F1 Student received 1099-K tax form from paypal - need advice

New
micscott

New

micscott
Mar 30, 2021 8 Comments

I’m an F1 Student. Last year I had Amazon/wish.com/walmart sellers reaching out to me on facebook asking me to purchase their products, and they will refund me sometimes partial, sometimes full amounts paid. I thought oh well, what harm could it do. I figured the sellers were trying to boost their products and it seemed harmless. Since I was not offering any service to them as well like writing reviews etc., It all seemed legal.

Couple of days ago I get this 1099-k form from Paypal summing up a bunch of those transactions. This form is issued for any account that receives credit card payments. IRS wants to tax me on those transactions.

The problem is, this form is issued to self employed people or businesses. Receiving this form means IRS thinks I was selling stuff or running a business. If I pay tax on those transactions, it means I am accepting that. While that is not true at all, the bigger problem is I am on an F1 visa, and rules stipulate I cannot be self employed or have income through sales without explicit permission from USCIS which obviously I don’t have. Paying that tX indirectly means I am in violation of my F1 status.

Seeking help here if someone has been through this situation, or if any tax expert can help me get out of this situation, I would greatly appreciate it. P.S. i am willing to pay a licensed tax expert do my taxes for this year if they can help me figure out a solution to this and justify it to IRS that this income was not taxable.

#cpa #irs #tax

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TOP 8 Comments
  • Red Hat
    khloeTx

    Go to company page Red Hat

    khloeTx
    As per https://www.paypal.com/us/smarthelp/article/how-does-paypal-report-my-sales-to-the-irs-will-i-receive-a-tax-form-1099-k-faq729 you only get it if you received more than 20k or did more than 200 transactions. That seems like a lot. Did you do more than that by any chance? Or are located in one of the other states mentioned in the article?
    Mar 30, 2021 5
    • Red Hat
      khloeTx

      Go to company page Red Hat

      khloeTx
      I tried looking this up online and there are a bunch of posts regarding this. None of them could give any conclusive advice but that's cause none of them were from tax professionals. You may want to dig deeper on the internet or consult a tax professional(I've heard based on your income you can qualify for free tax consultations at vita). One thing I found throughout is that you should report it. The reason being the irs has the form and you not reporting it might make them send a notice. But my feeling is that you should be fine in the long run. The income reported is barely anything and can always be explained
      Mar 30, 2021
    • New
      micscott

      New

      micscott
      OP
      Thank you. I did quite some research online as well but could not find anything substantial that could help. I will look into the tax consultations at vita... I know I definitely have to file this form. Hopefully i can find a decent lawyer who can help me explain this form...
      Mar 30, 2021
  • Check Dm
    Dec 26, 2021 0
  • Oracle
    fu_money

    Go to company page Oracle

    fu_money
    you might have worked illegally, if you file taxes it will be on the record, talk to lawyer
    Mar 30, 2021 0