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AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Fri Nov 18 2011 09:57:03

eBay Blocks Users for Not Providing Tax IDs to PayPal

By: Ina Steiner
Sponsored Link
Some users are reporting they are unable to sell on eBay because they have not provided PayPal with their Tax ID numbers. EcommerceBytes has reported extensively on a new law that requires payment processors to issue 1099K reports to the IRS beginning this tax year.

Despite the fact that small sellers are clearly exempt from the law, payment processors, including PayPal and Amazon.com, have been requiring small sellers to provide their tax ID numbers.

Reports are now coming in from sellers that say they have been blocked from selling on eBay because they have not provided their Tax ID numbers to PayPal, and question whether it's legal for eBay to block them.

"This should come from Paypal NOT eBay," one seller wrote. "eBay is a forum to sell, NOT the payment processor. What if we want to use Moneybooker and NOT PayPal anymore?"

eBay does not require all sellers to accept PayPal, though it does require new users or users with very low feedback to accept PayPal. Sellers report they have little recourse in fighting the way payment processors are implementing the "1099K" law.

But eBay may be overreaching not only in blocking small sellers who don't fall under PayPal's requirements. One reader told me he doesn't sell on eBay - he only buys - but said he received a note from eBay that he would be blocked from the site if he failed to provide his social security number to PayPal.

eBay could find itself banning buyers from its site in its zeal to help PayPal comply with the new law.

Here's the text of the email received by one eBay seller:

eBay has removed your active listings and blocked your account until you've provided your tax ID number to PayPal. Federal law now requires you to supply a tax ID number to processors of online payment transactions. 

Once you've added your tax ID number to your PayPal account, please allow 24 to 48 hours for the block on your eBay account to be removed. You'll then be able to relist your items and continue selling on eBay.

For more information about providing your tax ID number, go to:  http://www.paypal.com/irs

To learn how to relist your items, go to:
http://pages.ebay.com/help/sell/relist.html

Thanks,
eBay
Please don't reply to this message. It was sent from an address that doesn't accept incoming email.



Comments (37) | Permalink
Readers Comments

eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: Moonwishes
       Web Site
Fri Nov 18 10:47:04 2011
>>You'll then be able to relist your items and continue selling on eBay.<<

Obviously ebay is hard up for a cash infusion, since of course sellers having to relist everything will also have to re-pay listing fees. Who would even want to sell on ebay after this anyhow?

Blocking buyers and sellers on ebay due to something that PP should be dealing with is nuts, but ebay seems to think it has to have its finger in everybodies pie.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: :)
       
Fri Nov 18 10:51:01 2011
Yet another reason why I'm so happy I left ebay and stopped accepting paypal in all of my web shops.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
This user has validated their user name. by: Tula
       
Fri Nov 18 11:07:23 2011
Are they going to refund the listing fees for the cancelled listings? Seems a bit fishy if they don't...
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
This user has validated their user name. by: Ric
       
Fri Nov 18 11:09:04 2011
eBay's hypocrisy is not surprising.

If you call PayPal because shipping is being forced over to eBay  you are told we are separate companies and that you have to speak to eBay abou8t that

Call eBay and you are told there is nothing we can do about it so just get used to it.

Yet when it suits them, eBay will act as the enforcer as to PayPal and tax policy by preventing small sellers from listing items for sale because they have an issue with conformity to a PayPal policy.

Also when it suits them PayPal will act as eBay's enforcer with heavy handed tactics such as freezing and  holding payments to sellers over some perceived potential violation of eBay policy.

John Donahoe knows the many insidious changes he has mandated will not set well with sellers, and will not resonate with buyers either. The many cases of do as I say, not as I do are making John Donahoe's prediction that eBay will have a so-so Holiday Season seem to be more of a self fulfilling prophecy than a cause and effect of conditions outside eBay.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: JB
       
Fri Nov 18 11:10:37 2011
This is just my opinion, and I could very well be mistaken but....

These companies as big as they are realize they cannot fight the government on the tax issue. Amazon realized they can't beat them so why not join them first.

PayeBayPal comes in second. If you want to sell on their site you will have to provide a TID# or SS#. Both will probably become processors and make money off the new law.

All the more reason to become unique and  build your own site.

http://www.knoxnews.com/news/2011/nov/06/amazon-offering-to-be
-internet-tax-collector/?print=1
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
This user has validated their user name. by: Anonymous Annie
       
Fri Nov 18 12:15:46 2011
Setting aside the issue about who and when tax ID numbers need to be provided... THE FACT THAT EBAY **DELETES** LISTINGS IS JUST A SH1++Y THING TO DO!!

''eBay has removed your active listings'' ... ''You'll then be able to relist your items''

Couldn't the listings just be ''hidden'' instead? Of course they could!

This is just punitive, excessive, authoritarian, Draconian... and lazy programming.

Idiots.

eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: Red Ink Diary This user has validated their user name.
       Web Site
Fri Nov 18 13:09:34 2011
In 2008 when eBay made clear what their ongoing program was to be many small sellers voted with their feet and left.

It was and has been tough, but those of us willing to learn and work at it have not only survived but attained success elsewhere.

There are alternatives. No, they aren't eBay but for me the positives outweigh the negatives.

Many sellers toughed it out, that was a choice they made. eBay is becoming untenable and sellers coping with the realization they need to move are 3-1/2 years behind in the transition and learning process.

No sympathy. You chose this path and you get to deal with the policy changes right before the holiday season, the glitches which always benefit eBay and the controls which prevent you from running your business the way you want to.

I have to go pick pack and ship my day's sales on Bonanza now, sold using Amazon Payments on a site which has real people in customer service who understand that my success is their success.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: anyone out there
       
Fri Nov 18 13:12:22 2011
Hard to feel sorry for anyone as this has been coming for months.

YOU WERE WARNED MONTHS AGO.

You decided to stand on your principles and now you complain that you are being harassed.

So funny.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: Annonymous
       
Fri Nov 18 13:27:01 2011
I have been paying taxes for all of my sales since I began selling online (2002); right along with my local sales every year at tax time and also reporting my sales tax as I should. However, by eBay and PayPal expecting you to provide the info to them and now possibly considering withholding taxes from our sales really is upsetting! Ordinarily a business doesn't need to provide this information unless you are doing business with them in the same State since those are the sales that I pay sales tax for. NOT for other states! Of course if I am purchasing wholesale from a manufacturer for my business then I would owe tax for those goods etc. How will eBay be able to tell if that's what you are doing? How will they discern what should be taxable and shouldn't... Some sales/purchases are personal and non business? Some for Use Tax and some not...And some are drop ship accounts and therefore a person does not make as much from the sale due to the % that the drop shipper gets from the sale... I am the one that calculates how much sales tax etc is owed from my sales because I know what is for what etc. NOT eBay or Paypal. This is ridiculous and there's a good chance I would end up having to pay in more than I really need to. Plus knowing eBay and PayPal chances are I would also be charged a fee for their so called mandated service of withholding tax since they don't do anything for free. The fact that I have a Tax ID means my state is already aware that I have a business and that I have income because I pay taxes every year. I don't need eBay or PayPal to do anything for me because my state's already doing it. There has to be another agenda because this just does not make sense. It is one thing to want someone's tax ID number, it's another to force withholdings when they don't have all the details. All they have is how many sales you made and their fee info they provide you, that's it. Nothing related to purchases for your business etc... I think this is going to royally make things complicated, more work for me come tax time... Is eBay going to pay me for the time it is going to take to sort everything out once their numbers do not jive with mine? I don't know how much more I can take of eBay this is beyond what they should have a right to do legally. My state already has a handle on it and that's all I need. I don't need eBay interfering with my real business responsibilities. If eBay wants proof that a person's paying their tax etc then fine, give them proof you have a tax ID number so they know you have legally filed within your state and leave it for their state to do their job. eBay needs to stop trying to run everyone's business and lives, where do you draw the line...
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: 992972
       
Fri Nov 18 13:35:40 2011
People should block ebay and paypal until they bring their bazillions back from offshore and pay taxes on them.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
This user has validated their user name. by: Philip Cohen
       Web Site
Fri Nov 18 13:45:37 2011
Far be it for me to ever be supportive of either the evil eBafia or the clunky PreyPal but they have a statutory requirement to implement the “1099K law”. And they require your details so that they can carry out that requirement if and or when you qualify. If you don’t now qualify, how do they know whether or not you may quality sometime during the statutory period? They don’t, and that is undoubtedly why all these venue entities who are required to implement this law are requiring (all?) sellers to supply the required information now rather than having to chase individual sellers the day before the venue is required to furnish the returns. … It seems to me that, for once, there is logic in the action. Nevertheless, you have to remember that anything that eBay does is designed primarily to benefit eBay, not you.

eBay has removed listings? Well, don’t forget that eBay is undoubtedly the most arrogant, ignorant, unscrupulous, indeed criminal, commercial entity on the planet, so what else would you expect from them. They want your details; why don’t you simply supply same?

Regardless, don’t forget Ming’s Law: eBay lies, always has, always will.

Enron / eBay / PayPal / Donahoe: Dead Men Walking.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: annonymous
       
Fri Nov 18 14:21:48 2011
By providing eBay with your Tax ID number eBay can look you up in the state you are in so they know that you really have filed with your state; that you are a real business and either plan to or already pay taxes. That's all the proof they need. I leave the tax laws up to my CPA not eBay. I keep my records of income etc in case of a tax audit for my protection. If eBay wants to report income from a seller on eBay then we sellers will need to do what we always do, make sure you have good records and accurate figures when you pay your taxes; incase you get an audit due to eBays reporting, and eBay's possibly reporting a wrong figure of your sales. That's the best we sellers can do. So, honest sellers pay their taxes every year and keep good records. But if eBay begins withholding then all I can say is they better know what sales to withold from cause I do not want to be paying in more than needs to be paid.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: bighorsecoins
       
Fri Nov 18 15:14:06 2011
To Red Ink Diary, Keep drinking that bonanza koolaid. The site owner don't care about you. They are just getting the site ready to sell it to Ebay.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: Moonwishes
       Web Site
Fri Nov 18 16:55:21 2011
Anonymous >>However, by eBay and PayPal expecting you to provide the info to them and now possibly considering withholding taxes from our sales really is upsetting!<<

This issue has nothing to do with ebay or PP withholding money. It is all part of a reporting income to the IRS, but in no way does this give PP (ebay isn't actually involved I believe) the right to withhold any money. The fact that ebay is deleting listings until sellers fill out this info is most likely illegal if someone cared to take them to court over the issue. Thankfully I no longer have dealings with ebay.
Go Ecrater!
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: annonymous
       
Fri Nov 18 17:09:33 2011
Hi, I included it in this issue because they are considering also withholding tax from sellers. One step more than just requiring sellers have a tax ID.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: summer in the city
       
Fri Nov 18 17:36:40 2011
annonymous said:      

''Hi, I included it in this issue because they are considering also withholding tax from sellers. One step more than just requiring sellers have a tax ID.''

This could be coming no matter which party wins the next presidential election: Obama is beholden to Donahoe for a million bucks in fundraising, and Romney/Meg/Donahoe are all ex-Bain cronies.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
This user has validated their user name. by: Ming the Merciless
       
Fri Nov 18 18:37:18 2011
Among the multitude of other well documented but underreported unpleasant facts about ebafia is its highly authoritarian, bullying korporate kulture where the stick always reigns over the carrot and the carrots are rotten anyway.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: Loyal Partner
       
Fri Nov 18 19:15:20 2011
We are sorry that your store does not comply with the new Tax ID laws.

Your store will be on Vacation until you supply PayPal with either a Tax ID number or SS #.

We are sorry for this hold on your account. Your Vacation will end once you comply with the requirements. Once you comply you will be able to reopen your store.

There is no need to punish a Seller for some thing that could be handled in a more professional way. We are happy this store owner didn't have a few thousand listings. The selling season would be over before they could re-list all their items. Why does eBay always want to hurt the sellers for no good reason.
eBay is the kind of partner that every business owner wants to have.
eBay need to help Top Management the way they help their sellers.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
by: Donkey
       
Fri Nov 18 19:52:32 2011
I have been posting my social security number and street address in my ebay auctions since the beginning of the year just to be safe with paypal.
eBay Blocks Users for Not Providing Tax IDs to PayPal   eBay Blocks Users for Not Providing Tax IDs to PayPal
This user has validated their user name. by: Philip Cohen
       Web Site
Fri Nov 18 20:12:01 2011
Why would anyone publicly advertise their social security number? You want to become the victim of an identity theft? Such information should be kept private or at least supplied only someone that is statutorily required to know it or someone that you know can be trusted ... Oops, that would exclude both eBay and PreyPal …

Enron / eBay / PayPal / Donahoe: Dead Men Walking.
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