IRS To Go After eBay Sellers

prostoalex writes "Fed up with numerous violations of tax law by individuals and businesses selling goods on eBay, Amazon Marketplace, uBid.com, etc., IRS is pushing Congress to make online marketplaces responsible for reporting the sales information to the tax man, in order to prevent under-reporting of the income. eBay's 'own statistics suggest that there are 1.3 million people around the world who make their primary or secondary source of income through eBay, with just over 700,000 in the United States', News.com says." How long before the same fate befalls the folks who make a living working the Massively Multiplayer secondary markets?

Comments

Re:Nothing To See Here

[kt0157]

There is no tax due in the UK on your personal property when disposed of, even if at a profit (personal effects are exempt from capital gains tax because they would mostly generate losses to be offset against other gains). If you trade stuff you acquire for re-sale, and you trade enough to go over the VAT threshold (which is quite high), you will have to account for VAT as a second-hands good trade (essentially, VAT is charged on the difference between the buy and sell price). On the upside, you can reclaim VAT on all the kit you use to trade (e.g. computers, fuel, etc.).

In the US and Canada things are a bit different due to sales tax. In Ontario, for example, everyone is required to send a cheque for PST to the Ontario finance minister for all sales of goods, no matter how small, no matter if a yard sale, no matter if a private sale. Of course, not one citizen abides by this crap law (except where the provincial or federal Government can track the ownership of private goods, such as cars, planes and boats). But once EBay are sending nice XML files straight to the Government tax weasels you can imagine a nice automated bill (applied directly to your EBay account, naturally).

Re:I support the IRS on this issue

[Snorpus]

If you buy an item, and then resell it at a higher price, you are no different than the shop around the corner (or WalMart)... the difference between your selling price and your purchase price, less expenses, is income, and subject to income tax. If you're selling used household items (that baby carriage that's been collecting dust for years in the basement), and you sell it for less than you paid for it, there is no income tax (in fact, you *might* be able to deduct the loss, if you have other gains to offset it). Of course, the IRS wants proof that you sold it at a loss.

The fact that you paid income tax already on your wages from your regular job is irrelevant.