PayPal issues erroneous error IRS 1099 to personal TIN SSN not business TIN EIN

[illinoistax]

I'm the treasurer of a 501(c)(3) charity.  PayPal -- for the second year in a row -- has issued the 1099-K to the wrong erroneous SSN / TIN / EIN.  They reported it under my personal social security number rather than the TIN of the charity.   Does anyone know why this keeps happening?  Last year it took me hours on the telephone to resolve this, and over two months!  I know of another charity that this happened to as well.    Is there any way to fix this?  We are thinking of closing our account due to the hassle of trying to fix this.

[PayPal_Joy]

Hi @illinoistax,

I'm sorry to hear that you're having these issues with your 1099-K tax document. I understand how frustrating this would be. For this situation, I suggest contacting us to have a correction request submitted. To contact our Customer Support, please click on 'Contact' at the bottom of any PayPal website page to view available options. You can also reach out by sending us a private message on Facebook or a direct message on Twitter.

I hope this helps!

[illinoistax]

You haven't really answered my question.  Why does PayPal continuously issue 1099-Ks in the name of the officers of the charity rather than in the name of the charity itself?  You obviously have some kind of system problem within your tax operations team.  I am personally aware now of six different charities where PayPal made this error.  They did it last year and a senior PayPal executive told me that the problem was fixed and that it would not happen again but here we are back in exactly the same situation.  In my case you have the charity's EIN -- taht is the primary EIN on the account.  So why do you issue the 1099-K showing that the income went to my social security number, which is false?

[PayPal_Joy]

Hi @illinoistax,

Unfortunately, we are unable to access user's account through our Community, so I would be unable to look into your account to see what may be causing this issue.

It could be that PayPal was unable to report with the provided EIN. PayPal will always try with the business tax reporting information first. If we are unable to provide what is needed with the business information in the account, we will then use a SSN on file. This could be what caused the issue last year, as well.

I understand that you have reached out to our Customer Support in the past and are still facing this issue. The best way to receive assistance with this issue would be to contact Customer Support to have an agent assist you.

I hope this helps!

[illinoistax]

Okay now I'm confused. I received an email telling me that I need to send a W-9, but that doesn't make any sense because I submitted one when I opened the account several years ago and NOTHING HAS CHANGED! Do you now require a new W-9 every year? The IRS does not require that.

[Illinoistax2]

I would just warn people on here that PayPal seems incapable of differentiating between a personal and a business account.  From Day One, our account has been a business account opened with the EIN of a nonprofit 501(c)(3) corporation.  Yet EVERY YEAR PayPal sends a 1099/ 1099-K to the personal SSN of the Treasurer  (apparently required for Patriot Act reasons), and EVERY YEAR PayPal tells us that it was due to a technical problem that has been fixed, and that the problem won't recur.  (I have their emails.) But now here we are.   I've spent so much time on the phone, and resending documents (such as W-9) to PayPal that they already have, and which we sent when we opened the account.  We love PayPal and it's a great convenience to our members, but sadly, we will probably have to close the account once this is all straightened out, because we simply don't have the time to keep going hat in hand to PayPal and asking them to fix their mistakes.

[illinoistax]

UPDATE -- it's now been one month and PayPal has done NOTHING to fix this problem.  Every time I call the very nice customer service agent apologizes profusely and says they're sorry it hasn't been fixed, but they have never corrected the 1099-K and continue to issue the 1099- with my personal social security number rather than the EIN of the charity.   Last contact (the fifth time) PayPal told me I'd have it in five days.  That was two weeks ago.  I can only conclude that they simply don't care about customer service or correcting their error, which has happened EVERY YEAR.  We will be closing our account, reluctantly.  It's an inconvenience for our customers but it's just not worth the hassle and the horrible bad indifferent customer service from PayPal.

[rrm4]

I am currently going through the same issue. It has been a nightmare. Except in our situation, the treasurer that originally set up the PayPal business account is no longer employed by our company. The ex-employee reached out to us this week to inform us that they received a letter from the IRS stating that they under reported their income and now owes for it. We were super confused, because there were no 1099K's  posted for the business under the tax documents tab, nor did we receive one by mail. We ran some reports and found that the amount on the IRS letter matches the Businesses total annual amount done on PayPal. So, when we contacted customer support, they told us that there is absolutely nothing they can do, and 1099K's are final. After much, discussion about this and the severity of the issue, they agreed to submit a request for correction. Today, I received a generic email from PayPal telling me where to find the 1099k on their webpage. That's it. 

For **bleep** and giggles, We logged into our account again, and wouldn't you know.... the 1099K miraculously appears. I have yet to receive a response for our correction request.