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Paypal / IRS = trouble

Discussion in 'Business & Tax Advice' started by BrianSipe, Feb 8, 2012.

  1. BrianSipe

    BrianSipe Newbie

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    im sure a lot of people are posting about this.
    ive read some threads.
    'my friend' is in the boat.

    paypal doesnt have a social...
    they send the forms to irs.
    how will irs handle forms with no social.

    (no preaching please, there are circumstances here about his situation id rather not explain)

    they emailed him and said he was coming up on this new threshold and to supply his social. he immediately stopped using the account and went to close it down. guess what. they wouldnt let him. THEN come to find out he had already passed the threshold BEFORE they emailed him to warn him.
    but they dont have any ssn or anything. however they said they mailed forms to both him and irs.
    if it was a fake name/address im sure he wouldnt worry but that is not the case.

    there are severe issues boarding, sooo... any options?

    **ANY ADVICE GIVEN WILL NOT BE TAKEN AS ATTORNEY ADVICE
    OR LEGAL ADVICE** Just thoughts.
     
  2. volund

    volund Senior Member

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    If he does not want to use his SS# tell him to get a EIN and use that. Paypal takes those as well and you can get them online in no time.

    If he is just trying to get out of the taxes all together then he should have been paying more attention to what was going on. Paypal put out what the limits were going to be sometime either late last year or at the beginning of this year.

    My guess is that if Paypal sends in the form without a SS or EIN # it will be kicked out to have a live person look at it. This makes it more likely for them to track him down for an audit as it will look like he is trying to get out of paying his taxes.
     
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  3. BrianSipe

    BrianSipe Newbie

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    as i stated, there are reasons and it goes much deeper than what is on the surface.

    and as far as their guidelines they put out...lol
    just wait until its your turn.

    those guidelines are typical PP B.S.
    as i stated before, they claim this and that and then do what they want.
    read around the net and you will MANY people getting screwed
    by ACTUALLY following the guidelines.
    they say BOTH criteria have to be hit the 200 and the 20k.
    thats a lie. they are turning over people with 50 and 10k
    or single big transactions, etc.
    there would be no problem IF they DID what they SAID they were going to do
     
  4. Manji69

    Manji69 Newbie

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    Well http://www.blackhatworld.com/blackhat-seo/members/90325-volund.html was just trying to help you out. He actually gave some good advice. No need to snap.

    And how can anyone help you when you ask such a vague question. Your question is pretty much - My friend is about to be audited, what can he do?

    I think you got the best advice you can get without telling us more info. Have him do what he can to make things look legit as possible so some computer does not kick his form out to an auditor.
     
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  5. volund

    volund Senior Member

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    I am way over the guidelines and knew I would be just by looking at last years numbers. The thing is however is I claimed that income last year even without the 1099 so getting one this year does not change anything for me at all.

    Technically you have to claim all your income whether Paypal sends in a 1099 or not so the only people who it really matters to is the ones that were planning on skipping out on their taxes.

    The numbers Paypal is handing to the IRS is only half the story. That is not the number you are taxed on, you get taxed on your profit not how much cash you brought in. Keep track of your expenses and act like a real business and you will find there are a huge number of legal deductions you can take and everyone of them lowers your tax bill.
     
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  6. BrianSipe

    BrianSipe Newbie

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    thanks,
    fyi, i wasnt snapping on anything but PP and their shady ways
     
  7. classifiedcaptain

    classifiedcaptain Regular Member

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    Not the response you want to hear but it sounds like your friend needs to get his shit together and stop f'in with the tax man!
     
  8. 420friendly

    420friendly Jr. VIP Jr. VIP Premium Member

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    2 things in life are 100% sure for an American...

    1. Death
    2. Taxes

    You can't fool either one ;)
     
  9. volund

    volund Senior Member

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    Really though it is not Paypal that is pushing this, creating, sending out, and dealing with all the 1099 crap is not something they really are dying to do. The push comes from the IRS, they look at all the money flowing through Paypal and know damn well a large chunk of those people are not paying their taxes on that money.

    The Feds want the money they think is due to them and you will be seeing more and more of this as time goes by with them trying to plug any and all holes that people can use to not claim income.
     
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  10. jstover77

    jstover77 Executive VIP Jr. VIP Premium Member

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    I don't like Paypal as much as the other guy, but how is requiring a SS# shady? They are a financial institution.
     
  11. TNphoneman

    TNphoneman Senior Member

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    There are some good lessons in this for all that are starting.

    1. The trigger is $20,000 OR 200 transactions in a year. Not both.
    2. If you are an individual, you can not deduct business expenses. That is a fact that has been there for a while.
     
  12. volund

    volund Senior Member

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    As long as you fill out a schedule C you can file as a sole proprietorship. You do not need to form a LLC, Corp or any other kind of official business.

    The only thing the IRS cares about is that you document everything and that your "intent" is to make money. You are not required to make a profit but you must be trying to make one.
     
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  13. benston10

    benston10 Newbie

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    how much money do you have to be bringing in on paypal for the IRS to take a sniff at your case?
     
  14. MiLiTARYiV

    MiLiTARYiV Senior Member

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    Under the new legislation, we'll report to the IRS the total payment volume received by US account holders whose payments exceed both of these levels in a calendar year:

    • $20,000 USD in gross payment volume from sales of goods or services in a single year
    • 200 payments for goods or services in the same year
     
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  15. BrianSipe

    BrianSipe Newbie

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    thanks militaryiv. as usual, thread is filled with people not reading.

    PAYPAL IS SHADY BECAUSE THEY LAY OUT RULES FOR USERS AND THEN WE ABIDE BY THEM AND THEN THE FUKERS IGNORE THEIR OWN RULES AND DO WHAT THEY WANT.
    SO TO MAKE IT SIMPLE FOR YOU, PEOPLE GET FUKED BY FOLLOWING THE RULES THAT WERE GIVEN TO THEM

    ....lol... and as so is life.... haha