Guide 30 · Federal tax, beyond 5472

Form 1099-K, Stripe and marketplace reporting for a foreign-owned LLC

Every January, founders meet a form they did not expect: a 1099-K from Stripe or a marketplace, reporting their gross payment volume to the IRS under the company's EIN. It is not a tax bill and it is not income — but mishandling it creates exactly the correspondence founders fear. Here is what the form is, why the numbers look wrong, and what to do with it.

On this page

1. What the 1099-K reports — and what it is not
2. The threshold saga: why you cannot plan around a number
3. Why the name on the form causes the letters
4. Marketplaces: Amazon, eBay and the facilitator layer
5. What to do when the form arrives
6. How this fits your other filings
7. Reading is step one. The paperwork is the rest.

What the 1099-K reports — and what it is not

Form 1099-K reports gross payment volume processed for you by a payment settlement entity — Stripe, PayPal, a card processor — or by a third-party settlement organisation such as a marketplace. Gross means gross: the figure is the total of transactions before refunds, fees, chargebacks and adjustments, and before any deduction for what the goods or services cost you. The IRS receives the same form you do, keyed to the name and TIN on the account — for your company, its EIN.

Because the form reports volume rather than profit, a 1099-K that shows more than your revenue is normal, and one that shows your revenue exactly is a coincidence. The form's job in the IRS's system is matching: it corroborates that a business exists and transacts at roughly the scale its filings imply.

The threshold saga: why you cannot plan around a number

The reporting threshold for third-party settlement organisations was rewritten by statute, scheduled down by transition notices, and then restored — the American Rescue Plan's $600 rule was delayed by the IRS year after year, and the One Big Beautiful Bill Act in 2025 reinstated the long-standing threshold of more than $20,000 in gross payments and more than 200 transactions for third-party settlement reporting. Two cautions follow. First, payment card transactions — Stripe processing your customer's card directly — have no minimum threshold at all. Second, several states run their own lower 1099-K thresholds for state reporting. Plan on receiving the form; do not plan around a threshold.

Why the name on the form causes the letters

The most common 1099-K problem for foreign founders is not the amount — it is the name/TIN combination. The IRS matching program compares the name and number on the form against its records for that EIN. If the account was opened with a trade name, a shortened legal name, or the founder's personal name in the business field, the match fails and the correspondence begins: a CP575-adjacent mismatch notice or a backup-withholding warning (the B-notice process), telling the payer to withhold 24% of future payouts until the record is corrected.

The prevention is dull and total: the legal name on your Stripe and marketplace accounts must be the legal name attached to the EIN, character for character as the IRS has it — the same discipline our banking and Stripe guide sets out for account opening. Correcting a mismatch after the notice arrives is possible; not creating it is cheaper.

Marketplaces: Amazon, eBay and the facilitator layer

Marketplaces add a layer: Amazon, eBay and similar facilitators report as third-party settlement organisations for their sellers, and many also collect sales tax under marketplace-facilitator laws — two different functions on the same dashboard. The 1099-K from a marketplace covers your gross sales through it; the sales-tax collection the facilitator performed is reported separately and does not net against the 1099-K figure. Our Amazon guide walks the seller-specific version of this, including the economic-nexus questions the form does not answer.

What to do when the form arrives

• Check the identity block first: legal name and EIN exactly as issued. Errors here are the payer's to correct — request a corrected form from the issuer, in writing, before you file anything.
• Reconcile, do not transcribe: tie the gross figure to your books (gross receipts, then refunds and fees as their own lines). Your bookkeeping should be able to explain the difference between the 1099-K total and your revenue in one schedule — see our bookkeeping guide.
• Keep it with the year's records: the form belongs in the same file as the 5472 workpapers, because your CPA will ask for every information return the EIN received.
• Never ignore a mismatch notice: B-notices have response windows, and the consequence of silence is 24% backup withholding on money that is yours.

How this fits your other filings

For a foreign-owned single-member LLC, the 1099-K does not create a new filing: the company still files Form 5472 with its pro-forma 1120 (the explainer is here), and the founder's personal position still turns on ECI, as our 1040-NR guide sets out. What the 1099-K changes is the evidence in the room: the IRS now holds a volume figure for your EIN, and filings that ignore it invite questions. Sethhost's portal keeps the form on the document shelf next to the formation record, and the compliance calendar carries the January arrival window — the form is expected, filed, and reconciled, which is the whole of the discipline.