Hello everyone. I thought I would post an update on my PayPal 1099-K situation as others may find it interesting.
So, after others stated they received an updated 1099-K from PayPal, I checked my account and I also received an updated 1099-K on March 16, 2023. I saw PayPal backed out all of my sportsbook transactions with the exception of July 2022 for some reason. Over the past week, I have been going back and forth with PayPal to get the $10,000 in sportsbook transactions from July 2022 removed since they removed all of the other sportsbook transactions from the rest of the year.
However, I learned they cannot do that, and this is the interesting/irritating part as to why. FanDuel categorizes transactions to PayPal as "personal" and they do not need to be reported so they were removed. Unfortunately, Caesars reports transactions to PayPal as "goods and services" and PayPal, per the law, must report them. There is nothing PayPal can do.
The specific response from PayPal is, "Rebates and other payouts may be classified as goods and services transactions depending on how the sender categorizes their payments. We realize that these amounts may or may not be included in your taxable income, but we're required to report them. You should work with your tax advisor to determine how these transactions should be treated for tax purposes.
Payments categorized as "Personal" or "Donation" are not included in the 1099-K gross amounts."
I already opened a case with Caesars to see if they can, in the future, categorize transactions from my account to PayPal as "personal", but I am not too hopeful about that happening.
Just an FYI, I just know how FanDuel and Caesars are currently reporting transactions to PayPal. I do not know how any of the other sportsbooks may be reporting their transactions.
