Substitute Form W-9

[terryannpiano]

I received Substitute Form W-9 requesting my tax ID, entity and certification. Also listing penalties for failure to furnish and such.  I agreed to provide only the last 4 digits of my SS# to eBay, and having been hacked before, I will not provide my info to them online or on some unofficial form.  I did call the number on the form and spoke to a human who said she was from eBay tax dept.  She said that my funds from 2022 have been put on hold and will not be released until I provide my info.  Since I did not sell $600 on eBay, I questioned this.  She said she thought I might sell more, but as this is 2023, I don't know how that would happen.  She said any new listing payments would also be placed on hold, until I provide the info they want.  I asked about the penalties, and she said that eBay would not be issuing any penalties if the form was not returned.  Professionals advise not to give out your social security number and I agree.   We've already paid the sales tax on used items.   This is not my 'job' and it's not my income.  Many of the items were sold for family or friends.  These policies are just bad, and I've read that the Substitute form W-9 is for charities, not me, not eBay.

[luckythewinner]

I received Substitute Form W-9 requesting my tax ID, entity and certification

How did you receive it, and from whom?

I will not provide my info to them online or on some unofficial form

If eBay asks for your Taxpayer ID Number and you do not provide it, you will no longer receive payouts.

Since I did not sell $600 on eBay, I questioned this

If eBay waits until after you reach the threshold and you refuse to provide it, they cannot conform to the law. You do realize that you agreed to provide it when you started using Managed Payments, right?

I asked about the penalties

The penalty is that you will not get any payouts from eBay until you do.

Professionals advise not to give out your social security number

"Professionals" also say that a business can refuse to serve you unless you do.

We've already paid the sales tax on used items

Apples and oranges. Your SSN is needed for income tax purposes, not sales tax purposes.

I've read that the Substitute form W-9 is for charities, not me, not eBay

What you read was wrong.

https://www.irs.gov/instructions/iw9#idm140098828624048

[nobody*s_perfect]

eBay isn't making up their own rules as they go along; this is a federal requirement because eBay (rather than PayPal) is the payment processor now. They have to send you (and the IRS) a form 1099-K if they process $600 or more for you in a year. They have to have your tax ID BEFORE you hit that threshold or they risk not being able to meet the legal requirement to send the form.

 https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

[wastingtime101]

If you refuse to provide this information to eBay then your funds will eventually go to your state as unclaimed property and you'll have to work with them to get it back. eBay can shut down your account and permanently restrict you from selling.

[crazystuff4sale]

Ebay is required by law to follow the tax code. They must have your SSN to report payments to the IRS. There is no getting around it. Every online marketplace must follow these regs. No one is going to make an exception for you because you don't like it.

[fashunu4eeuh]

This is not an eBay policy—in order to comply with federal law, eBay is required to collect a seller’s social security number. 

This change in e-commerce business practice comes after President Biden signed the American Rescue Plan Act of 2021 back in March of that year. This new tax reporting law is part of IRS efforts to streamline 1099 reporting and tax compliance.

[kensgiftshop]

If you're not going to provide the information they want so you can be paid, you might as well remove the listings you have up now.

[mam98031]

A W9 is an IRS form.  Not sure why you would consider it an "unofficial form".

If your account has been hacked before, then hopefully you significantly upgraded your personal security system and procedure.  The hacking was NOT Ebay's fault.

Another important note to make is that your important financial info is encrypted.  It is highly unlikely that whomever hacked you did not break the encryption code.  You can test this for yourself.  Go and view your financial information.  Not even you can see your SSN, Bank account number, etc.  And if a hacker is talented enough to get around the encryption on your account, they would likely be going after the entire site and not stop at a single account.

If you do not provide Ebay with you full SSN, EIN or TIN, you will not be able to sell on this site plain and simple.  

Holding your funds has NOTHING to do with a 1099K.  It has to do with you not giving Ebay your SSN so they can verify your identity.  Without that Ebay will not send you your money.  Not this month or the next, or the next.  

The penalty is that you can not access your money.  The professional advising you is clearly not aware of the requirements of a Money Processor like Ebay is now.

It has nothing to do with State Taxes either.

It may not  be your main income, but we are all still required to claim our side hustle monies earned.

They policies make sense, you just don't understand them at this point, so that makes it hard to agree with them.  But from reading your post, your main reason was because you have been hacked before.  Above I gave you some advice on how to better protect yourself.

I hope this all works out for you.

[mam98031]

If the two items you currently have up for sale, sale, you will likely meet the requirement for a 1099K for the 2023 year.

[terryannpiano]

Thank you very much for your advice. I appreciate it that you took the time to answer.  I have looked into it and made a decision to remove my 2023 listings.  My reasons are only partially because of the past, when a large company had many accounts, including mine, compromised.  Other reasons include eBay rates and the taxes on shipping, to mention a few.  For me, it's no longer worth it for the time and effort I put into it.  

 The 'substitute form' requesting my info is not from the IRS.  Although it does not state who is sending the form, it's requested that I return it with my ID and certification to the eBay Tax Department.  eBay has had access to my bank account and has known my identity for a long time.  I'm aware that they are not going to return my funds. There is a list of penalties on the form that have nothing to do with the return of those funds.

I'm taking a more creative approach and will still be working with antique lace and fabrics that I love.

eBay won't be involved with it.

Best of luck to you.

terryannpiano

[dbfolks166mt]

     That is of course your choice and your money to forfeit. At some point eBay will turn the held funds over to your state, hopefully it's not a lot. Stop and thing a moment about all the people and businesses that already have your SSN there are 100's of them.

1. Every bank and CC company you have an account with
2. Every doctor, hospital, dentist... you have ever visited,
3. The federal, state and local government entities, 
4. Any third party financial processor you have an account with PayPal, Venmo, Stripe........... 

     Following is some information on what the W-9 is. 

https://www.irs.gov/forms-pubs/about-form-w-9 

[mam98031]

@terryannpiano 

"Other reasons include eBay rates and the taxes on shipping, to mention a few. "

I think you may be misinformed on this one.  The BUYER pays TAXES on a purchase, not the seller.  Taxes on shipping, again paid by the Buyer, is a REQUIREMENT of some states.  Ebay has to comply with charging the buyer's sales tax by State LAWS.

"The 'substitute form' requesting my info is not from the IRS. "

Sorry, I don't know what a "substitute form" is.

"Although it does not state who is sending the form, it's requested that I return it with my ID and certification to the eBay Tax Department. "

Are you talking about the W9 form?  It is an IRS form and yes it needs to be returned to Ebay as the email instructed you to.

https://www.irs.gov/forms-pubs/about-form-w-9#:~:text=Use%20Form%20W%2D9%20to,Mortgage%20interest%20....

"eBay has had access to my bank account and has known my identity for a long time."

Ebay has to comply with some new laws.  I think you are likely over thinking this.  Having your bank info is NOT the same as confirming your identity.

  https://www.csiweb.com/how-we-help/regulatory-compliance/identity-verification-kyc-compliance/

https://www.irs.gov/irm/part4/irm_04-026-005#idm140052578029968

"I'm aware that they are not going to return my funds."

I have no idea why you would say this.  If there is money in your Managed Payments account, Ebay absolutely will process that money to you after you comply with the info they have told you they need.

"There is a list of penalties on the form that have nothing to do with the return of those funds."

That is because the W9 has nothing to do with it.  It is info IRS has asked Ebay to get from you.  

[laststopgeneralstore]

It always blows my mind how just *word I can't say* people are over the smallest things that don't matter. Don't wanna give out your SS? To bad because almost every institution in the world has it the second you get yourself a loan or credit card or even think about applying for one. You've been hacked before? Great so have I but I'm still here and still doing great. I just don't get it when people make all these excuses over nothing. It's like saying you'll never eat again because you got food poising once.

[anasazirose]

While I protect my SS# as much as possible, it's not what it used to be.  The number started as solely the number to be used by the SS administration and employers to track income and benefits.  Slowly, it has become a commodity wanted by everyone. 

Doctors want it.  I just leave it blank or when asked, tell them I don't provide it for medical, I've never been declined service.   When the SS# became mandatory to renew a DL, I tried to use the line about it being against SSA rules for other agencies to require it.  Well the DMV said no problem, don't give it to us, but you won't get a DL.  Well, I gave it because I don't have the energy to try the whole sovereign citizen thing.

When ebay required my SS# last year, I was apprehensive, but realized that there is no way for them to do the proper reporting required by the current IRS if I didn't give it to them.  If I want to sell on ebay, I give my SS#.

I understand many people don't want to provide it, but as was said above, do you realize how many people have it?  My MIL was a nanny and worked at a doctor's home.  He had files he'd brought home in paper form stacked on a table.  They got knocked over and as she was helping pick them up, she saw they all had SS#s on them.  No reason to even have them on medical forms, let alone have them taken out of the office. 

My friend works at a store.  Return forms are filled out by customers, and their name, address, and other identifying information is on the form.  The store retains them for 90 days, then throws them in the dumpster.  My friend said he saw a dumpster diver taking a lot of things out, and the box of return forms was gone. 

If you return something at a store without a receipt, a lot of them require a copy of your DL.  Best Buy, Lowes, and Walmart are 3 off the top of my head.  These stores and many others subscribe to a 'chronic returner' program.  Your DL is uploaded and held in their computer for 3 years, and the disclosures state that once it's provided, you agree that they can share the info with the company.  OFC, that's in the tiny print most people don't read.  The company, most likely in India, tracks un receipted returns.  So, you return something without a receipt at Lowe's, then 6 months later at WM, then a year later at Best Buy, when you attempt a return at Target in a few months after Christmas, your return can be declined for having too many returns without receipts, flagging you as a possible shoplifter.   Most people share that DL without a 2nd thought of where the info goes.  Most people assume it stays in house. 

My point is that ebay has a valid reason to ask for and receive your social because they regularly send you taxable money.  If you fear identity theft, get some ID theft protection and monitor your credit report (it's free and something everyone should be doing anyway).  

I read that you've already decided to remove your listings and hope you know you may be waiting years (it's 7 in PA) for ebay to send your funds to your state's  unclaimed property department.  You can check that online for free in most states, and without entering your social.

[ms.rodriguez*]

Heads up Terryannpiano, you will NOT be allowed to sell on any online platform in the USA without providing a tax ID #.  If you take paypal for payment, eventually Paypal will start hounding you for it.  This is the law in the USA.   This law was signed by Congress under the Trump administration and it started on Biden's watch. I state that because I don't want see someone either defending or bad mouthing either one.   If you are truly afraid about being hacked, get one of those credit monitoring services and check it out monthly.

For added peace of mind, get a new bank account and use it exclusively for your online payouts.  

As for professional telling you to not give the social security number, they are ill informed. This is now required by law in the USA.  Comply or you will just have to stick to flea markets and garage sales and Craigslist and only accept cash.    Ebay is going to hold your funds for a year or so and eventually, they have to send it to YOUR state government.  Then you can waste hours trying to get that money from your state and I bet you will have to give them the social security number too for that.