN and use that instead. You can cancel an EIN when you don't need it anymore. More info:

https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers