Recently, Ticketmaster has started asking ticket buyers to provide their tax information when purchasing tickets. This has raised questions and concerns from customers wondering why Ticketmaster needs this information.
The Ticketmaster Tax Requirement
In 2021, Ticketmaster began requiring ticket buyers in the United States to provide their tax identification numbers, such as Social Security numbers or taxpayer IDs, for certain events. This is due to a change in tax reporting requirements passed by Congress in late 2020.
The new law requires third-party payment processors like Ticketmaster to report gross sales for tickets over $600 to the IRS. This allows the IRS to easily track ticket sales and make sure appropriate taxes are being paid on those sales.
Why the Tax Reporting Requirement Was Added
Prior to this law change, ticket sales could easily go underreported to the IRS since marketplaces like Ticketmaster were not required to report sales figures. By requiring platforms to collect tax IDs and report gross sales, the IRS can now cross-check ticket sales data with individuals’ reported income for improved tax compliance.
Some key reasons this tax reporting requirement was added include:
- To close the “gig economy tax gap” – Income earned from side jobs and gig work often goes unreported without third-party reporting.
- To curb potential tax evasion – It’s easier to underreport or not report income without being provided sales data to the IRS.
- To increase tax fairness – This levels the playing field so gig workers and side earners pay their share of taxes like regular employees.
What Ticket Sales are Affected?
The new tax reporting rule applies to third-party sellers processing payments, not just Ticketmaster. Some key details on which ticket sales are affected include:
- Only individual ticket sales over $600 are reported – This threshold is cumulative for the tax year.
- Business purchases are excluded – Only individual consumers are required to provide their tax ID.
- The rule applies per event – $600 is measured on a per event basis, not per vendor.
So if you sell three $500 tickets to a show, none would be reported. But if you sell two $700 tickets to a different show, those would be reported since the total per event exceeds $600.
Why Ticketmaster Requires the Information
Ticketmaster is simply complying with this new tax reporting law. As a major ticket marketplace, they are required to collect tax IDs once ticket sales exceed $600 for an event and must report those sales figures to the IRS.
Essentially, the IRS wanted an easy way to track sales figures that go through third-party platforms. Requiring platforms like Ticketmaster to collect tax IDs provides the IRS with a paper trail to those customers.
Some key reasons Ticketmaster requires this information from customers include:
- To comply with federal law – The new rule requires this reporting.
- To avoid IRS penalties – Platforms that don’t comply can face hefty penalties.
- To continue processing payments – Third-party payment processors must comply to stay in business.
What Happens if You Don’t Provide Your Tax ID?
If you don’t provide your tax ID, Ticketmaster will not be able to process your ticket purchase if it exceeds $600 for that event. This is because they are required by the IRS to collect tax IDs once sales surpass that threshold.
Options if you don’t wish to provide your tax ID include:
- Cancelling your purchase – You can opt not to buy the tickets.
- Splitting your purchase – Buy tickets below $600 to avoid reporting.
- Using a different payment method – Pay with a check or in cash instead.
However, the new law applies to any third-party ticket seller processing payments over $600. So you may run into the same requirement with other vendors as well.
Will Your Tax ID Information Be Secure?
One common concern is whether your personal tax information will be safe and secure with Ticketmaster. The company has stated that they take your privacy and data security very seriously.
Some measures they take to protect your data include:
- Using secure networks – Data is encrypted in transit and at rest.
- Strict access controls – Tax data access is restricted to select authorized staff.
- Compliance with regulations – They adhere to PCI and GDPR standards.
- Professional handling – Tax IDs are only used for required reporting.
In addition, Ticketmaster states that your tax identification number will only be used for the purposes of required tax reporting and will not be used for any other reasons without your consent.
Potential Risks
While Ticketmaster has security measures in place, there are always risks any time you provide personal information online. Potential risks include:
- Data breaches – Hacks could expose tax IDs if data protections fail.
- Unauthorized access – Staff or hackers could improperly access the data.
- Human error – Mistakes in handling data could lead to exposure.
While unlikely, you’ll have to weigh these risks against the requirement to provide your tax ID to purchase tickets through Ticketmaster if your sales exceed $600 for an event.
Alternative Ticket Purchase Options
If you are unwilling or uncomfortable providing your tax ID to Ticketmaster, you still have some options to purchase tickets, including:
- Buy directly from the venue box office – Venues are likely not required to report sales.
- Use a ticket resale marketplace – Resale platforms may have different requirements.
- Purchase season ticket packages – Sports team bundles may be exempt.
- Split purchases into multiple orders – Stay under $600 per event threshold.
However, be aware that other major ticketing platforms will likely have the same tax reporting requirements as Ticketmaster per the new federal law.
Should You Avoid Ticketmaster?
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Ultimately it’s a personal decision whether avoiding Ticketmaster is worth the tradeoff of potentially losing ticket availability or paying higher prices elsewhere. Many customers may decide the convenience outweighs the small risk of providing tax ID information.
Understanding the Tax Reporting Requirements
The bottom line is Ticketmaster is simply adhering to IRS requirements that mandate the collection and reporting of tax IDs on ticket sales over $600. As a major ticket platform, Ticketmaster has no choice but to comply with these rules.
While customers may be uncomfortable sharing their personal information, Ticketmaster states they take data privacy and security seriously. You’ll have to weigh your personal risk tolerance against the convenience of easily obtaining tickets.
If you do choose to provide your tax ID, you can feel confident the information will only be used for legally required tax reporting purposes. But you always have the option to limit sharing of personal data by purchasing tickets from alternative sources as well.