Paypal holding my funds for a goods and service receipt - Need advice on how to deal with PayPal for 24% IRS Backup Withholding

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madcap_magician said:
OP got screwed by the American Rescue Plan Act of 2021, not by PayPal, which is just complying with their legal requirements.

OP unable to fix getting screwed because he is unwilling to provide his SSN, which PayPal needs in order to issue tax documents they are now required to create because of the ARPA. I assume PayPal still requires this even though the effective date of this policy change was delayed (initially would have applied to 2022 taxes but now applies to 2023 taxes unless delayed again or repealed) since they have no way of knowing if it will be repealed or if they're just going to need to issue next year after all.

Since he was screwed and is unwilling to do what is necessary to get un-screwed... guess he just stays screwed.
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That about sums it up.
 
p64imp said:
not possible? They already do this with friends and family payments...
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I didn't say it wasn't possible, I asked why they would do it. G&S payments are undoubtedly the bulk of PayPal's transactions. I imagine that the highest-volume PayPal users are small businesses and side gigs that probably have lots of transactions and that they wouldn't appreciate having to manually approve every single one of them. And if they did, then PayPal would be a less attractive payment processing service, and they'd go elsewhere with their business.
 
p64imp said:
Yeah I'm screwed... They told me there's nothing i can do, my money is on hold till November, and to boot they are going to deduct $229 from my money to send to the IRS w/o any actual supporting documentation so I can't declare this in my 2023 taxes either as its sent "john doe" status...

They said I gave them my consent to this when i put my email address in to PayPal - my written acceptance of all their terms of service that allows them to do this. =(
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This is absolutely maddening, reading this unbelievably negative experience you're having to deal with.....
I don't mean to insult your intelligence, but have you tried calling, & going up the chain of command with customer service? Just maybe you'll have some luck finding someone a little more sympathetic to your plight. I used PayPal for over 18 years and they were always wonderful (I always picked up a phone and had excellent interpersonal relations with all the reps I dealt with), and 100% of the time, they always had my back & resolved the case in my favor. I do realize that these new tax laws supersede any of this, and it's all probably a moot point from here on out, but it's probably still worth a try.
p64imp said:
Exactly the type of headache I'm working to avoid lol

I have a great disrespect for PayPal and how they treat their customers. I do not want them to "own me" like that as today is a reminder of how much they treat you like trash if an issue happens.

I'll just have to own this loss and move on with the knowledge.

Hopefully this thread at least educated even one other person to avoid this issue. If so, the cost of the lesson learned is a bit more stomachable.

Been communicating with the buyer, and he's being super cool about things, so that's a plus.
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I think you've definitely helped a lot of member's here. Now, nobody will ever be using PP G&S ever again, and I wouldn't blame them at this point.

At least there's a silver lining in all of this, with this "super cool" buyer, if there's any consolation.
stonesell said:
Your thread is definitely educational in helping others to avoid the hellish 24% PayPay withholding trap.
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This!
Crag the Brewer said:
And using USPO money orders is Very easy.

I was leery at first, but it's not bad at all.
Everyone should be considering that, at least.......
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I think it was around my 2nd or 3 year here on BF's, I bought an Emerson Hawk from Boru (this was way back when he was a unassuming introverted Pirate LOL) & he would only accept USPSMO. I've both sent/received several more USPSMO's since then with no issues at all. I've also gone the personal check route with 5 stellar member's here just in past year alone, without incident. I'd personally much prefer going the personal check route in lieu us using PayPal, Zelle or any of these other of these Cash APP funding sources. Do your due diligence (PICK UP A PHONE) and know with whom exactly you're dealing with, trust your intuition, and everything should work out fine.
 
If you don’t give them your personal info to verify their anti-fraud activities, they’re just going to take their cut at the point of the transaction. They aren’t going to play games.
 
King of the Cheese said:
PayPal, like any financial organization, needs the personal information so they can send their tax forms to the IRS. All banks do it.. PayPal is a bank. You can’t open an investment account, etc without sending in the info. Just send the info, unlock your funds, and deal with the taxes when tax season comes. There isn’t anything sketchy about this.
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PP is Not a bank.
 
King of the Cheese said:
It’s not an “opinion”. Who are you going to call if someone hacks you and steals all your bitcoin? Walk me through that sometime.
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Really not trying not to hijack P64IMP's thread ... but, sure, I'll walk you through that right now

It’s called escrow.

One of the systems that have made Bitcoin payments secure for customers and merchants is what is known as Bitcoin escrow, a kind of security filter for parties who use it so that they avoid falling into online scams.
An escrow is a tool that acts as a link between two or more parties for a payment, in this case in Bitcoin, allowing them to block or freeze funds until the conditions of the sale are met and both parties are satisfied.
Suppose, for example, that a person wants to buy a good or service from an online seller, and that they accept Bitcoin.
The amount in BTC sent to buy a product will be blocked until the seller provides the goods to the buyer and the buyer is satisfied.
This is a great method, especially if buying a service online, for example from a freelancer or if the seller or buyer is someone unknown.
They may fail to finish the job, do it poorly or not send any products. In this way, the escrow provides an extra guarantee.
Using an escrow, which can also be called an escrow deposit, the buyer does not send the bitcoin directly to the seller, but to an escrow address, allowing the seller to check it, but keeping the funds blocked until the buyer is satisfied.
This is obviously just one of the uses of this system. In case of disputes, the system provides an arbitrator who will decide whether to refund the buyer or proceed with the payment to the seller.

This escrow system with Bitcoin is actually the same mechanism that is found when using PayPal. Nothing new has been invented, simply the escrow has been applied in the crypto world as well.

cheers
Paypal is not our Pal


OP,
I hope this issue is resolved in your favor. Best of luck to you!
 
L.A. Saiga said:
Really not trying not to hijack P64IMP's thread ... but, sure, I'll walk you through that right now

It’s called escrow.

One of the systems that have made Bitcoin payments secure for customers and merchants is what is known as Bitcoin escrow, a kind of security filter for parties who use it so that they avoid falling into online scams.
An escrow is a tool that acts as a link between two or more parties for a payment, in this case in Bitcoin, allowing them to block or freeze funds until the conditions of the sale are met and both parties are satisfied.
Suppose, for example, that a person wants to buy a good or service from an online seller, and that they accept Bitcoin.
The amount in BTC sent to buy a product will be blocked until the seller provides the goods to the buyer and the buyer is satisfied.
This is a great method, especially if buying a service online, for example from a freelancer or if the seller or buyer is someone unknown.
They may fail to finish the job, do it poorly or not send any products. In this way, the escrow provides an extra guarantee.
Using an escrow, which can also be called an escrow deposit, the buyer does not send the bitcoin directly to the seller, but to an escrow address, allowing the seller to check it, but keeping the funds blocked until the buyer is satisfied.
This is obviously just one of the uses of this system. In case of disputes, the system provides an arbitrator who will decide whether to refund the buyer or proceed with the payment to the seller.

This escrow system with Bitcoin is actually the same mechanism that is found when using PayPal. Nothing new has been invented, simply the escrow has been applied in the crypto world as well.

cheers
Paypal is not our Pal


OP,
I hope this issue is resolved in your favor. Best of luck to you!
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Always love hearing the sales pitches for Bitcoin. Always making imaginary money sound like a positive investment.
 
King of the Cheese said:
Always love hearing the sales pitches for Bitcoin. Always making imaginary money sound like a positive investment.
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Sales pitch? lol okay...
My reply to you above is in regards to buying/selling a knife using BTC online, safely. I never mentioned investing in bitcoin. 🥴

Enjoy your paypal!
 
p64imp said:
I think you missed the part where I had him send payment to my wife's account to clear this. I don't want Paypal to have my ssc. That's all this is about.
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You’re worried about your ssn when Paypal taps your bank account?

I stopped using PP years ago after they froze my account over ID and would not accept my state-issued business certificate as proof. F***ers locked my account, took six months to get my money out.
 
L.A. Saiga said:
Sales pitch? lol okay...
My reply to you above is in regards to buying/selling a knife using BTC online, safely. I never mentioned investing in bitcoin. 🥴
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Sorry, but I trust fraud departments of the IRS and FBI more so with investigating theft than I do some finance firm managing the “wallet” for bitcoin. Guess you didn’t learn anything from Bankman-Fried.
L.A. Saiga said:
Enjoy your paypal!
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I will.

Now back on topic please.
 
Kettleman said:
That about sums it up.
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I respectfully disagree. The OP got DP screwed by BOTH the "American Rescue Plan Act of 2021", & equally, by PayPal as well.
L.A. Saiga said:
PayPal is not our Pal
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This is not me being political, just refreshing everyone's memory here, of what PayPal attempted to do, when they unilaterally changed their TERMS OF SERVICE Agreement; it was only AFTER they played their hand and faced the huge backlash, AND LOST, that they played their BS "it was only an error." BS excuse.

I can remember being on a gun forum when PayPal played their hand and there was a big backlash and subsequent exodus because of this (me included). This was just a microcosm of what PayPal faced Globally for their actions, and was the reason why, they went into damage control to try and repair the damage before things even got further out of control (even greater $$$$$$ losses/business).

Make no mistake about it, PayPal is not your Pal! AFAIC- Anyone who would continue using this company, deserves exactly what they get! Everyone here was given a warning in big capitol letter's over a year ago when this issue was discussed ad nauseam , and some of you still chose to ignore these warning signs, regarding with whom exactly the PayPal you're dealing with. You reap what you sow.



Not relevant, but I'm an acquaintance of a fellow gun member, who's been battling PayPal for over 2 years trying to recover the over 16k of this funds they've frozen, for perfectly legal firearm transaction.
 
There is nothing further to be gained here.

If you use PayPal, whether as a buyer or seller, and decide to not abide by their rules, or attempt to circumvent the reporting rules as imposed by the IRS, then you are, unfortunately, on your own.

It is an issue beyond our ability to rectify...or provide alternatives to. This site in no way endorses circumventing the rules and regulations of either.

There is no free lunch.
 
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