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Paypal (2 Viewers)

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jerryua290

Footballguy
I just heard from one of the commissioners in a league I am in that Paypal is freezing accounts.  Has anyone else seen or heard about this?

 
I'm sure it relates to the new 1099-K requirement.  Starting Jan 1 Paypal, Venmo etc need to send 1099-K's to those who receive payments over $600, the old amount was $20,000.  Payments to family/friends are supposedly excluded but I'll believe that when I see it.  They probably "froze" the payments because they don't have the recipients social security number.  A friend of mine just resold concert tickets through Ticketmaster for a covid rescheduled concert she can no longer attend.  They are asking for her social even though she sold them at a slight loss.  This is the new digital world I guess.

 
jerryua290 said:
I just heard from one of the commissioners in a league I am in that Paypal is freezing accounts.  Has anyone else seen or heard about this?
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Yeah, I heard that too, and it may be more rumor than fact.

I am in four leagues commissioned by the same guy (won't name him) who claims his PayPal account has been frozen so he can't pay out 2021 fantasy winnings at this time. He runs like 30+ leagues and was real slow at paying my winnings a couple years back (wasn't paid in full until April) and claimed that the bank he transferred the league funds to wouldn't let him access his account. I suspected he had spent the dues money and his leagues had become a Ponzi Scheme and was paying me in dribs and drabs with dues collected for the forthcoming season.  In any event, I think that he is now using this "PayPal has suspended my account" excise to avoid paying out monies he was supposed to hold, but no longer has. 

 
Send to family or friends.   However, none of my leagues I commish have an amount over $600

 
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jerryua290 said:
I just heard from one of the commissioners in a league I am in that Paypal is freezing accounts.  Has anyone else seen or heard about this?
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I just transferred $ from PayPal to my bank. I use them as one of my online payment options. 

They only freeze accounts for janky activity. So maybe your commish is into some shady Ish, because my account is fine.

Or could just be an excuse. Give him your cash app or Venmo. 

💡 

 
squistion said:
Yeah, I heard that too, and it may be more rumor than fact.

I am in four leagues commissioned by the same guy (won't name him) who claims his PayPal account has been frozen so he can't pay out 2021 fantasy winnings at this time. He runs like 30+ leagues and was real slow at paying my winnings a couple years back (wasn't paid in full until April) and claimed that the bank he transferred the league funds to wouldn't let him access his account. I suspected he had spent the dues money and his leagues had become a Ponzi Scheme and was paying me in dribs and drabs with dues collected for the forthcoming season.  In any event, I think that he is now using this "PayPal has suspended my account" excise to avoid paying out monies he was supposed to hold, but no longer has. 
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This. 

 
MTskibum said:
Matthew berry is the source of this rumor.

https://twitter.com/MatthewBerryTMR/status/1479296105305325569?ref_src=twsrc^tfw|twcamp^tweetembed|twterm^1479296105305325569|twgr^|twcon^s1_c10&ref_url=https%3A%2F%2Fpublish.twitter.com%2F%3Fquery%3Dhttps3A2F2Ftwitter.com2FMatthewBerryTMR2Fstatus2F1479296105305325569widget%3DTweet
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Whoa - that’s a pretty reliable source.

troubling that they mention Venmo. That’s how I paid out my league last year, and was planning on doing so again this year. 

How could they identify it as a fantasy payout if I don’t specify? 

 
Hot Sauce Guy said:
Whoa - that’s a pretty reliable source.

troubling that they mention Venmo. That’s how I paid out my league last year, and was planning on doing so again this year. 

How could they identify it as a fantasy payout if I don’t specify? 
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Looks like it's majority from people saying it in the comments.

Seems like some beyond that as well, probably algorithms that track 11 dudes sending $50 to the same guy around the same time and then one of them getting back a chunk of that at the end of FF season.

 
FreeBaGeL said:
Looks like it's majority from people saying it in the comments.

Seems like some beyond that as well, probably algorithms that track 11 dudes sending $50 to the same guy around the same time and then one of them getting back a chunk of that at the end of FF season.
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I guess we should all be using league safe,  but that makes a lot more sense for leagues where folks don’t know each other.

I've been friends with everyone in my leagues for decades.

 
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I should follow up my other post.  There was some issues with the NCAA basketball pool I was in.  The organizer kindly asked everyone to stop putting tourney/NCAA/etc in the comment because I guess he was flagged.

 
:oldunsure:  

I’ve been using PayPal for maybe a decade now(?) without issue. I haven’t paid out yet because we agreed back in May to hold a two week championship (you can argue that was a bad choice but 75% of the voters opted for it). 
i haven’t seen any sign of an issue yet but we’re fairly small scale with under $1,000 total over 32 teams. 

 
Had no issue. Then again I'm outside the US and we take care not to mention gambling or fantasy football when transferring so your mileage may vary

 
Paypal has been doing this for 20 years. Any reference to gambling or fantasy sports is an automatic freeze and has been forever. 

 
Its mazing to me that they have the right to keep your money. Force you to close your account? Sure. Keep money that doesnt belong to them? I wonder what they pay their lawyers? 

 
Cjw_55106 said:
Its mazing to me that they have the right to keep your money. Force you to close your account? Sure. Keep money that doesnt belong to them? I wonder what they pay their lawyers? 
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Apparently they are private companies who set their own policy so they can do whatever they want.

 
ChiefD said:
Paypal has been doing this for 20 years. Any reference to gambling or fantasy sports is an automatic freeze and has been forever. 
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for me the concern is Venmo. They actually were marketing it as an app for paying out fantasy football to your friends at one point.

so far, I can’t find any documented policy from Venmo stating otherwise.

 
Hot Sauce Guy said:
for me the concern is Venmo. They actually were marketing it as an app for paying out fantasy football to your friends at one point.

so far, I can’t find any documented policy from Venmo stating otherwise.
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I’ve never checked their policy, but PayPal and Venmo are owned by the same company

 
I sent this to my leagues

 2022 league fees and starting in 2023 - New 1099-K Tax Laws

Looks like if anyone receives more than $600 in PayPal they will have to pay taxes on it starting Jan 1 2022. I know some of you are already paid for 2022 (don't worry you're fine), some partially, and some not at all. For 2022 I would like anyone owing money to send me a check instead of sending to PayPal. For 2023, for sure we won't be carrying over any winnings from 2022 to 2023 and beyond. I am still figuring out what we will do for 2023 to get around this new tax law.

 
So if all the fees were collected last year, why is this an issue right now?

The 1099-K change will take effect January 1, 2022. PayPal and Venmo will be required to provide customers with a 1099-K form if they receive $600 or more in goods and services transactions during the 2022 tax year.

This means you will need to take into account the Threshold Change with your Tax Year 2022 filings. The In-flow and Out-flow change has not been considered by Congress yet and therefore doesn’t have an effective date.

 
habsfan said:
Aren't fantasy winnings also earnings?
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I don't think earnings is a factor so far as Venmo and PayPal are concerned. Are fantasy football winnings a good or service? You aren't buying anything, and the payment is unrelated to the performance of a service. Generally the tax debate for fantasy football is whether it is a hobby, or gambling.

You should technically be reporting fantasy winnings on your tax return but that doesn't mean it should be reported on a 1099-k.

You aren't paying a stranger for a couch or to paint your house, you're settling a bet with friends. Based off that article I wouldn't expect these transfers to be reported if they are coded correctly as a friend and family payment.

 
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kevinray said:
I don't think earnings is a factor so far as Venmo and PayPal are concerned. Are fantasy football winnings a good or service? You aren't buying anything, and they payment is unrelated to the performance of a service. Generally the tax debate for fantasy football is whether it is a hobby, or gambling. 
Click to expand...
It sounds like as the lines start to blur between what these companies do and what banks do, they are going to start to be held similarly accountable for the source, purpose and destination of the funds that flow through their hands.

 
Sam Quentin said:
Would leaguesafe have the same legal compliance issue?
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Must be a loophole because they’ve specifically branded themselves as a fantasy sports $ distribution service.

I wonder if it has something to do with general vs specific. 

honestly couldn’t answer - my dynasty league has used them for years. 

 
bicycle_seat_sniffer said:
just had a commish tell me all his money is locked up? is this true?
Click to expand...


Maybe, maybe not. Depends on whether if one contacted PayPal that they would verify to a 3rd party the status of an account (being in good standing or suspended). My guess is that they probably don't give out that information. 

 
What about the commish receiving league fees?  If he receives money for FF payments of league fees he would be subject to getting a 1099-K from PayPal the way I read it.  Yes, I could prove I sent back those payments to the league, but I don't want the hassle.  Not sure if they send to family and friends option will change that.  How does League Safe fit into all of this?  As a commish I don't want PayPal sending me a 1099-K form for money the league pays their fees.   If this also applies to LS I will just do everything by check.

 
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Note on the new law --

This change comes after President Biden signed the American Rescue Plan Act of 2021 (ARPA) into law on March 11th, 2021. According to Forbes, the bill specifies the minimum threshold has been lowered for Form 1099-K, a form filed by the Payment Settlement Entities (PSEs) to report gross amounts of all reportable payment transactions.

This law will become effective in 2022 and will impact the January 2023 filings.

Thanks Joe :)

 
I had no issue sending money or receiving money. I wish I had known about the taxes, would have sent my friend 2 payouts to keep it under $600

 
Ilov80s said:
I had no issue sending money or receiving money. I wish I had known about the taxes, would have sent my friend 2 payouts to keep it under $600
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It's not individual transactions, but a total of $600 or more for the year.

 
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I opened up a new savings account today and withdrew everything out of my PayPal account into my checking, which I will transfer to the new savings account.  I'm not taking any chances with PayPal with the rumors of freezing accounts.  Also, even if sending to family and friends circumvents the new tax law now, you can guarantee it won't forever.  I'm just going to do all league business by check until I know more.  I'm also not convinced LeagueSafe will be immune either.

 
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