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2022 law change - PayPal transactions over $600 (1 Viewer)

FDLmold said:
Paypal said it did. Then they dinged just about everybody here with an email saying we crossed the threshhold of $600, and all we took were friend/family payments.
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As I read the law, it's each transaction over $600, not smaller exchanges that add up to $600.

Very few F/F transactions are over $600 - but on PCF and chip sales, that is obviously something that happens. However PP has taken note of many businesses that handle payments via F/F. The intent of the law was to catch "under the table" payments - which has been illegal for as long as the IRS has been in existence, but completely unenforceable. So if what appears to be a business is handling transactions via F/F - PP is sending notice that you haven't slipped one past the goalie.

Now that people are willing to go cashless, the IRS can get their fair share.

I still prefer cash. I'll still get it by that goalie for now.
 
If total good or services payments processed exceed $600 you will get a 1099k. It is cumulative transactions per processor, not limited to only single transactions over $600.
 
Taghkanic said:
View attachment 1040077
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To be fair, the IRS employs roughly 87,000 people. Most of them in positions like HR, IT, and other office positions. I can't get numbers on actual agents, but it would be easy to imagine that fewer than 1/3 are agents who carry guns.

The army alone has over 481,000 men and women trained with the use of fully automatic weaponry. Add to that the Navy, Air Force and the Marines...

The pentagon can pretty much say "F*ck you, who are you going to send to collect?"
 
Tonysquander said:
If total good or services payments processed exceed $600 you will get a 1099k. It is cumulative transactions per processor, not limited to only single transactions over $600.
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I believe you have made a mistake. The law section 9674 includes a De Minimis Exception which of course is a carry-over from barter law § 6045. In barter law (transactions not using currency) the Threshold was $1. Thank goodness this was actually raised to $600 (for electronic payments), but I digress.

Here's the exemption - not the stuff NewsMax or Fox are telling you, but the actual law, as written.

(e) De Minimis Exception for Third Party Settlement
Organizations.--A third party settlement organization shall not be required to report any information under subsection (a) with respect to third party network transactions of any participating payee if the amount which would otherwise be reported under subsection (a)(2) with respect to such transactions does not exceed $600.''.
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Fact is, no one knows what's going to happen until the 1099s start rolling out. The IRS is capable of anything. And like I said months ago, if I was PayPal, it might just be easier to send out massive amounts of 1099s instead of trying to tiptoe around new IRS regulations. We will see.

Personally, I receive TONS of small PayPal payments over the course of a year with my dealer button group buys, but my outgoing payments can be pretty large in small quantities. I can't wait to see what happens with these morons.
 
Poker Zombie said:
I believe you have made a mistake. The law section 9674 includes a De Minimis Exception which of course is a carry-over from barter law § 6045. In barter law (transactions not using currency) the Threshold was $1. Thank goodness this was actually raised to $600 (for electronic payments), but I digress.

Here's the exemption - not the stuff NewsMax or Fox are telling you, but the actual law, as written.
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I don’t watch Fox or Newsmax but am pretty good at reading law. You have to look at what (a)(2) of the statute this provision is modifying says which is:

(2)
the gross amount of the reportable payment transactions with respect to each such participating payee.

In other words they look at gross or aggregate amounts, not single transactions for reporting purposes. This is also in line with what recent IRS bulletins interepreting the change say.

Full provision as modified:

https://www.law.cornell.edu/uscode/text/26/6050W

So without the exception all transactions are reportable. The exception provides if the gross amount of reportable transactions is under $600, it is not.
 
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DoubleEagle said:
Always bringing your politics into your posts. Not necessary. No one cares.
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I don't care about the politics. I was referring to "news agencies". Now if you think those particular news agencies are politically biased... :whistle: :whistling:

I'm just saying, "read the law". @Tonysquander has given a Cornell link - which seems to indicate that this is already something that law students are debating in papers, so yes, there seems to be ambiguity. I gave the link to the law. No opinion pieces. Just the law from congress.gov.

Trust me, as a PCF vendor, I'd prefer to not see this. I am not in favor, but here we are.
 
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Poker Zombie said:
I don't care about the politics. I was referring to "news agencies". Now if you think those particular news agencies are politically biased... :whistle: :whistling:

I'm just saying, "read the law". @Tonysquander has given a Cornell link - which seems to indicate that this is already something that law students are debating in papers, so yes, there seems to be ambiguity. I gave the link to the law. No opinion pieces. Just the law from congress.gov.

Trust me, as a PCF vendor, I'd prefer to not see this. I am not in favor, but here we are.
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I gave a link to the language of the actual revised law via Cornell’s online resources, not a law student debate. My interpretation of the change is in line with everything I have seen on the subject ranging from IRS bulletins to news reports to accounting firm notices/blogs explaining the impact and applicability of the reporting change. Do you have a source you can share with us interpreting the law as you understand it? Thanks

TS
 
Poker Zombie said:
I believe you have made a mistake. The law section 9674 includes a De Minimis Exception which of course is a carry-over from barter law § 6045. In barter law (transactions not using currency) the Threshold was $1. Thank goodness this was actually raised to $600 (for electronic payments), but I digress.

Here's the exemption - not the stuff NewsMax or Fox are telling you, but the actual law, as written.
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More rake is better, right?!?!?!

Absolutely unfreakingbelievable. When I read your posts, I’m so often taken back to a scene from Billy Madison. You rarely cease to amaze.

As to your typical political crap you try to interject at every turn, you might want to do a better job of vetting your misinformation before you start throwing other news sources under the bus.

Lemmings…
 
Tonysquander said:
Do you have a source you can share with us interpreting the law as you understand it? Thanks
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Sorry, no I don't. Like I said, all I have is what was put forward from congress as law. No reading into it - just the law, as written.

You may very well be right. You are likely right, as you have access to IRS bulletins and accounting firm notices. I only have the letter of the law, which could be read both ways once the lawyers get to it (way to go Congress).

I cannot imagine how difficult it would be to examine every single person that has had 30 meals with friends of business colleagues over the course of a year for $20. Even more if you also consider that one person putting 5 other meals on their card and paid back via PayPal would hit that $600 even faster. Hell, I do that every 3 days (though only one pays me electronically). Fortunately, I keep records of things. Notes in the comments of every transaction like "for food" or "lunch" will go a long way to back up my records.
 
Excellent advice. Putting “notes” in the comments should remove all doubt. :rolleyes:
 
Poker Zombie said:
Sorry, no I don't. Like I said, all I have is what was put forward from congress as law. No reading into it - just the law, as written.

You may very well be right. You are likely right, as you have access to IRS bulletins and accounting firm notices. I only have the letter of the law, which could be read both ways once the lawyers get to it (way to go Congress).

I cannot imagine how difficult it would be to examine every single person that has had 30 meals with friends of business colleagues over the course of a year for $20. Even more if you also consider that one person putting 5 other meals on their card and paid back via PayPal would hit that $600 even faster. Hell, I do that every 3 days (though only one pays me electronically). Fortunately, I keep records of things. Notes in the comments of every transaction like "for food" or "lunch" will go a long way to back up my records.
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So what I'm understanding from this is us putting "dildos" as the subject might save us. @Saoliver @Sprouty @natumes ... We are geniuses....
 
Poker Zombie said:
Sorry, no I don't. Like I said, all I have is what was put forward from congress as law. No reading into it - just the law, as written.

You may very well be right. You are likely right, as you have access to IRS bulletins and accounting firm notices. I only have the letter of the law, which could be read both ways once the lawyers get to it (way to go Congress).

I cannot imagine how difficult it would be to examine every single person that has had 30 meals with friends of business colleagues over the course of a year for $20. Even more if you also consider that one person putting 5 other meals on their card and paid back via PayPal would hit that $600 even faster. Hell, I do that every 3 days (though only one pays me electronically). Fortunately, I keep records of things. Notes in the comments of every transaction like "for food" or "lunch" will go a long way to back up my records.
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By law it is only applicable to goods and services. If someone sends you an incorrect 1099k with non-goods and services totaled into it, the onus is on you to contact that company to have them correct it.
 
Tonysquander said:
By law it is only applicable to goods and services. If someone sends you an incorrect 1099k with non-goods and services totaled into it, the onus is on you to contact that company to have them correct it.
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Theres no way in hell that PP is going to ammend any of those 1099s. Its one thing to have accounting software kickout a 1099, its another completely to have actual people recieve, read, review, decide and update said 1099s
 
Silver_Fiend said:
Theres no way in hell that PP is going to ammend any of those 1099s. Its one thing to have accounting software kickout a 1099, its another completely to have actual people recieve, read, review, decide and update said 1099s
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This is my feeling as well. If pay-not-your-pal decides a f/f transaction is g&s, I’m guessing you will be stuck with it.
 
Poker Zombie said:
Wouldn't that indicate "goods and or services"?

I lot of "jokes" may very well wind up costing you taxes. If there is one thing I am sure of, the IRS does not have a very good sense of humor.
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I give @Sprouty my "goods and services", if you know what I mean.....
 
FDLmold said:
This is my feeling as well. If pay-not-your-pal decides a f/f transaction is g&s, I’m guessing you will be stuck with it.
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Remember you don't have to pay taxes on the whole amount, just profits. The challenging part is having receipts. Most chip transactions aren't profitable. The other big problem with the whole situation is no one is paying state/local taxes. If that was ever scrutinized due to an audit sellers could be in trouble.
 

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