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IRS May Ask eBay To Snitch On Sellers
Makarand writes "The IRS thinks that many sellers on online auction sites are unaware of their obligation to declare their profits and pay their taxes to the IRS. Tax experts are now asking the IRS to require online auction sites like eBay, Yahoo, and Ubid to report the gross sales numbers for their sellers. Such a requirement will surely send a shock wave across the online trading world because it could drastically reduce the profits a seller would make on these sites. The IRS thinks it can collect an extra $2 billion in taxes from this requirement that auctioneers report sellers who complete 100 or transactions a year worth at least $5,000."
Just create multiple accounts, each keeping within the $5000 annual limit. Take that IRS!
fucked over for US sales tax.
Do not try to read the dupe, thats impossible. Instead, only try to realize the truth
What truth?
There is no dupe
It will only force them to pay income taxes on profit they make.
Such a requirement will surely send a shock wave across the online trading world because it could drastically reduce the profits a seller would make on these sites.
I hate the tax man as much as anybody, and my profits are already reduced by him.
So where did the submitter get the idea that eBay sellers are supposed to get a free pass?
If you already pay your taxes as the law requires of all of us, then your "profits" will not change. And if you don't... well, then you should go to jail like that guy from Survivor.
No, in the case of your employer it's still snitching: the business relationship is between you and company for which you work. The IRS inserted themselves into that relationship in order to extract their pound of flesh before the worker receives it. That doesn't make such "reporting" intrinsically right, in anything but a legal sense.
The higher the technology, the sharper that two-edged sword.
The only thing eBay being in the U.S. has to do with this is that they are more willing to bend to the pressure of the IRS pushing for this information. eBay is not being taxed. Sales are not being taxed. Even if eBay moves off-shore, the fact remains that when the sale completes and the seller receives cash for the transaction... that is by definition "income".
While it is unarguably legitimate income that is required to be reported for U.S. residents, eBay is only one of COUNTLESS sources of non-employment based income that are absolutely untracable by the IRS. Tax evasion of this sort probably only amounts to a relatively small adjustment to the overall taxable income that the IRS handles. My guess is that IRS is just going for the "low hanging fruit" with eBay since all the transactions are recorded in a database and are easily deliverable; it is unlikely that they will be met with the same success in many other venues.
However, if in that year you sold 100 DVD players and said "sorry, no receipts," you can expect the full 10k as income. Plus penalties and interest, likely.
The whole point of this request by IRS is to ensure compliance by people running businesses on ebay, hence the $5k limit.
Did you know if you buy $5,000+ of goods from a business that you're planning on reselling... THEY'RE supposed to 1099 you for that?
Well according to wikipedia
r igins
"In the 2005 United Nations World Drug Report, the value of the global illicit drug market for the year 2003 was estimated at US$13 bn at the production level, at US$94 billion at the wholesale level , and at US$322bn based on retail prices and taking seizures and other losses into account."
http://en.wikipedia.org/wiki/Illegal_drug_trade#O
94 - 13 = 81 billion
81 * 25% ~= 20 billion.
so $20 billion in income taxes. and 94*.06 `= $5.5 billion in sales taxes.
That would be nice to get a bigger tax return due to the legalization of drugs wouldn't it! not even including the tax savings from not incarcerating drug users.
The so-called "Fair Tax" idea is pushed by the rich, as it is of great benefit to them.
Under the "Fair Tax", the rich keep amassing wealth, but will pay absolutely nothing on what they gain but do not spend. Now, with this very large amount of the nation's income sitting around being completely untaxed, all that's left to tax is what is actually spent each year: The very rich, while spending more than the average person, spends a much, much smaller percentage of their income each year. Let's think this through: You are only taxed on what you spend, minus the "poverty level rebate" - the poor pay nothing, so only the middle class and rich really pay taxes. Let's say the average rich person spends 20% of their income each year, and the average middle-class home spends 90% (this is not unrealistic when you consider just how much basic living expenses and a few basic luxuries cost).
This means that the rich are paying 80% less taxes on their income than currently, while the middle class only gets a 10% break. Where exactly do you think that loss of taxes will be made up? Well, there's apparently only one place they're allowed to - the "Fair Tax". If this tax rate then doubles to make up for the short fall, the rich are paying 40% of their previous tax rate, while the middle class is paying 180% of their previous tax rate!
When you consider how much time and money the rich spend abroad, you can see that their share of taxes falls even lower, since they will pay no taxes whatsoever to the IRS when they spend it overseas.
Simply put, "Fair Tax" is a bullshit name for this concept; it's the same old "rich get richer, screw the middle class" idea that drives most unfair tax law changes.
You want fair, easy, and simple? Have the IRS tax be "X% of income over $Y minimum", with deductions only for those truly altruistic reasons, such as recognized non-profit charities.
I like taxes. Not everything has to be taxed but I am happy to pay some. I like working with computers in a university job and having a bit of time to myself. I'm really happy not to have to be a part time police officer, fireman, social worker, sewage worker, nurse, builder of roads, and all those other jobs that I really appreciate getting done around me and make my life better as a result. I pick the voluntary work I want to do (community gardening). Happy to pay a percentage of my income so those other jobs get done.
As another poster noted, it all comes down to political theory and your preference for how society is set up. My preference is public servants carrying out the shared societal tasks, well paid enough that they don't have to take bribes to feed their families. I'm happy to financially contribute to that system.
Are there really that many powersellers on ebay that they expect to get $2B from this small amount? I doubt it.
0 07/02/24/MNGMPOAK5C1.DTL it says the total amount of goods sold on ebay last year was $25.2 billion.
If we look at this article http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2
They're assuming then that they can raking in 10% of this amount as taxes. That would be amazing, particular if we assume a cost basis of 50%, particularly since the bulk of ebay-ers probably come under the $5,000 amount and if anything, probably sell for a "loss".
Do the math people, this doesn't add up. One of two things will happen: Either they're going to go after every eBay transaction, of they're going to get probably 1/20th of the amount they claim. They may be counting on the fact that when you sell a Stereo you bought in 1978 for $400, you won't keep the original receipt making you liable for the entire $400 amount.
Really, this will add up to a tax bill for everybody who uses ebay, and the only people who will truly benefit will be accountants and TurboTax.
You were mistaken. Which is odd, since memory shouldn't be a problem for you