Electronic Payment Service IRS Reporting

[Sea Dogs Beach]

Here's the laws concerning IRS reporting by electronic payment services:

Starting in 2011, Electronic payment services are required by the IRS to report the sales of goods and services for customers who, in a single year receive:

More than $20,000, AND
200 or more payments.

The new IRS 6050W changes apply to all payment providers, including PayPal. This includes payments received after January 1, 2011, with the first reports sent to the IRS in early 2012.

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[Sea Dogs Beach]

Starting in 2011, 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. These new rules apply to 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.

Here's Paypals Frequently Asked Questions page concerning these new tax rule: FAQ's Tax Rules