IRS Leans On Auction Sites to Spill Customer Information

http://www.eweek.com/article2/0,1895,2128629,00.asp?kc=EWEWEMNL051107EP41A

IRS Leans On Auction Sites to Spill Customer Information
By Lisa Vaas
May 10, 2007

2 comments posted
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Would you trust eBay to keep your name, address and taxpayer identification number safe? What about uBid.com, or what about an obscure online broker you've never heard of?

The Center for Democracy and Technology is raising a red flag over the prospect after language appeared in the President Bush's budget that would require brokers of personal property—including online auction houses and consignment stores—to collect personal data from customers and to share it with the Internal Revenue Service.

The push to put personal customer information into the hands of the Feds is coming from the U.S. Treasury Department, which is attempting to track down millions in unreported small business income. There's serious money at stake: The Treasury Department's proposal in the president's budget estimates that it could raise $20 million in 2008, increasing steadily over the years to hit a cumulative $1.974 billion by 2017.

Nobody's defending the rights of tax scofflaws, but privacy groups see a range of negatives that the legislation could bring about, from potentially increasing loss or theft of personal data, to spawning a new breed of phishing scams, to indulging the government in its quest to hold more sway over information collected easily online.

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Going after the rich who squirrel billions offshore is hard. Ghod forbid they take a look at hedge funds.

How about the kids' lemonade stands?

you bought the items you are selling with income you already paid taxes on. Also, the items sold in garage sales are sold at a loss to what the original price paid was. When are we, as Americans, going to say enough is enough.

Evidently it would be better if we all threw our unused stuff into a landfill somewhere. The vast majority of Ebayers are just regular folks trying to unload crap they don't need. We're not making any profits, we're just recouping a bit of our losses. How on earth can anyone say it's fair to tax that? It's NOT INCOME. :nuke:

But then, we're not wealthy.

Everything I've ever bought on Ebay has come from somebody
who was obviously in business to make money and the stuff
they were selling was the same sort of stuff they'd be selling
next week and next month and next year. And there's
absolutely no reason why the IRS shouldn't be able to tax
these businesses (which are probably running 100% "off
the books").

My small business pays its taxes; so should people running
their multi-hundred-thousand dollar businesses via Ebay.

Tesha

I have a friend who occasionally sells on Ebay. It is not a business for her. A couple of times a year, she sells something, like she might at a garage sale. That should not be taxed in my opinion.

> That should not be taxed in my opinion.

And she wouldn't be taxed. Where in the tax code does *ANYONE*
get taxed for true "garage-sale" type activity?

But I don't believe that that model represents a huge portion of
the business transacted on Ebay. A huge portion of it is people
who are clearly in business and ought to be declaring all of
their operations on Schedule C.

Tesha

Have businesses now become the bulk of ebay sales? I'm thinking of the people I know who sell and buy on ebay, selling used stuff that we don't want or need any more. I don't understand where the income comes in -- I pay income tax on the money I use to buy the stuff, I pay sales tax on the stuff, then when it's no longer of use to me I sell it on ebay for a fraction of its original value and they want me to pay tax on that? Where does the income come into this picture?

Maybe I'm missing out on something -- are there companies that are buying and selling new things for a profit and not paying tax on that the way they would if they had a storefront? That does seem like a tax evasion but for the normal person who is selling on Ebay it's nothing more than a computer aged rummage sale.

When a seller has 42 different simultaneous auctions for, say,
"clock parts", and has several years worth of recommendations
as a quality seller of clock parts, it's a good bet they're not just
cleaning out the basement or selling their grandfather's
clock that was "too large for the shelf".

For these folks, Ebay works just like any other marketplace:
Buy low, sell high, and, if possible, don't declare your profits
'cause only fools pay taxes. It's the Republicon way!

Tesha

the corporate tax scoff-laws? How much if they closed tax loopholes used by the corporations whose CPAs wiggle through them saving them from their "tax burden"?

When does our government enforce the laws on those in the upper-tiers of our pyramid?