As I said, the information comes from PayPal. If you wish to argue, argue with PayPal.
PayPal cites Internal Revenue Code (IRC) Section 6050W
"Internal Revenue Code (IRC) Section 6050W states that all US payment processors, including PayPal, are required by the Internal Revenue Service (IRS) to provide information to the IRS about certain customers who receive payments for the sale of goods or services through PayPal.
PayPal is required to report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments in a calendar year.In order to help you understand these changes, we have prepared the following FAQs."
This change went into effect for Tax Year 2010. Maybe Section 6050W postdates your tenure as a tax professional. I don't know. All I know is that PayPal follows the policy shown on their own webpage. I really doubt that PayPal is broadcasting the fact that they are violating the tax code. Here is a direct link to an IRS explanation of Section 6050W. [
www.irs.gov] This is actually a request for comments, but provides a good explanation. Another explanation can be found on the Thompson and Reuters Tax and Accounting Blog: [
tax.thomsonreuters.com]
The MSCs who pay through PayPal appear to fulfill the requirements of being "Aggregated payees" as explained on the Cornell University Law School website: [
www.law.cornell.edu] I can assure you that there are some MSCs which do not issue 1099 forms, and have not for several years since they remit payments via PayPal. Others have reported on this Forum that some MSCs which remit via PayPal continue to issue 1099 forms.
I personally do not worry when an MSC which remits through PayPal does not send me a 1099 form. I keep track of every penny in an Excel spreadsheet. I report every penny that I receive, and I deduct every penny that I can.
@MA Smith wrote:
@myst4au wrote:
If they pay you by PayPal, they will not send you a 1099 even if you make more than $600. PayPal will send you a 1099 if the following is met: "PayPal is required to report gross payments received for sellers who receive over $20,000 in gross payment volume AND over 200 separate payments in a calendar year." [
www.paypal.com]
I do not understand where this information is coming from, it's grossly inaccurate . .
Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008