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Wed Apr 13 2016 21:22:32

Sellers Blame PayPal for Tax Problems

By: Ina Steiner

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Sellers have been experiencing problems downloading transaction histories from PayPal for over a month, and some say it's causing headaches as they work on their income tax returns, which are due for US sellers on Monday.

The problem was reported on Ecommerce EKG today:

"For at least the past several weeks many PayPal users have been unable to download their transaction histories. It appears the problem started some time in February with delays and eventually it simply stopped working at all. This is a big issue for anyone trying to download 2015 transactions in order to timely file income tax returns."

Sellers began reporting the problem on the PayPal forums as early as April 9th. In a 5-page thread titled, "Long Delays in Downloading History," a seller explained

"We have been using the Download History facility everyday for our daily transaction report. In the past week it has started taking far too long to process. Previously it took under 5 minutes, now it is taking several hours and sometimes much longer. Sometimes it times out over 24 hours and cancels the request. This is becoming very frustrating as we update our accounting records daily. Does anyone have any experience and or advice?"

On Wednesday, a UK seller posted, "They've been working on it since I first called them at the end of Feb..... Useless if you ask me."

Another wrote, "I have been trying for 2 weeks to get my 2015 transaction records for tax filing this week," and said they feared they would have to file an extension to delay filing their federal income tax to the government.




Comments (18) | Permalink

Readers Comments

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: Moonwishes This user has validated their user name.
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Thu Apr 14 00:16:05 2016

Am I missing something here? Why aren't these people tracking their sales as they make them? I would never think to go back to PP at the end of the year to see my transaction history as I take care of that per PP invoice.  

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

This user has validated their user name. by: cfrphoto

Thu Apr 14 01:01:34 2016

After opening a case with PayPal about some issues with downloaded transactions, the PayPal rep wrote the following: "Hi

As mentioned before, downloaded transaction are not 100% accurate since it is timely basis. The best option to compare your trnasaction and account balance by using settlement reports.

As for Quicken, it is a third-party app and we don't provide support to them anymore. You can use PayPal settlement report and compare with your monthly sales report or financial summary report for ensure the balance calculated correctly.

Thanks

Sincerely,
Ikhsan Saufi
Merchant Technical Support
PayPal"

The problem is that while orders and payments are automatically posted to the SixBit eCommerce solution database, there are always a few non-eBay transactions. It used to be possible to balance the account in Quicken. Now, that is no longer possible.

Downloaded transaction logs were bulk loaded into a SQL Server database and extracted into a summary database. There does not seem to be a published set of rules for determining which entries affect the balance and which do not. While it is possible to more or less balance the account, there is no way to know for sure that PayPal isn't skimming small amounts of money from the account.

Also, the roll up of payments received does not appear exactly match the amount reported in the 1099 form filed with the US Internal Revenue Service.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: sellerchick This user has validated their user name.

Thu Apr 14 01:15:32 2016

QuickBooks is your friend.  

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

This user has validated their user name. by: Marie

Thu Apr 14 02:45:28 2016

@moonwishes

It is for a reconciliation.  The dollar value that PP reports to IRS is a total amount of money incoming to the account from customers.  So if you were charged a fee for receiving the money, it is part of the 1099 sent to IRS.

PP does not reduce the figures by any refund you issued.  So the PP transaction history you can balance what you need to balance in regards to sales.  

Also from the transaction reports you can get the amount you paid PP in fees for any given period, carrier costs and a few other things.  So the reports are very helpful for many sellers.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

This user has validated their user name. by: Rexford

Thu Apr 14 07:18:56 2016

We had the same issue with downloads.  We spoke to many CSRs and Supervisors and as usual, they were clueless and could not get it fixed. We finally were able to download it by doing it in small increments and merging the results into one file.

The downloads, when they work, and they have worked brilliantly up until this past year (we call it the JD reverse midas touch since he's there now) make doing ones' expenses much easier. It also gives you the ability to cross check with your own tracking.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: Bidonmine This user has validated their user name.

Thu Apr 14 08:46:21 2016

I download my full-year Data from Paypal by January 10th. You should never wait.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: Moonwishes This user has validated their user name.
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Thu Apr 14 09:35:52 2016

>>It is for a reconciliation.  The dollar value that PP reports to IRS is a total amount of money incoming to the account from customers.  So if you were charged a fee for receiving the money, it is part of the 1099 sent to IRS.

PP does not reduce the figures by any refund you issued.  So the PP transaction history you can balance what you need to balance in regards to sales.  

Also from the transaction reports you can get the amount you paid PP in fees for any given period, carrier costs and a few other things.  So the reports are very helpful for many sellers.<<

I understand WHAT you may be using it for, but what I don't understand is why you aren't tracking these numbers on a daily basis? I have to go to PP anyhow to get the official address to ship to, so I grab the fee amount while I'm at it. Perhaps it is because I rarely do refunds, that I'm not too concerned if I might miss the occassional .30 fee, although I don't think I do.

On a sales by sale basis, I track cost, fees, shipping, money received, etc. It takes me all of about 5-10 minutes to check my figures and run printed reports at tax time. I want to know all my fees on a daily/monthly basis. How else am I to know how well (or not) my sales are doing?

I know people back track at tax time for things like their fees, but I never understood why not as they went, but then I used to know a seller that sold on line but kept her books in a notebook with pencil/pen instead of on the computer.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: JohnGermaine This user has validated their user name.

Thu Apr 14 09:47:39 2016

I print the email they send me for each transaction. I use them to do a monthly spread sheet - on old fashioned paper. I have never had a problem. Trusting someone to provide for you is never wise and I am glad I decided to do it ''old school''. I print out my fees report at the end of each month too. Yah, I know, it's a ''waste'' of paper. Well, I have the figures I needed and my taxes have been done for a long time.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: toyman This user has validated their user name.

Thu Apr 14 11:43:00 2016

As Marie said, you need to get your PayPal history to square the 1099 amount from PayPal.
You, or your accountant, will need the info, because (as we DEFINITELY found out last year) the IRS DEFINITELY uses that income number as the basis for your return.

If you haven't shown the returns, refunds, fees, etc., that need to be subtracted from that 1099 number, then you WILL get an inquiry from an IRS agent asking about the difference.

Just a word from the now wiser seller. Nothing worse than a letter with IRS in the return address spot.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

This user has validated their user name. by: Marie

Thu Apr 14 13:23:16 2016

@moonwishes

I don't think anyone said they weren't tracking these numbers in their own books.  What I said was it was a way to reconcile and confirm your numbers.  While this may not be a normal thing for you to do, it is a pretty normal thing for many.  

If you were in a IRS audit.  The simple fact of you stating your numbers are correct is not enough.  You need to prove it.  Simply saying it is so does not mean it is.  The reports are a good tool to make sure things are in balance.

If this is something you choose not to do, then that is your choice to make.  Because others want to do this doesn't make them wrong.  It only means they take a different approach than you do.

I do as you do when I verify that whatever payment I received is actually in PP.  I note the fees at that time and enter them into my database I maintain for my books.  And I'm pretty darn good at keeping clean records.  But as careful as I am, I've been known to make mistakes, which is why having something to reconcile to is beneficial and a darn good practice.  Checks and balances are key parts of keeping good books.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: TMoore This user has validated their user name.
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Thu Apr 14 14:45:34 2016

I always copy the information for any receipt onto my Excel spreadsheet, including the fee, as soon as I receive a notification. There is no need for me to go back and "reconcile" 1099 data. My totals always match with whatever PayPal says. The problem, the way I see it, is with your bookkeeping. If you don't update your data in a timely (or daily) basis, it's your own fault if you are caught in a download loop. Don't ignore your record keeping. Get a Barron's book on accounting, and you will see it is not that hard.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

This user has validated their user name. by: Marie

Thu Apr 14 14:53:31 2016

Just because someone does not keep their books the way you do does not make them wrong.  It may only mean they do it differently.  Not everyone uses an Excel worksheet to track sales.  Some have too many sales to realistically do that.  Some have built or use a database to track their businesses.  Some manually enter into those databases others may have a service they use to drop info into.  There are many ways to accomplish the same task and it may depend on the size of seller as to what works best for them.

If your sales information matches exactly to a PP 1099, then you have not issued a single refund for anything all year, so you are lucky, the same does not hold true for others.  The 1099 doesn't offer you the ability to reconcile your fees or shipping amounts either.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

This user has validated their user name. by: thehosst

Fri Apr 15 00:32:12 2016

Some "Expert" at Paypal mixed our account numbers and sent them the IRS for thousands of dollars, cost us a year and thousands to fix for of course, not even an apology.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: RCL This user has validated their user name.

Sat Apr 16 14:34:35 2016

It's a serious data integrity issue because they converted their data when they changed fields. Now, under shipping address of buyers, I have MY street address for every buyer. Under item description, I have hundreds that are the correct text description, and hundreds more that are the item number (which should be in the next column). They used to make clear what the fields were. Now, they have transaction types named ''Payment Processed'' and ''Payment Completed''. Huh? Because I buy from and sell to many of the same people, it was a nightmare finding my purchases. I know that anyone who has relied on data from Pay Pal in the past, to export into another program or just to normalize and manipulate in our own spreadsheets, had serious problems this year. Add to that, we used to be able to download a year's worth of data--ALL our Pay Pal transactions. Now, you can only download one month at a time and must concatenate the files! They were NONRESPONSIVE in email and on the phone. I was frantic until I ''cracked'' the code and tossed out the bad data. It was HELL. Ebay bucks are now under ''Redemption''...don't forget that income :)

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

This user has validated their user name. by: Marie

Sun Apr 17 13:05:48 2016

@RCL

I dropped my years worth of details into Excel in early January and I didn't have any of the issues you are talking about happening now.  I was able to get all 12 months in one download as well.

What you describe is a nightmare and a whole lot of work to filter through.  Obviously not enough time left for them to get this fixed and still leave people enough time to get their taxes done that are due today.

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

This user has validated their user name. by: FEEbay

Mon Apr 18 08:17:38 2016

Paypal and Amazon reported more income to the IRS than we reported in 2013, and guess what?? Pay up or hire someone to amend the return..
Never mind that cost basis, and other costs of doing business do not come into account on this... We had to pay them, and are forced to amend the return later...
If Paypal is going to report to the IRS, they need to have their sh*t together...ya think??

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: val2525 This user has validated their user name.

Mon Apr 18 16:05:51 2016

@moonwishes - some of us download the data to accounting programs or excel, for tax return prep.  Being able to download by a set time frame (quarterly, annual, etc) is a handy feature.  Has nothing to do with reconciling individual sales.  

Sellers Blame PayPal for Tax Problems   Sellers Blame PayPal for Tax Problems

by: 27tcle This user has validated their user name.

Mon Jul 25 12:41:31 2016

All I can say on the subject is the 1099 i got was WAY, WAY off from what the truth was. IRS sent a match letter, followed by a nastygram, and after a few letter correspondences I went in for a tax audit. Surprisingly, the auditor wasn't a dick. Turns out the 1099 was padded by 9,900.99 each month. After a bit of discussion with the guy i found out this happened to other people too. Moral- keep copies of everything as you go to CYA. But I mean seriously, PAYPAL WTF?



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