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2022 law change - PayPal transactions over $600 (4 Viewers)
- Thread starter Himewad
- Start date
My biggest fear is that receiving a 1099 will open the door to looking at ALL transactions, which is going to mean looking into transactions that most of us have no memory of as we didn’t keep a detailed spreadsheet of things before a certain point. This whole thing is such a cluster f*ck.
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OP
OP
In theory, it's only supposed to be on Goods & Services transactions. At least that's what I thought.
FDLmold
Royal Flush
Yup
FDLmold
Royal Flush
That’s what PayPal said when the law passed. They lied.
OP
OP
RainmanTrail
Straight Flush
Looks like I was wrong about PayPal on this one. Pretty foolish decision on their part. And one that's probably going to cost them a lot of money. I hope someone here has shorted their stock.
It does beg the question... if PayPal's legal terms and conditions nowhere cite that they will disclose your Friends & Family transactions, then is it even lawful for the IRS to make you tell them? Do we have any legal ground to just plead the Fifth and not disclose anything? F&F payments are not tied to anything tangible so it's kind of your word against... nobody else's. Seems to me a fair answer would be "I don't remember what the payments were for, but they weren't for goods or services, as outlined by PayPay terms and conditions."
If the IRS doesn't like that response, they should make PayPal remove F&F payments so they have access to all transactions, and all transactions must be tied to some tangible thing. I don't know, maybe I'm crazy.
Any lawyers on PCF want to weigh in?
If the IRS doesn't like that response, they should make PayPal remove F&F payments so they have access to all transactions, and all transactions must be tied to some tangible thing. I don't know, maybe I'm crazy.
Any lawyers on PCF want to weigh in?
RainmanTrail
Straight Flush
I'm in a baseball chat group with a bunch of lawyers, and I remember them discussing this exact topic a while back. They said that PayPal is only required to send out 1099s for all accounts that exceed a certain threshold, but that they can (and have in the past) send them out at their discretion as well, even if an account doesn't meet the requirement thresholds.
Note, they also sometimes send them out in error and then later correct it. This has happened to me twice. It also happened to me with eBay in the past where I was sent a 1099 and then received an email saying to ignore that 1099 because it was sent out in error and that it was not sent to the IRS.
DrStrange
4 of a Kind
Tax law is tricky. You might have the right to remain silent but that doesn't mean you don't owe taxes nor are you safe from collection efforts. This is well tested law - lots of previously tried tax evasion schemes start out with " I am a religion " or " I have the right to remain silent and thus don't have to file taxes".
While you might have the right to remain silent, your records are not protected. Bank records, phone records, credit card statements, geolocation data and yes, your PayPal transactions - including friends and family payments. What do you think happens when the IRS says in court that this PCF dude had $15,500 in unexplained friends and family payments. And PCF dude sits silent. As noted, this sort of thing happens all the time. The predictable result will not be in PCF dude's favor.
If someone has income subject to taxation, they are required to report the income and pay the tax. All that PayPal is doing is flagging potential tax cheats. Just because you don't get a 1099 or W2 are you suddenly not subject to taxation. Come on, every small brininess owner is confronted with this sort of situation yearly.
If you are flipping chips using PayPal F&F, it is still taxable income, and you are evading the tax code. Maybe using F&F makes someone less likely to be caught evading taxes owed, but the offense is unlawful.
PayPal has some level of duty to report potentially criminal transactions to the proper authority. They don't need to say anything about it in their TOS. PayPal might find it in their interest to say something in the legal boilerplate - that is their choice to make.
This isn't hard. When you sell something for more than you paid for it - you potentially owe income tax on the profit. All we are quibbling about is when and how does PayPal share information about potential wrongdoing.
DrStrange
While you might have the right to remain silent, your records are not protected. Bank records, phone records, credit card statements, geolocation data and yes, your PayPal transactions - including friends and family payments. What do you think happens when the IRS says in court that this PCF dude had $15,500 in unexplained friends and family payments. And PCF dude sits silent. As noted, this sort of thing happens all the time. The predictable result will not be in PCF dude's favor.
If someone has income subject to taxation, they are required to report the income and pay the tax. All that PayPal is doing is flagging potential tax cheats. Just because you don't get a 1099 or W2 are you suddenly not subject to taxation. Come on, every small brininess owner is confronted with this sort of situation yearly.
If you are flipping chips using PayPal F&F, it is still taxable income, and you are evading the tax code. Maybe using F&F makes someone less likely to be caught evading taxes owed, but the offense is unlawful.
PayPal has some level of duty to report potentially criminal transactions to the proper authority. They don't need to say anything about it in their TOS. PayPal might find it in their interest to say something in the legal boilerplate - that is their choice to make.
This isn't hard. When you sell something for more than you paid for it - you potentially owe income tax on the profit. All we are quibbling about is when and how does PayPal share information about potential wrongdoing.
DrStrange
CrazyEddie
Full House
The 1099 that you receive from PayPal does not report income. It reports payments. It's up to you to appropriately characterize those payments on your tax return, and to identify what portion of those payments (if any) represents income that might be subject to taxation.
PayPal is not the authoritative source on whether or not you owe taxes on the payments they're reporting. You are. PayPal doesn't know, doesn't care, and doesn't want to know or care. They're legally required to report the payments and so they're reporting them. YOU are legally required to determine whether or not those payments are subject to taxes and, if so, to pay them.
I don't care about paying taxes, the F&F income would be < 2% of my taxable income; I'm more irritated at the fact that we all have to spend an exorbitant amount of time researching our PCF private messages to remember "what was it I sold those chips for?"
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CrazyEddie
Full House
I agree that the compliance burden of this sort of nuisance taxation is completely out of proportion to the revenue raised. The previous reporting limits created a de facto exemption for small amounts, and the new reporting limits are enacting a de facto new tax on a huge proportion of the population, one where compliance costs are a greater concern to these new taxpayers than the actual tax itself. My position is that the previous de facto exemption should be enacted as an explicit exemption. Nobody who isn't generating at least a partial living income on this sort of activity should have to think twice about dealing with the paperwork for it.
Poker Zombie
Royal Flush
First, according to PayPal's TOS:
"Unless the merchant has been approved by PayPal, account holders may not use PayPal to send or receive payments for any form of gambling activities, including but not limited to payments for wagers, gambling debts, and gambling winnings, whether conducted online, in person, or through any other means of communication."
So, no you haven't been using PP for poker.
Second, Anything you make playing poker is taxable. Fortunately for me, I'm a terrible poker player and I can write off my losses to the amount of my winnings. So if paying what you owe is an issue for you, play worse.
Yes, I agree that this sucks for the middle income earner. Multi-millionaires get tax hidey-holes, and the little guy gets bupkis.
As most of you know Mrs Zombie is listed as a PCF vendor. We bought a $15,000 embroidery machine to make shirts, hats, and beer koozies for meet-ups. She also uses it for baby blankets and a whole host of other small projects. We make very little profit (estimated 30 years to pay off the machine). This is clearly a hobby, and we are happy if we make enough to cover the cost of being a PCF vendor (which is why I am not also listed as a vendor). This law means we need to keep records of everything that transpires through PayPal - and all digital payments. Thankfully, @Himewad started this thread January 6th. That gave us ample time to open a spreadsheet and record everything that we pay for and collect via PP over the year which we did. We didn't stick our head in the sand. We didn't whine about how the taxman or PayPal was screwing us. We just opened a simple spreadsheet.
If you are wearing a parachute and you are shoved out of a plane, you can pull the rip-cord, or you can fold your arms bitch about being shoved until you hit the ground.
Death and taxes are always assured.
CrazyEddie
Full House
On the downside, more recordkeeping and paperwork.
On the upside, another spreadsheet!
I disagree...
It doesn't beg the question; it raises the question
then is it even lawful for the IRS to make you tell them? - You would be surprised at the power and influence the IRS has on our society, I'm sure the IRS would make the case it isn't unlawful to force you to declare it.
If you are growing marijuana without a tax stamp, and get busted, one of the charges that can be levied is tax evasion, and you will get a fine at minimum. However, you can walk into the IRS, explain you have plants and pay your taxes. Talk about (il)logical, this is as close to double jeopardy as possible imo.
The IRS writes the test, takes the test, and grades it - full stop.
ekricket
Royal Flush
Funding for people is different than actually hiring people.
Allocated funds don’t always end up where they are allocated, especially when years have passed and they are “unable to find candidates”.
HaRDHouSeiNC
Straight Flush
- Joined
- Nov 8, 2014
- Messages
- 8,475
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not sure if those are GS rate jobs but that's a job for life with benefits essentially and retirement.
If you know the GS system and need a job, that's an easy one if you like to be a professional useless person for the IRS
FDLmold
Royal Flush
I will become one of those new IRS agents and I will volunteer to “audit” any return that mentions poker chip sales. *wink nudge* I take bribes.
Ben8257
Royal Flush
Wrote this beautiful piece this morning... thought it was in "bad taste" so I didn't post... but y'all went there! Full derailment engaged! Lol
There is one member here that damn near since the day I joined PCF I have sent paper checks for payment! There are other ways folks!
But I have been meaning to make a trip up to Boston to see a few fellow chippers if anyone wants to get together and push more Tea in the Harbor! Lol
Taxes stink... but somehow we have to pay for 87,000 new Gov employees and their "company issued enforcement tools" let's reduce that inflation baby!! But next time we throw a party can we skip old decrepit James Taylor singing songs of suicide and heroine addiction (for the record I love JT but that was just sad....), with all these new audit officers we should be able to spring for Miley Cyrus or Melissa Ethridge, heck even a collaboration of both would be interesting!
There is one member here that damn near since the day I joined PCF I have sent paper checks for payment! There are other ways folks!
But I have been meaning to make a trip up to Boston to see a few fellow chippers if anyone wants to get together and push more Tea in the Harbor! Lol
Taxes stink... but somehow we have to pay for 87,000 new Gov employees and their "company issued enforcement tools" let's reduce that inflation baby!! But next time we throw a party can we skip old decrepit James Taylor singing songs of suicide and heroine addiction (for the record I love JT but that was just sad....), with all these new audit officers we should be able to spring for Miley Cyrus or Melissa Ethridge, heck even a collaboration of both would be interesting!
Now that the story has died down, the $2500 fine is back.
https://www.paypal.com/us/webapps/mpp/ua/useragreement-full#actions
https://www.paypal.com/us/webapps/mpp/ua/useragreement-full#actions
I don't see anything about misinformation?
Poker Zombie
Royal Flush
Correct.
This link: https://www.paypal.com/us/webapps/mpp/ua/useragreement-full#restricted-activities covers all the things that could get you fined.
So don't violate the law. Check.
The rest is basically "dont be a dick" that costs us money...
Don't use PP to sell copyright protected works, counterfeit works, or, well... basically anything where PayPal has to investigate, and finds you have done something so wrong that PP has to refund the buyer.
Don't double-dip. i.e. If you get a refund from PayPal, you do not get to also get a refund from your credit card company for the same purchase, or get to request cash back from the seller through other channels.
Don't use PayPal to make a "purchase" from a buddy using your credit card, then get the refund, thus tricking the bank into giving you a cash advance.
People that were all worked up about being fined for spreading misinformation can return to setting their own pants on fire.
FDLmold
Royal Flush
"You acknowledge and agree that $2,500.00 U.S. dollars per violation of the Acceptable Use Policy"
"the promotion of hate, violence, racial or other forms of intolerance that is discriminatory"
Still there. Check. Though not as explicit as before. I doubt there is an enforceable law anywhere (at least in this country) that includes the word intolerance, but now Paypal will have one. Nothing to worry about, though, I'm sure Paypal elites will be fair, balanced, and judicious about applying their intolerance standards to both the right and the left, and they should be trusted thoroughly. Probably as much as they should be trusted with "Friends and Family transactions will not be reported to the IRS".
"the promotion of hate, violence, racial or other forms of intolerance that is discriminatory"
Still there. Check. Though not as explicit as before. I doubt there is an enforceable law anywhere (at least in this country) that includes the word intolerance, but now Paypal will have one. Nothing to worry about, though, I'm sure Paypal elites will be fair, balanced, and judicious about applying their intolerance standards to both the right and the left, and they should be trusted thoroughly. Probably as much as they should be trusted with "Friends and Family transactions will not be reported to the IRS".
Poker Zombie
Royal Flush
I have greater concerns of being hit on the head by a meteorite than I do of being fined by PayPal for "the promotion of hate, violence, racial or other forms of intolerance that is discriminatory".
...and it's not even close.
If your life is such that "the promotion of hate, violence, racial or other forms of intolerance that is discriminatory" is so important to you that you may need to stop using PayPal, I can assure you that we are neither Friends nor family.
...and it's not even close.
If your life is such that "the promotion of hate, violence, racial or other forms of intolerance that is discriminatory" is so important to you that you may need to stop using PayPal, I can assure you that we are neither Friends nor family.
OP
OP
I think it’s more that he doesn’t want a 3rd party making those judgement calls about anything he says, tweets or posts. There are tons of examples of perfectly innocent things that are taken completely out of context (or outright misquoted) where people take offense or are outraged. People need to toughen up and not be such a delicate little flower instead of attacking someone whose intentions were not meant to offend anyone.
I think the answer is: if you don't like the way a company does business, don't do business with the company.
I've hated PP for years, and at this point I pretty much only use them for chip sales and purchases. If more PCFers would use alternate options, I'd close my account in a heartbeat.
I've hated PP for years, and at this point I pretty much only use them for chip sales and purchases. If more PCFers would use alternate options, I'd close my account in a heartbeat.
Poker Zombie
Royal Flush
Agree that there are some words that we routinely used as children that are now considered offensive today. However, we already submit to a "3rd party judgement" policy on PCF. If you get banned from PCF, that $2500 fine will be chump change, because of all the money you'll end up saving because of missed ChipRoom sales!
Some people do need to toughen up, but some old geezers need to bend or be broken. We were pretty harsh as children. Any disability could be used as a joke, and often it was downright hilarious. But PayPal isn't your buddies basement or a comedy club. There's a time and a place for everything. The time for promoting violence for the purpose of being discriminatory ended in the 1960s.
...and that was far too long.
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