IRS May Ask eBay To Snitch On Sellers 418
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."
Re:+ tax (Score:5, Informative)
Reporting of this income might also lead to sales tax as well, but that is collected by the state, not the IRS. In addition, this is the responsible of the buyer to pay, not the seller, unless the buyer and seller are in the same state.
Dislaimer: I'm not a tax expert, but I play one when I talk to my friends into letting me do their taxes.
Re:+ tax (Score:5, Informative)
Signed,
Guy who actually did pay taxes on his web-based small business this year
Re:So.... (Score:1, Informative)
Re:Cool as long as Europeans stop getting (Score:4, Informative)
Hell, I live in Michigan and even I don't have to pay state sales taxes.
If someone is charging a european a US State sales tax on a mail ordered item, they are pocketing the money. That makes them a reseller of questionable moral character.
Re:Is there some law? (Score:5, Informative)
Re:It's really simple..... (Score:1, Informative)
If the IRS tries to tax eBay transactions, people will just move to craigslist...or go back to yard sales.
Re:+ tax (Score:3, Informative)
Buyers and ellers on craigslist complete their sales in person, and in private, thus avoiding damning evidence.
Re:Fair Tax = Screw the middle class (Score:1, Informative)
And anyone who has actually read up on the proposed "Fair Tax" laws/reforms and has critical thinking skills knows that your above argument is bullshit.
You don't get rich and stay rich by simply not spending part of your money. Most rich people cycle through most of their money regularly...you know, paying employees, buying and selling property, paying for components that go into consumer goods that they sell, investing in new technologies, funding start-ups that either fail or make you even richer after a few years...the same old "spending money to make money" routine.
Add to that the money saved by getting rid of unnecessary federal institutions if a "Fair Tax" is ever passed.
I wish people would actually think this through instead of knee-jerking every time it's brought up.
It depends. (Score:3, Informative)
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.
Re:Cool (Score:3, Informative)
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.