Slashdot Mirror
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."
Does this mean that sellers will now add a "sales tax" to what they're selling in order to compensate for this new tax? And who decides how much tax is paid? States? The National Government? (Please excuse my ignorance in American Government policies)
Life is rarely fair. Cherish the moments when there is a right answer.
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
I'm not upon this stuff, but is there some law that says everything has to be taxed?
If you want news from today, you have to come back tomorrow.
The catch here is that if you're audited, they (through Ebay) will have the proof you made, say, 10000 dollars last year selling stuff on Ebay. But you have to provide the reciepts proving that you spent 8000 (or 11000, or whatever) acquiring those goods for sale.
Have you been touched by his noodly appendage?
Yeah, I'm a little unclear on what happens if you don't have those receipts. Sorry, Uncle Sam, I don't have the receipt for the DVD player I bought back in 2001 for $599 and just sold for $100. If you insist on assuming that my basis in the DVD player was $0 and tax me on the whole $100, you can bet I will find a way to make up for it elsewhere.
Bring it on.
When my employer tells the IRS how much I'm making it's reporting.
When eBay tells the IRS how much auctioneers are making it's snitching.
Funny how that works.
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.
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.
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.
I've sold a lot of things on eBay, but never for more than those things cost me. For instance, I use a laptop for a year or two, then sell it on eBay for less than it cost me.
If forced to account for the "income", can't I also offset it by the "expense"?
-- Mark Lyon http://www.marklyon.org
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.
If forced to account for the "income", can't I also offset it by the "expense"?
Did you claim that laptop as a business deduction when you bought it? If you did, then you'll have to claim the money from the sale as income. If not, you've already paid your income tax on the money you spent on the laptop, so getting some of it back selling it later isn't taxed.
paintball
Because trying to play hardball with the IRS is a bad thing. Suddenly eBay has a full audit by the IRS. Then they find they are having a 7 year history full audit then next year they are doing it again. the year after that eBay says, "why are we getting audited every year?" IRS points to thier saying no and people ebay sales start going to IRS.
Paying taxes to buy civilization is like paying a hooker to buy love.
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
This happened two weeks ago to a friend of mine, Jim, who called me in outrage and explained:
He geows and collects orchids and has phytosanitary (ie, the proper) permits to import
flasks of seedlings into Canada from the US.
Now, most sellers won't/can't ship to Canada, but that's alright, we both know a guy
that lives in Buffalo, Dick, that receves these shipments then they're collected by Jim from Buffalo
and he walks them through customs with the proper forms and the flasks are imported legally and properly.
Last time he did this he got won some auctions for plants, as well as flasks of
seedlings - the plants were a gift for the guy in Buffalo for his trouble.
Last week he had a guy from the Ministry of the Environment that explained to him when he showed up
at Jim's house than Jime has a permit to import flasks but not plants and he bought some plants and
they know this because they saw it on ebay. The catch is ebay had had to have
given the MoE this Jim's contact data as there is nobody else who has it and no
other way to get it.
So apparantly ebay cooperating with the IRS might be news but ebay cooperating
with any gov official that walks in and asks for data is already happening.
(My friends simply had to show the plants in question were delivered to the US
and stayed there which was easy)
Need Mercedes parts ?
Myself and my friends all heavily use eBay up here in Canada, because the markups on certain items (cellphone accessories, car audio, jewelry) are often 200-500% locally, even from traditional retail outfits. For example, they actually charge $30 for a leather cell phone case here. $20 if you go to one of those shady asian-import places. These items have no value on ebay, and often sell for $0.01 plus $6 - $9 shipping..
Plus, if I buy locally I'm paying 14% tax.. if I buy from eBay, I've got a good chance of avoiding taxes entirely (depends on the cost of the item.. under $10 nobody bothers, and if the seller is nice enough to ship as a 'Gift' then it's totally tax-free for me).
In summary, eBay is still cheaper (in many cases) for those of us north of the border.
DJ kRYPT's Free MP3s!