Etsy told sellers they must review or update their taxpayer ID and their address, or risk having their accounts frozen in January. However, some sellers are reporting Etsy is already freezing their shops during the height of the holiday shopping season.
"Starting in January 2022, shops that don't have taxpayer information on file will be frozen as they near this threshold. In order to ensure there are no disruptions to your selling experience and payouts, please update or review your taxpayer ID and address before the deadline!"
Etsy cited new tax regulations that will require it to report payments over $600 it processes on behalf of sellers beginning with tax year 2022. Currently payment-processors like Etsy and PayPal must issue IRS Form 1099-Ks for sellers for whom it processes over 200 transactions that total at least $20,000, as explained on the Etsy help pages
Tuesday's announcement stated, "Starting in January 2022, shops that don't have taxpayer information on file will be frozen as they near this threshold. In order to ensure there are no disruptions to your selling experience and payouts, please update or review your taxpayer ID and address before the deadline!"
But sellers reported Wednesday that they had received email notifications and ran into trouble updating their accounts. One thread
started off as follows:
Tax ID Led My Listings To Be Deactivated By Etsy?
"I've been on Etsy for a year now so I am still fairly new to certain things. I got the tax email and went to my shop manager and updated my EIN number but for whatever reason Etsy said it was incorrect and froze my shop so I updated my SSN. It was approved and all seemed well.
"All my listings were still there but after a couple hours I found out all my listings were deactivated by Etsy? I am aware that others are having an issue with the tax ID and their shop being put on vacation mode but I have not seen anyone else talking about all of their listings being deactivated.
"What else can I do in this situation? Do I just wait it out and hope that Etsy will respond to my email soon? Any suggestions would be greatly appreciated!"
Another seller who said it had also happened to them wrote, "This is so frustrating because my information is correct and this is the busiest month of the year. I feel really bad for everyone having these issues....especially at the highest money making season."
Compounding the problem, they were unable to access customer service. "I have no idea how to contact Etsy," the seller wrote. "It says the email is not monitored, their phone says they aren't taking calls. I emailed email@example.com and that email says it is not monitored."
Another seller said they felt they had done something wrong and were in tears. "Now all my listings are deactivated by Etsy. I have been on Etsy for 10 years without any problems until now."
One seller responded to reports of frozen accounts offered some assistance
in a thread titled, "This may help if your shop was put on pause due to tax info verification." It may help some but not all sellers.
Remarkably, not only are sellers having difficulty getting customer support, but no one from Etsy has jumped in to the threads to offer help to the distraught sellers.