Australian Gov't Asks eBay To Name Big Sellers

beaverdownunder writes "In an effort to combat fraudulent claims lodged within its Centrelink welfare-payment agency, the Australian Government has asked auction-site eBay to name all Aussies who sold more than $20,000 worth of goods in the last year. Should someone be found to have been doing such a high-volume of business on eBay while claiming Centrelink benefits but not declaring that income, they could potentially face prosecution. However, the president of the Australian Council for Civil Liberties, Terry O'Gorman, says this action is a gross invasion of privacy. 'What we say should happen is that if police have probable cause for investigating someone, they go to a magistrate, they get a warrant and they access that person's eBay records that way,' he said."

Comments

I don't see the outrage

[The Dancing Panda]

I guess I just think people should pay their taxes. If I make over 20,000 dollars, my employer reports me. Not sure why other people should get away with it because they're selling stuff on E-Bay. It's not really an invasion of privacy. They didn't ask for what people were selling, just if they made over a certain amount of money selling stuff. And it's not like their looking for some people who sold one or two trinkets. 20,000 is a lot of income you're trying to hide.

Re:I don't see the outrage

[6ULDV8]

eBay also has the right to say "not without due process" as it applies to the jurisdiction.

Re:I don't see the outrage

[Cimexus]

Yeah, inclined to agree. I'm no more of a fan of government intrusion into more areas of life than the next guy, but as an Australian taxpayer I also want to see the welfare using our tax dollars on those who are genuinely needy (given than most government benefits in this country are means-tested). This is no different than the dodgy guy down the road claiming Centrelink benefits without declaring his job, or claiming for non-existent children etc.

$20k seems like a reasonable threshold too, though perhaps you'd want to also add a minimum number of items threshold as well (someone turning over many items to make $20k can probably be said to be a 'business on the side', whereas someone who just does a one-off sale of something expensive, say a car, and who isn't likely to use Ebay much on an on-going basis, is a different story).

Re:I don't see the outrage

[mcmonkey]

One issue is, there's no way this info stays with the welfare folks. It's going to go to the tax revenue folks as well. And the drug folks to see if anyone is selling paraphernalia. And half a dozen other agencies.

The way modern governments and law have developed, you're pretty much guaranteed to be breaking some law.

But directly to DP's point, if there's evidence or reasonable suspicion someone is breaking the law, and the government goes after that person, that's not necessarily an invasion of privacy.

But this kind of fishing expedition is pretty much by definition an invasion of privacy.

Re:I don't see the outrage

[cpu6502]

The problem is that Ebay is not pure income. I didn't sell anywhere near $20,000 last year... more like $5000. But that's NOT really profit. The $5000 of used games/books/video originally cost me ~$7000 to acquire. So the net profit is negative income (a loss). I'd still be entitled to collect welfare or unemployment checks.

I would expect the tax agency to understand that basic principle, but I suspect they are more motivated by the desire to pay-off their budget deficit and will scew a lot of innocent people in the process..... people who are selling-off their possessions in order to survive unemployment, and actually losing money in the process. (Like my cousin who sold-off his $20,000 motorcycle for $10,000 just so he could buy food.)

Re:I don't see the outrage

[jmorris42]

But! But! This is on the Internet! None of the meatspace rules are supposed to apply here!

Bullcrap. Avoiding sales tax across state lines in the US dates back to Sears Roebuck and even makes some sort of sense. But the idea of somehow being beyond the law just because of the Internet is barmy. eBay is involved in the transaction as a broker. Here in the U.S. they should be forced into at least filing a Form 1099 or something, getting the state taxes comes back to the same problem as sales tax. And I'm sure Austrailia has a similar procedure to report income for non-employee contactor/consignment/etc sitautions. The actual story here is that they haven't been reporting this sort of income for years. Sounds like they need a knot yanked in their asses.

I'm a conservative with so many libertarian leanings I's switch if the LP wasn't overrun with Idiotarian Libertarians who seem to only care about being worse surrender monkeys than than Dems and legalizing weed. But there must be taxes and nobody gets a pass on paying them. How high should the rates be I'll be happy to argue; too damned high! But ya gotta pay something. And to be raking in $20K+ free and clear while suckling at the public teat is right out.

Re:I don't see the outrage

[narcberry]

So if my neighbor is cheating on his taxes, why should the government have my transaction records for ebay?

It would be no different than reading everyone's e-mails because they're "sure" someone is a terrorist.

Re:I don't see the outrage

[Amouth]

Not true - in the case of the 20k it is report-able income and the 25k value of the car is the lost value showing 5k in losses for the year meaning you wouldn't pay any taxes on the 20k because you didn't actually make money.

Here int he US if you have contractors or deal with people the company is supposed to send you a 1099 if they paid you X amount as they also will write off X amount as expenses so they don't pay taxes on it but rather you do.

In this case it would make sense for Ebay to be reporting 1099's (i know this is AU and not US but use the ideas not the names) and the individual would file them with their taxes just like anyone else.

I understand and agree with what they are trying to do, my bet is there is a better way of doing it via the existing tax laws than to make new laws for specialty cases.

Re:I don't see the outrage

[Lisias]

Are you so pro-government that you approve normal citizens doing their (government) job at their (citizens) expense?

It's up to the government to be able to correctly tax their citizens.

Your approach is like "you own me heavy money, unless you take the burden of proving you don't".

Re:I don't see the outrage

[cpu6502]

I am not obligated to pay California or any other foreign tax, because I don't live there and do not have representation in their government to make my voice heard. (i.e. That I think 9% tax is nuts.) I only have to pay tax to the governments where I have representation.

When I ordered some stuff from the UK, the store tried to scam me into paying VAT. Naturally I refused. I have no voice in the Parliament, and therefore have no reason to pay them a tax.

Re:I don't see the outrage

[140Mandak262Jamuna]

People have made this argument, and the courts have soundly rejected it. Otherwise every employer would save all the compliance and reporting costs related to reporting salaries and bonuses to IRS. All businesses would like to take the stand, "I would not maintain any records and would not provide anything till you get a court warrant". It is the duty of every citizen to cooperate with the government to catch the tax dodgers and free loaders.

You are probably a free loader and hate the ability of the government to find evidence of your tax dodging.

Re:I don't see the outrage

[QuasiSteve]

I didn't sell anywhere near $20,000 last year... more like $5000. But that's NOT really profit. The $5000 of used games/books/video originally cost me ~$7000 to acquire. So the net profit is negative income (a loss).

And if you tried to insure them, would their insured worth be $7,000?
If you didn't sell them, could you use them as the equivalent of $7,000 to purchase other goods, pay bills, etc.?
If you lost them, would you save up of $7,000 in order to regain your existing current wealth?
If you had to buy them again in the condition you left them in, would it cost you $7,000?

I guess if your tax system allows such tax shenanigans, you should certainly exploit it.

Re:I don't see the outrage

[jmorris42]

> But... eBay isn't GIVING the seller any money. They are CHARGING the seller for their service.

There is a consignment store/flea market across the street from where I work. If you put stuff in there for them to sell you can bet it will get reported. At least in theory.... we all know reality often differs, especially in a down economy... it isn't as bad as Greece yet. Explain why should eBay be different? Especially when you consider that for all practical intents and purposes 'eBay' == eBay + Paypal. So they are bringing buyer and seller together, charging fees AND processing the exchange of money.

As for your specific objections, selling for a different price than what was finalized on eBay is a violation of eBay policy and voids your transaction protection. Making an additional sale doesn't involve eBay but is of course still a taxable transaction even if it is unreasonable for eBay to be involved in reporting it.

Re:I don't see the outrage

[Anonymous Coward]

[citation needed]

No, really, please provide me the information that corroborates your wild accusations. Are there tax loopholes that large corporations are able to step through in order to avoid paying taxes? Sure, but to state that these same corps owe back taxes, and that someone like Warren Buffett owes a trillion in back taxes is just plain, pants on head, count to potato dumb.

So, like I said,

[citation needed]

PS: A decent citation, not some nutjob tinfoil-hat leftist commie hippie crap website that also claims 9/11 was an inside job. Keep links like that to yourself.

Re:I don't see the outrage

[misexistentialist]

Shouldn't they just be auditing the people applying for welfare, rather than tracking the financial activity of the entire financial population?

Re:I don't see the outrage

[Sir_Sri]

Um... If you travel to california you are obliged to pay sales taxes in california. Whether you can vote there is completely irrelevant. Governments have no particular obligation to give anyone representation. Nor does paying taxes give you any guarantee of representation, (ask juveniles or anyone living in Washington D.C. if you're confused by this).

When you were doing business with a UK retailer you tried to scam them out of VAT tax. They *have* to pay VAT taxes on the stuff they bought and they add to the VAT at each step. You can file a claim with the *government* after if you are exempt from VAT, but the retailer is obliged by law to collect it, otherwise it comes out of their pocket. I don't know for sure about the UK but Ireland has some sort of VAT reduction thing for tourists where you can get some of the VAT you paid back.

Also, your one line assertion that 9% taxes are nuts is childishly foolish. Different areas tax in different ways. There's nothing particularly nuts about a 25% sales tax or a 1% sales tax. What matters is total government taxation, and who bears the burden.

VAT by the way isn't sales tax. It seem like it. But it isn't. It's a value added tax. At each step of the production process tax is added based on the value added at that step. Talk about an administrative nightmare. I'm not suggesting it's a good or efficient system (although it certainly has its advantages), but it's not a sales tax.

Re:I don't see the outrage

[Grimbleton]

Oh no, criminals might get caught! What an issue!

Re:I don't see the outrage

[Grishnakh]

I'll reiterate my idea from another post above. If the government wants to do a fishing expedition for ONLY welfare cheats, and we want to keep them from fishing for lots of other info and harassing other people at the same time, it's easy to do. Have Ebay compile a list of records of all the people selling over $10k or $20k or whatever; each record has the person's name, ID number, etc., enough to make them uniquely identifiable. Make a cryptographic hash of every record. Then have the government do the same for all their welfare recipients. Then compare the hashes; this will identify people who are common to both groups; Ebay can then hand over the information for those people, without revealing anything else.

Re:I don't see the outrage

[Dexter Herbivore]

Are you so pro-government that you approve normal citizens doing their (government) job at their (citizens) expense?

It's up to the government to be able to correctly tax their citizens.

Your approach is like "you own me heavy money, unless you take the burden of proving you don't".

Unfortunately in Australia, that's the standard model. The citizen does the paperwork and the government audits at random and/or it warrants an audit.

Re:I don't see the outrage

[Sir_Sri]

Yes, and if you're buying from a UK business it is essentially the same as traveling there, buying the item and flying home. They aren't actually in your living room.

The moment you access their website you stepped into their jurisdiction the in the virtual space, just as setting foot into canada means you set foot in our jurisdiction, just as the moment you cross into another state you are now in their jurisdiction and have to pay their sales tax.

Also, your 'union' doesn't rule the world. Get over it. Governments have no obligation to provide representation, and can tax however the hell they feel like. If you don't like a governments rules, don't live there, don't travel there, and don't do business there. In other words, don't order online from europe because you are supposed to be charged VAT at 20 odd percent.

Do you think the product you were importing from the UK would somehow be exempt from import tariffs because you ordered it from within the US? Because if so you're completely out to lunch.

The only way the UK company could get out of charging you VAT is if there is a free trade agreement with the US (which there is) and they have a US subsidiary, so when you order an item they import it tax free to their US subsidiary, and the US subsidiary actually sells it to you. Then the company takes care of demanding a VAT refund from their own government. If the UK company doesn't have a US subsidiary then you're SOL.

Re:I don't see the outrage

[cpu6502]

I think the government should stop hassling the little people and going after the Megacorps/banks that owe billions or even trillions in backtaxes. (But of course the government never does that, because the politicians are corporatists... bought and paid for. The politicians only go after the citizens, not the real billion-dollar thieves.)

Example: Warren Buffett. He owes over a trillion in taxes over the last decade, but do we see President Obama going after him? No. They act like best friends and Obama praises Buffett for creating the "Buffett rule" to be passed in Congress.

"Sold More Than $20,000 worth" != Made $20,000

[CanHasDIY]

You have to take into consideration overhead costs, product purchases, and other various retail related expenses.

Not that I'm defending the practice, just pointing out facts.

wow, common sense!

[ganjadude]

if you suspect someone, you get a warrant, not a list of XX people who made more than YYY. Why should ebay do the cops job? now remember that ebay is in probably 95% of the countries on the planet. Why should ebay do the polices job in over 200 countries?

Re:wow, common sense!

[Cimexus]

No but Paypal (owned by Ebay and used for most Ebay transactions) IS legally a bank in most countries, including Australia...

Re:wow, common sense!

[Lisias]

Hmm, what are you hiding?

My privacy.

Re:wow, common sense!

[Cryacin]

Your life insurance and TPD company would be most interested!

Re:wow, common sense!

[Dexter Herbivore]

It's incredibly difficult to become a 'bank' in Australia due to the way our laws are structured. Most financial institutions are treated as credit unions or financial services funds.

Income reporting is not violation of privacy.

[140Mandak262Jamuna]

All employers are required to report salaries and bonuses paid to their employees. All businesses are required to submit detailed reports of their sales and maintain documentation for auditing. All wholesales, retailers and everyone is required to maintain clean accounting of their counterparties and submit them while being audited. Just because the commerce happens over the internet does not give you additional rights or additional expectations of privacy.

Get a warrant

[Novogrudok]

My opinion is that anybody who has a turnover of $20K a year on eBay should mention this on their tax returns. If they did not make a profit, chances are they do not have to pay any additional tax (depending on local laws).

However, "pro-active reporting" or policing should not be done by eBay. If the Revenue Office or the police have suspicions about a particular person -- they should get a warrant to get data from eBay, just like Terry O'Gorman says.

Income reporting

[the eric conspiracy]

I don't know what it's like in Oz, but here in the US if you have any sort of income via salary, investments, pensions and yes even selling goods on EBay it gets reported to the IRS on various types of forms generally 1099 or W2 something or another.

One thing to keep in mind is even if the Ebay income is reported on a 1099 to the IRS, that income isn't necessarily profit that you have to pay taxes on. Ebay fees, shipping costs, the costs associated with the acquisition of the items etc all count against the income. And the fact is few people really make any profit on Ebay.

I really don't consider this an unusual invasion of privacy. It part and parcel of the normal invasion of privacy needed to run the system of anal rape known as income tax. Since the US Constitution was amended to enable that many years ago, Congress has the power to write laws to enable it. There isn't much you can do about it except move to someplace that doesn't do that.

Dear Centerlink

[sidevans]

I sell more stuff on gumtree than ebay, and there's no electronic transaction record, and they pay cash, and its free...

Enjoy the red tape shit fight

Regards
A Taxpayer

Seems like a PayPal problem...

[Anonymous Coward]

The problem I think is more with PayPal than eBay, the Australian Taxation Office can look into an Australian bank account at will because it is tied to the Australian Tax File Number (TFN). This is a legal requirement of operating as a bank in Australia. PayPal as far as I am aware does not have an Australian banking license, and hence is not required to bind the TFN to the PayPal account. The .au government just needs to force PayPal to acquire a banking license to operate in Australia. I think that would also give Australian users of PayPal the much needed legal protections that they have with their regular bank accounts.

US started tracking big sellers in 2011

[peter303]

[Internet] companies have to issue a 1099-K for people sell 200 transactions or over $20,000.

Re:Jump on board United States

[Cimexus]

Unfortunately the real cheats will simply open multiple Ebay accounts and make sure they only sell $19,999 or less on each one per financial year ;)

Re:I see no problem with this

[ezweave]

The point is not that they shouldn't pay taxes, the point is that there are already avenues in place to get this information. I think it should be illegal for governments to demand private information from eBay or etsy or the like without having a reason to investigate.

Re:I see no problem with this

[Baloroth]

The government can ask for whatever they like, which is what they are doing. It sounds like it is completely up to Ebay to cooperate or not: they aren't "demanding" the names. If they start forcing Ebay to cooperate, that would be a little different. Also, the fact they are publicizing this is a good thing, rather than simply asking behind the scenes.

Re:Why not provide eBay the addresses?

[SecurityGuy]

Wait, did you really just say that giving eBay, a private multinational company, the names and addresses of Australian welfare recipients doesn't infringe privacy? Imagine you're an Australian welfare recipient who doesn't even use eBay. Do you still think your statement is true?

Non-Australians take note

[Dexter Herbivore]

A quick note for non-Australians, Centrelink is the agency that distributes Australian pensions and unemployment benefits. This has NOTHING to do with tax at this point although I'm sure the ATO (Australian Taxation Office, our IRS) will get interested if Centrelink catches any welfare cheats.

Re:Why not provide eBay the addresses?

[Barny]

Applying for welfare, you give Centerlink permission to do such checks.

As someone on a disability pension, I would like to cheer Centerlink on in this case, the more arseholes who are cheating the system that get caught, the more they can spare for everyone else.