Ebay and our friend, the IRS

RickM · RickM's Garage

I'm surprised it hasn't come up until now....at least in a News story kind of way.

I was under the impression that ANY income from sales was taxable. In this article they make a distinction between income from a hobby and from running a business. Not as clear cut as I thought. How long before the IRS audits you over those headers you sold?

The article doesn't address the tax that should be paid by the purchasers as well. AFAIK if you're not charged sales tax then you're supposed to pay a Use tax.

It's only a matter of time before this huge revenue stream is tapped into by the goverment. Who says the internet isn't like the wild west.

http://story.news.yahoo.com/news?tmpl=story&cid=528&ncid=528&e=2&u=/ap/20050328/ap_on_go_ot/taxes_online_auctions

Joeaksa · 03-28-2005, 01:18 PM

It would not be that hard to configure "Carnivore" to monitor this and report it to various agencies, the IRS among them.

Just what we need... More Govt in our lives...

Joe

widebody911 · widebody911's Garage

Ebay has previously stated they'll work with gov' agencies for various reasons, including LE and tax stuff. I wouldn't be surprised if some time in the future you get a 1099 from ebay each year.

jrdavid68 · 03-28-2005, 01:45 PM

As for the headers you sold, if you bought them new and then sold them on eBay for less, you didn't make a profit - no tax issue. Seems to me that this would now open up a new way to report losses.

speeder · speeder's Garage

I would think that the manpower necessary to police individual ebay sellers would be way beyond what is available to the IRS, but I could be wrong.

Especially when you consider that 98% of ebayers are people who are not in it for a business, but just selling their used *****e.

I wouldn't mind seeing certain early 911 "flippers" get reamed up the ass by the tax goons, though.

kumma · 03-28-2005, 02:32 PM

A majority of crap I sell on ebay is sold at less than actual cost or value. Pretty hard to tax "profit" on stuff like that. If it is profitable for you to sell on ebay just set up an llc and write off all those expenses you havent been keeping track of. All in all it seems like a non issue but it makes sense when you see its goverment pushing this idea.

widebody911 · widebody911's Garage

Quote:

Originally posted by speeder
I would think that the manpower necessary to police individual ebay sellers would be way beyond what is available to the IRS, but I could be wrong.

I'll bet they do the other way around; ebay would get a tax break to give up the data.

island911 · 03-28-2005, 02:35 PM

Quote:

Originally posted by speeder
I would think that the manpower necessary to police individual ebay sellers. . .

yeah, though thats not the way the IRS works. They simply cherry-pick a good example, or 12, to be unduely harsh with.

I would be surpised if they DIDN'T set some examples.

We wouldn't want any free-flowing E-commerce; now would we?