TulipTools Internet Business Owners and Online Sellers Community

Quote:Attention online auction sellers: An IRS advisory committee wants you — to pay federal income taxes on your profits.

Anyone who sells goods online should first be required by law to submit a federal tax identification number, a change that would enable the IRS to track the transactions and seek any taxes owed, the committee recommended in a new report to the federal tax-collection agency. The recommendation is similar to an enforcement option raised in August by the staff of the congressional Joint Committee on Taxation.

The IRS advisory panel of tax specialists, citing the rapid growth of Americans selling via eBay, uBid and other online sites, said it's likely that "a significant number of those users either choose to ignore income reporting requirements or are unaware of their obligations."...

full article: http://www.usatoday.com/money/perfi/taxe...usat_x.htm

Come and get me, G-Man!!!!

Auctionbytes on the proposal to require tax IDs:

Quote:Will this turn off sellers who don't want to give their tax ID numbers to online marketplaces? If so, will this hurt marketplaces and give consumers less of a selection of goods? Might it help larger professional sellers (whose tax ID is often different from their social security number) by weeding out more casual sellers?

Will individuals (as opposed to business sellers) give marketplaces like eBay their social security number, and if so, can marketplaces assure that those numbers are kept safe from hackers and scammers? Might we see a slew of new phishing email scams that trick sellers into revealing their social security numbers?...

full article: http://auctionbytes.com/cab/abn/y06/m11/i21/s02

Quote:Will individuals (as opposed to business sellers) give marketplaces like eBay their social security number, and if so, can marketplaces assure that those numbers are kept safe from hackers and scammers?

A better question is will people be dumb enough to give their social security numbers to sites like Wagglepop that hide their ownership, or to the countless small auction sites started by "powersellers" who don't know the first thing about web server security?  I sure wouldn't.

That's why god made tax ID numbers - although I'm not sure I'd trust WP even with that. 

I'd post my SSN HERE before I'd give it to eBay. 

A related article:

Quote:When it comes to paying income taxes, eBay's legions of small-time entrepreneurs are on an honor system in which they are supposed to declare their profits to the Internal Revenue Service. Many users, however, ignore the law or are unaware of their obligation.

Now a growing chorus of tax experts is hoping to crack down on the cheating by requiring eBay -- and other online auctions, such as those on Yahoo, Ubid.com and Amazon -- to track users and report their gross sales to the federal government. Armed with such information, the IRS could better seek any taxes owed, potentially reaping millions of dollars in extra revenue for the U.S. Treasury.

But requiring eBay to out its sellers to tax collectors could send a shockwave across its vast online bazaar, where users trade everything from Ferraris to Ugg boots to pepper spray. Paying Uncle Sam could significantly reduce their profits or even make their businesses money-losers...

full article: http://sfgate.com/cgi-bin/article.cgi?fi...OAK5C1.DTL

more, more, more...

Quote:The government believes that tougher enforcement of the rules could net as much as $2 billion a year, which isn't chump change, even to the Feds.

eBay is resisting calls for it to file any documents, saying that it does not fit the definition of a broker, and that to selectively target it puts the company at a competitive disadvantage. eBay apparently believes that sellers would go elsewhere if they knew that the government would learn how much they made in a given year...

full article: http://arstechnica.com/news.ars/post/20070225-8919.html

Quote:Representative Rick Boucher, who has received campaign donations from eBay, said he had been contacted by the company and shares its view that the Treasury and IRS would be stretching the limits of their authority by extending rules that cover “brokers” to the website.

The online auction group argues it is not a “broker”, or a “middle man” or an “auctioneer” or an “auction house”. So what is it then? It offers an “auction-style” service but is more “like a shopping mall,” a spokesperson says.

In turn, the company argues that the Treasury’s plan would be unfair because it regulates in such a way that exempts competitors like Craigslist that have different business models based on plain classified ads without the auction or payment tools of eBay...

full article: http://www.ft.com/cms/s/657692b0-c03e-11...10621.html

Quote:Americans who sell items through Internet auction sites could be in for an unpleasant surprise at tax time next year, thanks to an IRS proposal designed to identify taxpayers who don't report income from those sales.

The U.S. Treasury Department wants Congress to force auction sites like eBay, Amazon.com and uBid.com to turn over the identities and Social Security numbers of a large portion of their users to the IRS--so tax collectors know how much each person made through online selling...

...the proposal is likely to encounter stiff opposition from Internet auction aficionados, free-market advocates and the auction Web sites themselves, not all of which are large enough to be able to comply with the rules without financial hardship...

full article: http://news.com.com/2100-1028_3-6176041.html?part=rss&tag=2547-1_3-0-20&subj=news

Quote:Americans who sell items through Internet auction sites could be in for an unpleasant surprise at tax time next year, thanks to an IRS proposal designed to identify taxpayers who don't report income from those sales.

If they're stupid enough not to report their income