IRS to Track Online Sellers' Payment Transactions Beginning Next Year

[PromiseLandAkitas]

http://www.auctionbytes.com/cab/abu/y210/m03/abu0258/s03

Internet sellers who don't report their sales will no longer be under the radar. Starting next year, any bank or other payment settlement company that processes credit cards, debit cards, and electronic payments such as PayPal will have to issue information returns telling the IRS what merchants receive. The new returns are Form 1099-K, Merchant Card and Third-Party Payments.


Big brother is getting bigger

[hillwalker]

I've always wondered about this:

So, I buy some gizmo, use it, turn around and sell it,
All of a sudden it's income? On what planet? how in the hell
is this true?

So, I buy a car, use it for 10 years, sell it for 1/10th of what I paid,
do I get to declare a loss?

Didn't think so.

[JurisDoctorOfDoom]

I've always wondered about this:

So, I buy some gizmo, use it, turn around and sell it,
All of a sudden it's income? On what planet? how in the hell
is this true?

So, I buy a car, use it for 10 years, sell it for 1/10th of what I paid,
do I get to declare a loss?

Didn't think so.

If you bought if for say a $100, sold it for $50, you would have lost money. Don't know what the deal with reporting will be but you will have lost money so you wouldn't owe any tax on the $50.

Now what if it was a gift somebody gave you? Like a $200 bike that you try to sell for $100? Would you have to pay tax, I don't know.

[annapurna]

I saw this on an eBay discussion group and I believe you only have to report it if you gross over $20,000 per year - hope that is correct.

[Fineco]

Me, too.  Selling  on ebay is a life-saver for me - spplements my tiny SS check.   But I willgo and read the ebay chat. Thanks for the heads-up!

[pamela]

damn it!
I hope you're right about the 20k amount.
will have to check into this ASAP!

[Zac]

I saw this on an eBay discussion group and I believe you only have to report it if you gross over $20,000 per year - hope that is correct.

I doubt this is correct.  1099 reporting requirements for independent contractors is $600 per year.  (the law requires a 1099 to be filed if you pay someone else more than $600 for goods or services in a year, with exceptions for corporations)

[Jeffrey]

Whether it's the "New" Health Care program, or IRS tracking Paypal, it's all about one thing and one thing alone...GOVERNMENT CONTROL. Or better yet, Corporate control. It's is "their" intention of "watching," "tasting", "smelling", "hearing" and "feeling" your every move. "They" want you to be a productive slave supporting their system. On every level this is happening. Look at the UK. When enough people scream "Stop" then we may turn this trend around, but we are far, I repeat FAR, FAR, FAR away from that turing point. Why? Because FEAR has the masses in it's grip.

It's a Scam, their system...wake up!

Begin by not supporting their corrupt system scam on April 15. That is where we start. On April 15 the FEAR based machine can be damaged. Only if enough are willing have some balls to make a stand.

[Ellie]

The new reporting requirements are as follows: If you have $20,000 AND 200 transactions per year through Paypal, you will be reported to the IRS starting with tax year 2011. If you refuse to give Paypal your SSN or your EIN so that they can accomplish the required reporting, you will be subject to back-up withholding, with Paypal essentially freezing something like 28% of your proceeds.

Paypal has a blog that is a good source for news on this. Here's a link to one of the earlier entries on the subject:

https://www.thepaypalblog.com/2008/08/proposed-irs-reporting-requirements-become-law/

[Tinfoil Hattie]

.

[ReddDogg]

#1)  You are required to report your income, no matter how big or small, from anywhere, to the IRS every year.  (Granted, if nobody else tells the IRS, it is very common for a person to decide to tell the IRS on their own, but that is it's own discussion)

#2)  If you are audited, and I mean full on audited, every friggin penny you brought in from anywhere will be scrutinized, regardless of whether Paypal informs the IRS of your incoming money or not.  This rule is designed to give the IRS more information, allowing them to flag you for audit much easier if you are not reporting any ebay income but you are receiving $20k

#3)  If you sell stuff on Ebay, you get to subtract the cost of when you bought the item from your auction.  So if you are selling your old laptop that you paid $1,000 for 3 years ago, and you are getting $200 on ebay, you didn't make any money, so you don't have to claim it as income.  This would be true if you sold 200 items like this for a combined $20k or more.

Let's say instead you make wood carvings.  If the carving costs you $50 in supplies and such, and you sell it for $200, you have to report $150 as income.  If you don't sell $20k worth of stuff via ebay and at least 200 separate items, the IRS won't be made aware of your activity, even if you are making big bucks selling these wood carvings.

All things considered, this seems like a pretty good rule to put in place, unless you are anti-tax, anti-government service.  Basically, if you think the government should be providing your healthcare, you should be all for the government collecting taxes in this manner.

[powerDown]

So are they going to flag people for audits if, for example, income from 2007,2008, and 2009 sales was not declared?

Some e-bay sellers have been there 10-plus years, I think.

Ka- chiinggg!

[TheDignityofStruggle]

I have officially decided that I am not giving them any more money. 

[powerDown]

The IRS? You are a brave soul, Dig! Seriously though, it's all on computers. E-bay has no choice but to provide all details to .gov.
Ever buy bullion on e-bay? Guess what you are on the list. I'm sure some list of people who buy camping/ doomer supplies will be compiled as well.

[Tinfoil Hattie]

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