Starting in the 2011 Tax Year, all credit card processors will be reuqired to issue 1099 tax forms to person who process $10,000.00 and more than 200 transcation via paypal or other credit card merchant accounts.
This new tax requirement raises several questions;
1. Will the number of sellers on Ebay decrease ?
2. How many persons will close there paypal accounts ?
3. Some companies will be receiving 1099's for more income than they generated. For example if a company does business with one company that pays them via paypal they will receive a 1099 form the company plus this amount will be included in the 1099 from Paypal.
4. But the most important question is now that paypal is considered a credit card processor under the law, how will this fact effect the numerious lawsuites that are filed every year by people caliming fraud on the part of Paypal ?
http://internetbiztaxtips.com/2008/07/paypal-and-ebay-must-report-transactions-to-the-irs/
http://online.wsj.com/article/SB121737220325394931.html.html?mod=2_1581_topbox
Tags: New Paypal IRS Requirements
