Topic: IRS wants to tax online sales.

[Pugnate]

http://www.cdt.org/publications/policyposts/2007/7

http://www.dailytech.com/article.aspx?newsid=7191

Millions of users from eBay and other sale sites could soon be required to file reports with the IRS for personal sales

A quick search for the latest gadgets on eBay can quickly reveal that there are literally millions of users selling and buying stuff on a daily basis. May of eBay's users are simply people at home who sell their belongings or other things for cash. A camera, a CD, clothes -- just about anything. For the most part, many people can make a moderate and even lucrative side income from selling products on eBay.

All this is about to change for millions of eBay users according to a report on a proposal being drafted by the U.S. Treasury Department. The IRS now wants a cut out of sales that occur on eBay and other popular user-to-user sale sites such as Craigslist. A proposal is being drafted that will require all major market sites to store, track and send user information to the IRS. This information includes transaction details and other personal information.

The Center for Democracy and Technology (CDT) reports that the new IRS proposal is all part of President Bush's 2008 budget proposal. The intention is for the IRS to track down small business income that is generated from the sale of personal property. If you make more than $5000 USD per year on 100 or more sales online, you may soon be forced to file income statements with the IRS. This means that users of sites such as eBay, Craigstlist and Amazon.com will be required to fill in more personal information as well as social security numbers.

Demanding that sites such as eBay request more personal information from users is already looked upon as a bad thing according to the CDT. Many Internet users are already up in arms over privacy concerns. Identity theft and other unfortunate situations can occur from storing user information online. Since the beginning, eBay users have experienced account hijacking and other malicious attacks, so storing information such as a social security number will become a big concern for many.

According to the Treasury Department, Americans owe it billions of dollars and this would be a legitimate move into getting some of that lost revenue. But the CDT indicates that the Treasury Department has not yet convinced Congress that this proposal is necessary.

CDT deputy director Ari Schwartz indicated that collecting personal information such as social security numbers is a big no-no for end-user security. "Such data retention proposals would force the creation of massive, privately maintained databases of personally identifiable data that government investigators could tap at their leisure," said Schwartz. "Sites that currently ask consumers for their [social security numbers} are very likely to be related to illegal 'phishing scams," added Schwartz.

The IRS claims that such a move is a necessity due to the "explosive" growth of the Internet. "One of the more popular business opportunities is the selling of new and used items through online auction sites such as eBay, Ubid, etc.," noted the IRS report.

So basically if you sell $5000 worth of personal stuff on the net in a year, they want to tax you? That's bullshit. Hopefully this will never get passed, but it seems the Bush government would love for it to happen. They people they want to go after aren't the upper class of America, but middle America that use online sales to supplement their income.

Plus they want to store all sorts of personal data online. Again, with all the 'phishing' and 'duping' going on, this will just make everything 10x worse. Scammers must be licking their lips. 

[angrykeebler]

the IRS should tax you for being so stupid! ooo burn

[Cobra951]

"Income from whatever source derived".  As ridiculously complex as the income tax code is, the definition of its base is that amazingly simple.  Are all eBay sales tax free right now?  If you're selling a personal item, which you bought and were already taxed on, then no, you shouldn't have to pay tax on it again.  But if you buy and resell stuff on eBay for a living, it's income.  Do resale businesses based on eBay pay income tax now?  That's a real question.  I guess actually reading what you linked might help.  (Sorry I haven't before sounding off.)

[gpw11]

A little off topic here, but the legislature in BC just voted themselves a new raise.  Fair enough, we all think we should be paid more, but the new raise puts their salary at over a hundred thousand a year.  Once again, that's fine...people who do less work get paid that or more in the right industry, but shouldn't the elected body who's purpose it is to legislate with the ideals and interests of the average person in mind get paid the average salary (about $35,000)?  Wouldn't it be far easier to say "you know, we need to figure some way to reduce the cost of living" if these people had problems paying their rent and eating at the same time as well?  Maybe, just maybe if that was the case there wouldn't be so much goddamn sales tax on everything.

[Quemaqua]

I'm sort of with Cobra.  I mean, if you move a significant amount of your business from brick and mortar to online, those taxes that the government was getting just vanish.  I imagine they're just trying to compensate for the increasing business done online now.  I agree that they shouldn't get shit in the way of data.  I believe in giving the government as little control over the internet as possible.  However, it's a little hard to argue the sales tax thing.

[scottws]

Well sales tax isn't a federal thing; it's a state thing.  Part of Ohio's tax return asks you how much in untaxed goods you purchased online, so that they can add that uncollected sales tax to your total state tax so that you pay more or get a smaller return.  Of course I bought $0 of goods online, as I imagine most Ohioans did (*snicker*).

But I think what Cobra is talking about isn't the sales tax, but rather income tax from selling something online.

[Quemaqua]

Well, yes.  I said sales tax but I actually meant income.  Hence the brick and mortar comment.

[Xessive]

Wow.. I count my blessings for living in a tax-free country! We always thought taxes were some myth in England, more specifically in Nottingham.. Robin Hood etc. Then I went to Canada..