IRS Wants a Cut of Sales On eBay and Craigslist

Ponca City, We love you writes "In 2009, $60 billion worth of items were sold on eBay, meaning 'extra' money for many sellers, whose activities may provide them with taxable income. Now the Washington Post reports that beginning next year, a new law will require 'the gross amount of payment card and third-party network transactions to be reported annually to participating merchants and the IRS.' Also, for 2011 tax returns, 'taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions' will receive a new IRS form, known as 1099-K, for reporting the proceeds. The new tax issues shouldn't be a concern for people who sell just a few small items online for less than they paid for them, because as the IRS points out, income from auctions that resemble a garage or yard sale 'generally' isn't required to be reported. But if an online garage sale turns into a business with recurring sales and purchases of items for resale, it may be considered an online auction business. 'Generally, transactions resulting in a gain are reportable, regardless of whether the taxpayer is conducting a business,' says Gil Charney, principal tax researcher at The Tax Institute at H&R Block. The real reason behind the law is simple: Research shows taxpayers do a much better job of reporting taxable income when they know the IRS is receiving information about their transactions."

Comments

Re:Well for starters

[AK Marc]

The Fair Tax bill is the most thoroughly researched piece of legislation in the history of the USA and such questions have been exhaustively answered.

I'm glad I put the milk down, or it would be going through my nose right now. What's the economic impact of setting the pay-back line at poverty (as done now) vs twice poverty (and, of course, having a higher tax level to compensate)? It's never been researched at all. Back when no one heard of Fair Tax, I thought it great, and I asked the question, "why exactly poverty level?" and the answer back was something to the effect of "Because that's the lowest we can get it and the point is to sneak in something as regressive as possible while claiming it to be progressive." It is an arbitrary line drawn in the sand without *any* research at all.

If you disagree, please point me to some research done about how it would affect the US economy if that level was set at half-poverty, poverty, and twice-poverty. Go ahead, I'll wait.

And you are more civil than most with your "It's perfect, don't question The Fair Tax" stance. But usually, when I ask questions, they are even more self-righteous than that.

But mention that spending is more volatile than, say, income for boom bust periods and asking about what will be done to improve the stability of income, and they'll look at you like they never took econ 101. And these are the people claiming "the most thoroughly researched piece of legislation in the history of the USA" and miss simple things like spending being more variable than income. Really? Or correct me, where's the actual study on the effect of spending levels in varying economic times. After all, this completely unresearched piece of crap was so researched, you'd be able to prove me wrong easily. Instead, it's a good idea that was perverted early on by conservative people with the specific goal of getting the top income level as small as possible and convincing everyone else it was "fair."

When they have to name something with adjectives, you are safe in assuming the opposite, until they prove otherwise, and they haven't.

If you don't believe me, look at the utter shit being presented about it. http://en.wikipedia.org/wiki/File:FairTax_married.png Apparently, this "revenue neutral" legislation will reduce the taxes on everyone. Either someone's taxes have to go up, or it can't be revenue neutral. So the graph, done by "a Boston University study" (really some guy's thesis, and I've done one of those, I know what crap they can be) is presented like fact, and is demonstrably flawed. That's the level of research this gets. "It'll lower taxes for everyone, and is revenue general too" and no one notices those are contradictions... With research like that, who needs facts?