THE IRS HAS TAKEN MY TRANSACTIONS VIA PAYPAL AND IDENTIFIED THEM AS TAXABLE INCOME

What I'm still curious about is how the IRS found out about the transactions.

Did you sell your personal stereo gear, and can prove you paid for them? Then there is no tax due if you sold for less than what you paid for. If you sold your personal items for more than what you paid, then it’s a capital gain and taxes are owed. But the biggest trap here is that the items you sold you didn’t plan on selling. If you planned on it, then the IRS can label you a sole proprietorship and that’s a whole different ballgame. Then the locals come sniffing around for sales taxes. Talk to a CPA and be honest.

The irs said I didn't pay my taxes for 5 years, what should I do.🤔

The Form 1099 only reports gross sales proceeds, not gain that is taxable, because eBay (like a broker) doesn't know how much you originally paid for the item sold. Similarly, the IRS does not know, so if you failed to tell them, they assume it's all gain and taxable. That's why any time you receive a Form 1099 (eBay should have sent you one), you should report the amount on your return, show the basis (which is typically more than the sales proceeds, so resulting in a loss, non-deductible for hobby items), and show the loss (or gain, if you have any). That avoids having to deal with the IRS in the future. Above all, don't miss the deadline to reply to the IRS! You can normally get an extension of the deadline (by phone if you can get through) if needed to find your info, or respond with general explanation and expect to need to file evidence of purchase price.

I’m moving off PayPal seems like it’s time.