|Fri Nov 18 2011 09:57:03|
eBay Blocks Users for Not Providing Tax IDs to PayPal
By: Ina Steiner
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:
Please don't reply to this message. It was sent from an address that doesn't accept incoming email.