That is so awful. And, it's exactly what happened to me. Paypal insists they have no way to change a transaction code once the money has been sent. I never heard of the "refuse payment" option, but I called Paypal within 15 minutes of receiving the payment, since I noticed the PP fee removed from my money. As I indicated above, they did eventually release the fee to me so I could pay rent and, given the three-year track record of these same payments twice a month, it was obviously just an error on my roommate's part. That said, PP therefore knows this payment was not goods/services, but refuses to update the 1099K and refuses to re-code the transaction. PP, it is YOUR system, of course you can re-code transactions. Obviously, you would need strict guidelines on when that could occur, or what level of employee could do that, but obviously you CAN do it. The idea that they have knowingly reported incorrect information to the IRS and refuse to correct it is mind-boggling.
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