PayPal Wants Tax ID Number

But if you are selling something and making a profit, you do have a business and should be reporting your income even without anyone issuing you a 1099, right? You can apply for one as a sole proprietor, but depending on how you answer the questions (do you have employees, what is your business entity structure etc), the IRS may or may not expect you to file a separate business tax return.

They are becoming more and more strict with the tax reporting and 1099-Misc requirements. It's just a way for them to try and track down more people who they can collect taxes from.

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Sometimes money costs too much.

Side info..... starting in 2012 you must have a Tax I.D. number to claim farm use when buying items at the feed store or hardware store.

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Alice
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"No great thing is created suddenly." ~Epictitus

NO WAY would I give out this info because of an email!!!! They had better have it in writing by snail mail and they had better know my full name and business name. We have a tax professional take care of the forms we need. Anyone who gives out this info without being 100% sure its legit is crazy.

I have been running a business 12 years. Originally I filed as a business under my social security number. I am sole proprietor.
Once I hired employees is when I needed the tax ID number.
You can file schedule C [business] on taxes with out a fed ID number.
Personally I would not do a Fed ID number unless you have to.
If you don't want to give Pay Pal your SS # then my guess is you would need to close the account.
This is NOT pay pal mandating this but the IRS.
I also had to update other info [not Pay Pal] for my credit card transactions due to the new reporting starting in 2012.

The IRS knows they are loosing a lot of tax revenue with online sales and they are putting a stop to it. It was bound to happen.
Personally I report my income so it is not a huge issue. If you are doing what you are suppose to as reporting income it really is not a big deal.
Also if it is under 200 transactions a year or $20,000.00 the reporting is not going to happen.

UGH.

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I'm running so far behind I thought I was first!

http://hickahala.blogspot.com/

I just went to the PayPal website - (NOT by clicking a link) and I don't see anything about that.
They have a "Contact us" link on their site -- use it and ask.

If is is legit than like ebay, its time to find a different way to buy/sell. I would NEVER give out my SS number online even to paypal -- too many horror stories about poor security.

You need to log into your account to see the request.

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"Never stop questioning - curiosity has its own reason for existence." Albert Einstein

"I used to be a terror, now I am a tired man" Jim Croce

I've been told in the eBay Stealth forum that PayPal asks for that info sometimes just to verify the account. It may be legit. I would go by the link info in the message.

The worst that can happen if you don't respond is the account might be temporary suspended, which can be corrected quickly by providing the info they request.

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