People who use eBay are being asked by the popular bidding company for their Social Security numbers ahead of a recent adjustment to an Internal Revenue Service rule.
The change made by the IRS involves reporting any cash payments worth $600 or higher that recipients paid or received through third-party organizations when filing taxes. Ahead of this rule change, online retailers such as eBay are asking users and sellers for sensitive information, according to the Hill.
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The old rule from the IRS, which is still being applied for 2022 taxes, required taxpayers to report any transactions of at least $20,000 made or received through third-party organizations or if 200 or more transactions through these organizations were made in a year. The updated rule was originally going to be implemented this year but was pushed back until the next tax year in order to give both taxpayers and online retailers time to adjust to the change.
Originally, 1099-K forms were meant to be issued to taxpayers to report these online transactions when filing taxes this year. Despite the delay, however, the IRS claims some taxpayers may receive 1099-K forms this year “in error.”
“Some individuals may receive a Form 1099-K for the sale of personal items or in situations where they received a Form 1099-K in error (i.e. for transactions between friends and family, or expense sharing),” the agency said in a statement.
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Though the next tax year is a ways off, a spokesperson for the 1099-K Fairness Coalition claimed that "it is reasonable" for companies to ask for users' taxpayer identification numbers and their Social Security numbers this far in advance due to the fact that it can take months for users to share these numbers and to implement them into the system for the 2023 tax year.
“The real problem is that the IRS has not provided much guidance to help the platform companies regarding when and what information they need to collect and report, and to taxpayers to understand what platform companies are required to report,” the spokesperson said.