eBay Cops to Glitch over California Tax Form

eBay has told some sellers to disregard IRS 1099-K forms it generated due to a “recent technical issue”. On Wednesday, we wrote about sellers in California who were puzzled because eBay issued them 1099-Ks when they were below the reporting threshold ($20,000 in sales and at least 200 transactions in 2021).

On Friday, eBay notified some California sellers to disregard IRS 1099-K forms provided to them.

A reader forwarded the following message he received from eBay:

“Due to a recent technical problem, a Form 1099-K was provided to you in error. Please disregard the incorrect Form 1099-K. The incorrect Form 1099-K was not sent to the IRS or California Franchise Tax Board.

“We are working to resolve the issue and make sure it doesn’t happen again. Unless you had more than $20,000 in gross sales and 200 transactions in 2021, we will not submit a Form 1099-K to the IRS or the California Franchise Tax Board.

“We sincerely apologize for the error and any inconvenience it may have caused.

“As always, thank you for selling on eBay and being part of the eBay community.

“The eBay Sales Team”

Low-volume sellers have been worrying all week about why eBay generated a 1099-K for their accounts, like this thread on Tuesday.

Sellers also discussed today’s notification on eBay’s message boards. One seller said the issue affecting sellers in California wasn’t the only problem: “eBay is blundering everywhere and not even acknowledging the issues. The 2021 1099-K rollout was a disaster on many levels,” they wrote.

A warning from the Internal Revenue Service this week indicates just how dire consequences problems like eBay’s can have. The IRS has warned taxpayers not to file their return prematurely: “Individuals who file before they receive all of the proper tax filing documents risk making an error that could cause processing delays.”

“Typically,” the agency continued, “year-end forms start arriving in the mail — or are available online — in January. Taxpayers should review them carefully. If any of the information displayed is inaccurate or not available, taxpayers should contact the payer immediately for a correction or to ensure they have their current mailing or email address.

Ina Steiner

Ina Steiner
Ina Steiner is the co-founder and editor of EcommerceBytes and has been reporting on e-commerce since 1999. She is a widely cited authority on marketplace selling and is the author of “Turn eBay Data Into Dollars” ( McGraw-Hill 2006). His blog was featured in the book “Blogging Heroes” (Wiley 2008). Follow her on Twitter at @ecommercebytes and send topical tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

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