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eBay Cops to Glitch over California Tax Form

eBay Cops to Glitch over California Tax Form

eBay told some sellers to disregard the IRS 1099-K forms it had generated because of a “recent technical issue.” On Wednesday, we wrote about sellers in California who were puzzled because eBay issued them 1099-Ks despite being below the reporting threshold ($20,000 in sales and at least 200 transactions in 2021).

On Friday, eBay notified some California sellers to disregard IRS Form 1099-Ks that had been provided to them.

A reader forwarded the following message they received from eBay:

“A recent technical issue resulted in a 1099-K form being incorrectly provided to you. Please disregard the incorrect 1099-K form. The incorrect 1099-K form was not sent to the IRS or California Franchise Tax Board.

“We’re working to resolve the issue and ensure that it will not happen again. Unless you had more than $20,000 in gross sales and 200 transactions in 2021, we will not submit a 1099-K form to the IRS or the California Franchise Tax Board.

“We sincerely apologize for the error and any inconvenience this may have caused.

“As always, thanks for selling on eBay, and for being part of the eBay community.

“The eBay Selling Team”

Low-volume sellers had been concerned all week about why eBay had generated a 1099-K for their accounts, such as this thread on Tuesday.

Sellers also discussed today’s notification on the eBay discussion boards. One seller said the glitch impacting sellers in California wasn’t the only issue: “eBay is blundering all over the place and not even acknowledging the issues. The 2021 1099-K rollout has been a disaster on multiple levels,” they wrote.

A warning from the Internal Revenue Service this week points to how glitches like eBay’s can have dire consequences. The IRS warned taxpayers not to file prematurely: “People who file before they receive all the proper tax reporting documents risk making a mistake that may lead to processing delays.”

“Typically,” the agency continued, “year-end forms start arriving by mail – or are available online – in January. Taxpayers should review them carefully. If any of the information shown is inaccurate or not available, taxpayers should contact the payer right away for a correction or to ensure they have their current mailing or email address.”

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

6 thoughts on “eBay Cops to Glitch over California Tax Form”

  1. I do not know why they waiting to like, 3 AM on Jan. 31st, to issue my 1099. I could go out and pull my entire years records in early January and see what I made and what my expenses were with ebay. Yet they took 31 days to issue my 1099 and even then it was not till late that night after I had gone to bed on the 31st.

  2. CA isn’t the only mistake, they issued a 1099 for 2020 and 2021 to my friend in Missouri, supposedly working on it even after it was pointed out by his CPA its wrong

  3. Then why is Etsy’s threshold 10,000 ?
    We don’t want arbitrary nonsense going on.
    I will NEVER again rely on Etsy…..for anything.
    This article should kick off an audit of Etsy.

  4. It’s not just in CA–I’m in MO–and I got one even though I’m below the 20K — not a lot below but below

    1. Make sure you call in and let ebay know, my CPA can not find any laws changing the MO threshold, I’ve been going back and forth with ebay for over a week and they still can confirm. One agent says its a mistake and another one sent me a MO tax hand book PDF out lining requirements for employer to give an employee a 1099k, not online sales.

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