@AmyC ,
It would be worth your time to read the entire thread because another expert, @PatriciaV , earlier in the thread disagrees with your conclusion.
I’m sorry that the link would not open for you but if you Google “PayPal Tax Loophole,” you will find several good articles (Bradford and Bloomberg) and they all indicate that if payments are made via PayPal no 1099-NEC needs to be issued to the recipient.
—I think that is ABSURD so in theory I agree with you, but apparently that has been the law up until 1/1/22, and apparently it has been a well-known loophole.
The articles indicate that the recipient who has received > $20,000 could end up “double-reported” to the IRS if the payer issues a 1099-NEC form and PayPal also issues a 1099K.
However, my client issued 1099-NEC forms last year (for 2020) even though he paid all of his vendors via PayPal and I have confirmed with one of his vendors that they did NOT also receive a 1099K from PayPal in 2020 even though they did receive > $20k.
Definitely need to read the entire thread though for context.
