W-9 Tax Withholding

[tobes04]

I just received a notification from eBay today saying "We are writing to let you know that we’ve placed a block on your payouts because the Internal Revenue Service (IRS) notified us that the full legal name and/or Tax ID you provided doesn’t match their records. To clear the payout block and avoid tax withholding, it’s critical that you provide us with a Form W-9 with your legal name and Tax ID. We’ll send a letter with an exact deadline for providing your Form W-9, but you can quickly and securely resolve the issue now by filling out and submitting an electronic Form W-9 through your eBay account."

I have been using the same information for years, I am a single member LLC, when I go to try and fill out the electronic Form W-9 they provide the "tax classification" options dont give any option for Single Member LLC/Sole Proprietor, only S corp, C corp or partnership. Has anyone dealt with this and know what to do because this came out of nowhere and I'm stressing out.

[mtgraves7984]

@tobes04 

I don't know your solution, but here's a similar post that you might want to check replies on. Good luck.

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

[monroe67]

As opposed to worrying about which "tax classification" you should mark on that W-9, I think you may be better off trying to respond to the second sentence of eBay's notification to you:

"We are writing to let you know that we’ve placed a block on your payouts because the Internal Revenue Service (IRS) notified us that the full legal name and/or Tax ID you provided doesn’t match their records. To clear the payout block and avoid tax withholding, it’s critical that you provide us with a Form W-9 with your legal name and Tax ID."

Since you say you registered with eBay originally as "a single member LLC" (a business), I suggest starting by double checking the spelling of your legal business name and the Tax ID assigned to or associated with that legal business name.  Make sure that eBay's records the name and Tax ID number you fill in on the W-9 match the business's official name and the Tax ID number for that business entity.  

In the alternative, if you have registered with eBay as an individual, using your own personal Social Security number (SSN), double check that that name and number were spelled/entered into eBay's records accurately.  If your Social Security number was issued to, say, "Michael Walter Mouse", you have to enter your name as "Michael Walter Mouse," rather than what everybody knows you as:  Mickey Mouse.  

BTW, a SSN is nine digits, formatted as:  aaa-bb-cccc.  

A business tax ID number is also nine digits, often formatted as:  aa-bbbbbbb.     

Lastly, you might also need/want to schedule a short visit with a tax preparation specialist or accountant.  

Edited to add:  Does eBay's electronic Form W-9 include any instruction pages?  I ask this because, after I posted the initial response, I googled Form W-9.   The .pdf available through "irs.gov" shows a blank W-9 with four and a half pages of instructions and definitions and explanations, including What To Enter if you are an individual, "single member LLC", and other information. 

Hope this helps ??

[tobes04]

I double checked and I dont see anything that is incorrect so Im stumped as to what is wrong

[slippinjimmy]

@tobes04 

Just wondering, is 2024 the first year you received a 1099-K from eBay?

If it is it could explain why there was never an issue in previous years. Since this notice came after the issuing of 1099-K's it is likely that it was the IRS that detected a miss-match rather than detected by eBay.

As far as how to complete the W-9, just call the IRS and ask them.

[mam98031]

@tobes04 

I found myself in  your position a couple years ago.  I too could not figure out why I needed to do it.  But I filled out the form and sent it in as instructed.  Everything was fine in short order.  

Something to understand, Ebay ONLY sends out requests for a W9 when the IRS notifies them they want one.  So Ebay is just doing what the Federal Government is requiring them to do.

While it is a pain to take the time out of your busy day to do this, it is far easier to comply than get upset my it.  It is an easy form and it is HIGHLY likely everything is fine.

[rin1175llc]

Hello! I spoke with a rep from eBay last night, they said this is a known bug on the form and there's an open ticket with their IT team to attempt to fix it. It's not you

[mam98031]

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@rin1175llc wrote:

Hello! I spoke with a rep from eBay last night, they said this is a known bug on the form and there's an open ticket with their IT team to attempt to fix it. It's not you

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A bug on what form?  The W9??  Not sure what that would mean.

Seems so much easier to just submit the form, it doesn't hurt a thing and it only takes a couple minutes, if that to fill it out and send it over to Ebay as instructed in the email.  I would NOT recommend waiting for some unknown bug to get fixed.  And what if the CSR was incorrect????

[browsing-at-home]

What he means is he's a Sole Proprietor, and there should be an option to select that as a tax classification.

On the form you can only select C Corp, S Corp, or Partnership. So you can't fill out the form Correctly.

[mam98031]

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@browsing-at-home wrote:

What he means is he's a Sole Proprietor, and there should be an option to select that as a tax classification.

On the form you can only select C Corp, S Corp, or Partnership. So you can't fill out the form Correctly.

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Single member LLC is different from a Sole Proprietorship.  But that should all be fine.  This doesn't have to be a big deal at all.  The OP just needs to fill out the very short form and send it to Ebay as instructed in the Email.  No harm will come to them because of it.

I'm a Sole Proprietorship and I sent in the W9 they requested of me a year or two ago.

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

[rin1175llc]

eBay forces you to a pre-set screen that they've pre-filled, it's not an actual W9 like the one you provided, it's one specific that they're asking you to fill out and sign digitally. On that form, there's a drop down menu and there is only choices for S Corp, C Corp, and partnership. You physically cannot pick Sole Prop or submit a normal W9

[mam98031]

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@rin1175llc wrote:

eBay forces you to a pre-set screen that they've pre-filled, it's not an actual W9 like the one you provided, it's one specific that they're asking you to fill out and sign digitally. On that form, there's a drop down menu and there is only choices for S Corp, C Corp, and partnership. You physically cannot pick Sole Prop or submit a normal W9

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That is a change from when I had to do it.  When this happened to me, I got the email notification, but I also got a hard copy of the request in the mail with a W9 form.  

Let me see if we can get some clarification on what you should do for that question.

elizabeth@ebay.com
kyle@ebay.com
devon@ebay.com

[lacemaker3]

@tobes04,

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 electronic W-9.

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