Common US IRS Tax Questions 1099-K, B-Notice, and FATCA
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. Form 1099-K and B-Notice are tax forms which are applicable to holders of accounts both within and outside the United States since it pertains to income reporting for US persons/entities.
FATCA affects account holders that are outside the United States, and it requires PayPal to collect tax documents or certifications from account holders stating whether they are US persons. This includes, but is not limited to, business entities, and some individuals that open accounts outside the United States.
Tax Form 1099-K Tips:
- If you feel there is a discrepancy in your tax Form 1099-K, please review your reconciliation report and provide us with the transaction ID(s) in question and the justification for why the transaction is being disputed. Click Contact at the bottom of any page to call or email us.
- How does PayPal report my sales to the IRS? Will I receive a 1099 tax statement?
- How do I find my 1099 tax statement in my PayPal account?
- How do I download my transaction history?
- How do I change the name on my PayPal Business account?
- How do I view or edit my account information?
- What is a U.S. person for FATCA and 1099-K tax reporting purposes?
- If there are any discrepancies with your tax identification number and legal name that was used by PayPal for tax Form 1099-K reporting filing with the IRS, you may receive an IRS B-Notice
- The B-Notice mailing will provide you with all of the additional information we need from you.
- If you received a 1st B-Notice (which happens the first year that the IRS identifies a mismatch in tax identification number/legal name), log in to your PayPal account and follow the Alert Notification to provide the requested information. You may need to download and fill out the IRS tax Form W-9 for PayPal to review.
- If you received a 2nd B-Notice (which happens the second consecutive year that the IRS identifies a mismatch in tax identification number/legal name), you must provide either a copy of your Social Security Card (individuals or sole proprietors) or US IRS tax Letter 147C (entities). Log in to your PayPal account, and go to the Resolution Center to upload the document.
- The IRS does not have an online solution for requesting a tax Letter 147 C; the IRS will mail or fax the letter to you. To contact the IRS for a Letter 147C, you should call the IRS's Business and Specialty Tax line at 1-800-829-4933 between 7am and 7pm, local time, Monday through Friday. Requesting a faxed copy may be the quickest manner to get a copy of the tax Letter 147C. You can also view our tax information page for more information.
- Fully complete and sign the relevant form and upload it by logging into your PayPal account and following the Notification prompt.
- Why did I receive an IRS B-Notice?
- Only impactful for account holders outside of the United States.
- PayPal must collect documentation such as certification of non-US status and either a tax Form W-9 for US persons or entities that are subject to US tax, or a tax Form W8BEN/W8BEN-E for non-US persons or entities that are not subject to US tax withholding and reporting.
- Most business users who need to provide the requested information will be able to do so by logging into their PayPal account and following the notification prompts.
- What does FATCA require PayPal to report?
- What is FATCA?
- Who is impacted by FATCA?
- What FATCA documentation does PayPal collect and how do I provide it?
- What happens if I don't provide the FATCA information PayPal requests?
- What should I do if my account is limited because I didn't provide the requested FATCA information?
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