Is it true that PayPal isn't always trustworthy?

Paypal and taxes (collecting money that isnt mine)?

• I think i might need a CPA. I have a considerable amount of money (~10k) that has been sent to my paypal account that wasnt actually my money. For example, i sold my parents TV, a laptop for my neighbor, numerous friends textbooks, and maybe a few other random things over the course of the year. However, whent he money came in it was always given via check to whoever the owner was after it made its way to my account. I have a feeling the IRS could interpret this as personal income and thus i should be paying income tax on it. Anybody have any knowledge of this? Paypal is asking me to submit tax id for IRS, and just want to figure out the best way to protect my self.

• Answer:

  PayPal and other payment processors are required to generate a Form 1099-K if you have a total of more than 200 transactions that total $20,000 or more. The 1099-K can be generated for lesser amounts at the option of the payment processor. The IRS gets a copy of that, whether it's required to be filed or not. Selling personal items for less than what they cost you does not generate a tax liability. That said, it's not wise to sell things for other people. Hopefully you kept accurate records of all of these transactions in case the IRS asks about it. Going forward, let them get their own PayPal accounts. You really don't need the IRS nosing round in your business for someone else's money.