I found the following message on one mystery shopping company's site and believe that all mystery shopping companies should adopt this policy immediately. If nothing else, they are setting themselves up for a lot of trouble if they get hacked and it is really not necessary since a majority of mystery shoppers do not exceed the $600 limit for one company.

Until now, we have required every shopper to provide their social security number during registration since we are required to report shopper income on a 1099 form if they exceed $600. That information was encrypted and all proper security measures adhered to.

Still, it seems every month or so we hear about another major company with a security breach and millions of people’s personal information obtained. As a proactive measure, SCI has decided to change our process and what we store.

Social Security numbers are no longer required during the registration process. All shoppers that registered previously will have that information deleted from our system.

From this point forward, we will only collect that information when we are required to have it for federal or state reporting requirements. Shoppers will be advised when it is required. We will only retain it on our system for as long as we need it for reporting purposes.

Our shoppers are one of our greatest resources and we want to continue to make their experience with SCI the best it can possibly be. Thank you for the many years of partnership!

The devil will be in figuring out the mechanics. At what point do they ask for your SSN? Suppose you earn $700, but they wait until 1099 time comes around in January and you won't tell them your SSN. They then have a big problem with the IRS. So, maybe in August, you have earned $550, and they say, "no more shops until you give us your SSN." Then your SSN gets stored somewhere until January. I applaud SCI for thinking about this, and will be curious to see how other MSCs react.

Edited to add this: This may drive even more MSCs to use PayPal. If an MSC sends money via PayPal, they do not have to issue a 1099 form to you regardless of how much you earn with them. And PayPal does not have to issue a 1099-K until you make $20,000 AND receive 200 or more payments. Using PayPal shifts the entire burden of security to PayPal. [www.paypal.com] As I and some others have noted before, PayPal aggregates the total amount sent to you. PayPal has no way of knowing how much of a payment is a fee, and how much is a reimbursement, so while $20,000 may seem high to you, if you have a lot of high dollar value reimbursements, you may hit the $20,000 threshold and be surprised. Of course, each of us is keeping good records and can report all fees and all reimbursements on Schedule C anyway.



Edited 1 time(s). Last edit at 09/28/2015 08:33PM by myst4au.

you know, this is heated for me. SSN is NOT SUPPOSED to be used as it is today. I have had people TRY to make a copy of my CDL, which, is not allowed. It can be LOOKED AT, BUT isn't supposed to be copied. I do not like how the government is trying to change us into a Soviet type of system. They require so many personal things, I find myself just lying a lot. I refuse to give my SSN to the driver's license info also. I find it an invasion into my privacy.. omg, google yourself and IF you're smart, you'll be totally shocked! Mine shows EVERY SINGLE residence I have ever had. So now, I also do not state my literal address, I don't give out references with phone numbers either.. I am not crazy. I am just very attuned to what is occuring in the US today.

Companies usually start requiring SSN at $600. What I've heard happens is that at $600, everything freezes until you provide the information. I have seen a couple of companies do it at $400 and maybe that is their leeway to the $600 to give folks time to respond without the headaches of freezing the account.

I applaud this MSC for taking a proactive stance as it pertains to our SSNs! I hope more companies follow suit. It is just too easy for hackers to exploit the servers housing our sensitive data.

Atta boy to this MSC!!!

I don't sign up with any company unless they accept an EIN.
Getting an EIN is free. You fill out a form and it's done lickety split. Remembering where you stashed the paperwork? Well, yeah, that is a horse of a different color.

The only expense I can see, is if you have an EIN; you will need to fill out one of the schedule C forms. That can run into money if you use a tax preparation service. They make the big bucks on the extra forms.

MA Smith,
You need a Schedule C with just a SSN, as well as with an EIN. Turbo Tax will save the fees unless you have a complex return. It will point you towards the forms you need to use.

Yes, if you are worried about giving out your SSN, you can get an EIN for free. You are obligated to pay taxes either way.

I have actually run into companies that refused my EIN. I no longer do work for them. Even having that number compromised could cause problems.

Hello everyone, this topic is a very important topic for me as I am the one requesting and receiving the W9's as well as a signed copy of our IC Agreement. I would first like to state that it is the responsibility of the Independent Contractor to claim all monies earned regardless of what the amount is. With that said, you are correct in that we do not send out a 1099 unless you have made $600 or more with our company.
Let me tell you about our company, we actually have three companies on the ISS Platform so if you complete a shop for any of the companies, your shop pay is added all together into one large sum. As you can see, tracking every shopper's payment from three different companies to see if they are getting close to the $600 amount would be nearly impossible. It's a week long process at the end of the year just to marry the companies and the shopper fees to ready them for tax purposes.
But that really doesn't matter because the bottom line is that a W9 is required from every Independent Contractor, regardless of how much they make, so that we can be in compliance with the IRS. The IRS is fighting to make all shoppers employees of each and every mystery shopping company that the shopper works for. We are fighting to keep shoppers as Independent Contractors. So the IRS is now coming down hard on all companies and have begun doing random audits not only of companies but of shoppers. And while completing those audits they request that we show proof of the W9's from each Independent Contractor. The other company states they will only hold the W9's until they are no longer needed. As far as the IRS is concerned that would be for the next 10 years.
We do understand your concerns about privacy and being compromised and take all the precautions possible to keep your information safe. We also state in our contract that it is required to be able to complete jobs for our company. So shoppers have the option not to work for us if they do not want to fill out the forms. We do accept either a SS# or an EIN but ask that you do not send both as we will automatically use the SS#.
I am not sure which company you are referring to in this thread but they are doing the MS community a huge injustice by taking this route. Please note that we have the MSPA backing us on this and I myself have attended three MSPA Webinars in the last year regarding this topic and how important it is to be in compliance with the IRS and keep this business Independent Contractor based.

On a final note, we only pay by PAYPAL and we still 1099. Just wanted to clarify that being paid by PayPal is not a 'Get Out of Paying Taxes' card.

If you have any other questions please email me directly, I would love to try and answer them or help you find the answers. Thank you.

Sincerely,
Emma A. Valdivieso
Accounting Manager
Mystery Shopper Services, BMA, Customer 1st
Phone: 805-472-4396
Toll Free: 888-300-8292 extension 1009
Email: emma@mysteryshopperservices.com
Website: www.mysteryshopperservices.com
MY Hours: 8:00am – 5:00pm (PST)

Emma -

SCI = Shoppers' Critique International You might want to contact them to see what their thinking is. Thank you so much for your detailed response.

It is my understanding that all the money you earn as a Independent Contractor is added together and if it is $600.00 or more, you need to report it. Most Mystery Shoppers work for several companies so making $600.00 in a year is easy to do.

You are incorrect. If you earn a total of $400 all mystery shopping jobs, that $400 is taxable needs to be reported on Schedule C. $600 is merely the threshold for a company to have to issue you a 1099 form. If you only earned $10, it would have to be reported as income, although if that was your total income for the year, you wold not owe any taxes.

@Julialuvsmovies wrote:

It is my understanding that all the money you earn as a Independent Contractor is added together and if it is $600.00 or more, you need to report it. Most Mystery Shoppers work for several companies so making $600.00 in a year is easy to do.

yeah, that's what I thought.

@Julialuvsmovies wrote:

It is my understanding that all the money you earn as a Independent Contractor is added together and if it is $600.00 or more, you need to report it. Most Mystery Shoppers work for several companies so making $600.00 in a year is easy to do.

True to a point. You need to report if you make $600 per year, no matter how many sources were paying you. A payer, however, is not required to send the payee a 1099 form, unless the payments added up to $600+ per year from this particular company only.

So, if you made $100 each from 7 different companies, you have to report, but they don't. If you made $600 from one and $20 each from the others, the first has to report, the others don't, but you have to report the $700. And if you were busy and made more than $600 from more than one MSC, they all report, and you report the total, including all the income under $600 per company you worked for throughout the year.

You must report your income no matter what the amount. It's still taxable even if you don't have a 1099.

@amberngriffinco wrote:

you know, this is heated for me. SSN is NOT SUPPOSED to be used as it is today. I have had people TRY to make a copy of my CDL, which, is not allowed. It can be LOOKED AT, BUT isn't supposed to be copied. I do not like how the government is trying to change us into a Soviet type of system. They require so many personal things, I find myself just lying a lot. I refuse to give my SSN to the driver's license info also. I find it an invasion into my privacy.. omg, google yourself and IF you're smart, you'll be totally shocked! Mine shows EVERY SINGLE residence I have ever had. So now, I also do not state my literal address, I don't give out references with phone numbers either.. I am not crazy. I am just very attuned to what is occuring in the US today.

If you are crazy, I'm right there with you. I use fake everything unless it's for the IRS. I don't use social media, with the exception of a YouTube channel linked to a fake name and email so I can subscribe to hoop dancing videos. My real address is linked to very little, so when I do Google myself it has me living in one of the two states I used to reside in. With a very outdated phone and email address. Privacy is a thing of the past and the only way to keep it is to lie. People may laugh and say "oh I have nothing to hide" but it's not about that. It's about privacy being a human right.

Any money you earn, not a combined amount is and always has been required to report according to IRS regs.

So let's say you earned more than $600 from company A. That company is required by federal law to issue you a 1099 by January 31st. Now let's do the scenario of you only made a few bucks from companies B through Z. They aren't required to issue a 1099. You on the other hand are required to report every single penny earned.

This is why it is extremely important that you organize and set up spreadsheets for your work. Keeping track of your business mileage and office expenses, over the top important. If you want me to help reduce how much you pay in taxes.

If you think that because we only need to keep our returns for three years and the IRS can't get you after that; you're wrong. An old boyfriend and a former client tried that beeswax and they lost. Both have worked the past decade just to pay off the fines and interest. The IRS trashed their credit rating.

This particular subject is going to come up more often in the next few months.

My advice is sit down and set up your spreadsheets. As a tax preparer I would rather have a spreadsheets for every company you work for than a shoebox filled with receipts. Actually, I'd be thrilled if any of my clients could document their mileage. Office expenses documented, well that's icing on the proverbial cake.

I only use an EIN and don't shop for companies that require a SSN. I also use a PO Box. Although I understand that one may be tempted to enter false information where the request for it seems unnecessary or intrusive, doing so is fraud and - if I'm not mistaken - fraudulent activity is illegal.