1099-K from PayPal (tax form)

PayPal just stomped a very large sale over the holidays because it was "over my recent sales pricing." Guess they forgot the 5 figure sales per transaction - reported the income -  done with Japan and Eastern Europe for 10 years. Never had an unhappy customer. Now they want me to prove who I am and a lot more. Guess I am being ’disappeared.’ Flame off.

I think PayPal is under the gun because of cryptocurrency transactions as well as the $5k money laundering limit. I think ETSY, etc. has something to do with it - craft hobby and artisan businesses - who reports that stuff? I’ve met couples who have been making a great living making ’artisan’ items for decades and have never declared a dime in income.

My advice is to get a good accountant. You’ll get back more than his/her fee.

The only time I was ever audited was when I did my taxes with Intuit. If the ’accountant’ you find uses it, run.

PS
Does anyone know of a good alternative to PP?

As a CPA part of my job with the large companies I worked for was to be the liaison to the IRS when the IRS audited us. In fact, most large companies such as mine had established permanent office space in our building for the IRS as each tax year is normally subject to IRS audit.

It has been my experience that the IRS is a very reasonable group of people. In fact most I met are really great people, audiophiles, hunters, our neighbors In more years than I will mention I never met one out to screw anyone. If you can verify that the numbers you have put on your tax return are correct, they will accept it. In fact, an IRS agent that can be shown to be acting incorrectly will most often be disciplined and likely terminated.

Bottom line, if you can show in the event of an audit that the amount of taxable income you have on your tax return is correct, you will prevail.

Now I am only talking about us hobbyist selling our personal audit gear, the problem is the 1099K is only showing the IRS how much money you sold your items for. But the IRS only wants you to pay tax on any profit, the excess of sales price less selling expenses over your cost. The BIG PROBLEM I would have in this case is finding the invoices showing what I paid for the equipment to prove I did not make a profit on it. I don’t think I could for a lot if not most of my older gear.

@jetter   You’ve really got to be kidding. 

I have to agree with Jetter. Never had an issue dealing with anyone from the IRS. If you are nice to them and honest, you get the same treatment back. I am sure there are bad apples, power can do that, but not my experience yet.

    As a California resident nothing surprises me regarding tax collection. Try buying cigars online. I canceled a recent transaction before completion . There was a 8.75 % state sales tax added for Ca and a $.99 cent State Of California Franchise Tax registration fee . Upon further research , my purchase was to be reported so I could then file ( at my expense ) and pay an additional 56.8 % tax on my purchase . So every $100 incurred a total of 65% state tax . I also had an in law that earns $330 K a year salary receive a letter from the state that said based on his income he owed an estimated amount to California for undetermined miscellaneous internet purchases . The funny thing is , he doesn’t shop on line at all . I no longer buy cigars in America and my online purchases go to my cabin in Oregon . Good luck with the IRS . Having a friend that is employed as one of their collectors , my opinion is that they are looking for the truth and an honest person is believed . Cheers, Mike .