It's that time again for the latest "IRS will go after eBay sellers" scare

dude · April 25, 2007 3:48AM

I don't know. This time it may happen.

Linkarooski

clayshooter22 · April 25, 2007 3:56AM

I signed up for ebay so long ago.....I don't remember....Did we have to give a social security number to eBay in order to participate? I don't think I did and if I didn't they wouldn't be able to track my sales until I did give them the info making it next to impossible to force a tax payment on past sales....just ask the internet gambling people about this!!!

I believe the IRS wants to collect and I can see how eBay would want to keep up and running but I can't imagine that eBay welcomes tracking cost basis on eBay purchases and sales or even has this capability.

If they did....I could come up with thousands in losses on 90's wax I ripped, so maybe it'd be a good deal for me too.

cravetopps · April 25, 2007 4:38AM

The IRS can't even figure out your cap gains much less your net profit from ebay auctions unless they do an audit. But, I would envision ebay having to report total sales to the IRS - sort of like a 1099. They still would have to figure out your cost basis and that would not be a trivial undertaking. My quess is most people would figure out a way to jack up their cost basis and show a paper loss pretty easily. I think it's the big sellers who might have to worry but maybe many of them report income already. I know some sellers require sales tax so one would assume they are at least paying sales taxes.

storm888 · April 25, 2007 5:22AM

Under the currently contemplated scheme, EBAY would
simply report gross-sales to the Service.

Sellers who could not prove their cost-basis in the sold
items, would be hit hard.

MANY card sellers have been losing money on EBAY for
a VERY long time; such loses will increase this year and
next.

jradke4 · April 25, 2007 5:25AM

just think how much sales 4sharp, dsl etc do. i am sure the irs would like to know. on the other hand they probably dont care to much about someone like me that sells something maybe twice a year.

dude · April 25, 2007 5:44AM

<<The IRS can't even figure out your cap gains much less your net profit from ebay auctions unless they do an audit. But, I would envision ebay having to report total sales to the IRS - sort of like a 1099. They still would have to figure out your cost basis and that would not be a trivial undertaking. My quess is most people would figure out a way to jack up their cost basis and show a paper loss pretty easily. I think it's the big sellers who might have to worry but maybe many of them report income already. >>

Indubitably this is the crux of it. Seller's monthly eBay invoices show final sales prices so that data is easily attainable. It still comes down to the same charade every self-employed person goes through with inflated writeoffs and so forth.

<<I know some sellers require sales tax so one would assume they are at least paying sales taxes. >>

That would be a state tax.

goose3 · April 25, 2007 5:54AM

I can't imagine Ebay being too crazy about this either.

Many will pack up their bags and sell via other avenues.

onefasttalon · April 25, 2007 6:27AM

I know some sellers require sales tax so one would assume they are at least paying sales taxes.

Well... if you believe that... then I have some land for sale! I know too many people that charge/collect sales tax on Ebay and just pocket the extra $$.
I can't STAND that! People collecting sales tax on Ebay isn't helping us out!

Like a lot of you, I sell on Ebay too... weekly! I'm not breaking the banks, 10 items one week, 40 the next... nothing too pricey, but I'd hate to get a bill in the mail (let's face it, that's what it would be) for a % of what I sold for the entire year! YIKES!

If, one day, we are forced to pay taxes for what we sell on Ebay... Ebay WILL die VERY shortly thereafter.

larryallen73 · April 25, 2007 6:29AM

If I were a seller I would be much more worried about the state coming after sales tax than I would the IRS. Just about EVERY small time seller of collectibles would show "losses" so no net income tax would be due to the IRS. Sales tax, however, does not matter if gain or loss. Officially ALL SALES are to be taxed. In California they are serious about it too!

cravetopps · April 25, 2007 7:00AM

<<<If I were a seller I would be much more worried about the state coming after sales tax than I would the IRS. Just about EVERY small time seller of collectibles would show "losses" so no net income tax would be due to the IRS. Sales tax, however, does not matter if gain or loss. Officially ALL SALES are to be taxed. In California they are serious about it too!>>>

I agree. The sales tax would be much more problematic.

bigjed · April 25, 2007 7:22AM

<< <i>If I were a seller I would be much more worried about the state coming after sales tax than I would the IRS. Just about EVERY small time seller of collectibles would show "losses" so no net income tax would be due to the IRS. Sales tax, however, does not matter if gain or loss. Officially ALL SALES are to be taxed. In California they are serious about it too! >>

Sales tax law is extremely complicated but in a nutshell for most people sales tax only applies to sales that are made within your own state. For example, California does not have the authority to collect sales tax on a sale you made to someone in Texas.

ArchStanton · April 25, 2007 7:40AM

Let's see...so far this year, I've spent about $2K on Topps Heritage. I've sold about $100 worth on ebay, and I have less than $1000 worth of cards left. Does the IRS owe me any money?

jmbkb4 · April 25, 2007 9:16AM

I'm very paranoid by nature, so I just reported my eBay income to my accountant.

jayhawke · April 27, 2007 7:56AM

Just wait until the auction houses have to issue 1099's. People will flee them too, and the auction houses will finally have to earn their commission. Sounds like a realtor in this tough market.

MooseDog · April 27, 2007 8:46AM

<< <i>Let's see...so far this year, I've spent about $2K on Topps Heritage. I've sold about $100 worth on ebay, and I have less than $1000 worth of cards left. Does the IRS owe me any money? >>

They could end up owing you money if you paid other taxes...all the more reason to set up a simple business, run it like a business...and use the business as a legitimate tax deduction on any other income you have.

I'll simplify the example above but let's say you bought $2K of Heritage with the idea that you would be able to sell the cards at a profit. You sold $100 and still have $1000 in inventory left. Assuming that was it for the year you lost $900. For a sole proprietorship (the most simple form of business) you fill out Schedule C and you have -900 which comes off any income on the front page of your Form 1040.

Every person in the US should have a "side business". There are lots of LEGITIMATE ways to minimize you tax bite. All the IRS wants to see is an attempt to make a profit and for you to actually show a profit 2 of 5 years. I have had small (very small) businesses for 30 years, file my own taxes and have never been called for an audit. I don't cheat but I take a very aggressive (again LEGAL) approach to deductions too.

eBay is not going away, and neither is the IRS. Learn the rules, play by the rules, and you can make the system work FOR you, not AGAINST you.

jskirwin · April 27, 2007 10:22AM

<< <i>Under the currently contemplated scheme, EBAY would
simply report gross-sales to the Service.

>>

The IRS uses SSN to tie their data together.
Ebay doesn't have that info, so how would they report?

ArchStanton · April 27, 2007 12:42PM

actually show a profit 2 of 5 years

That's never gonna happen with me.

It's that time again for the latest &quot;IRS will go after eBay sellers&quot; scare

Comments

It's that time again for the latest "IRS will go after eBay sellers" scare