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The Almighty Buck Government News

IRS Wants a Cut of Sales On eBay and Craigslist 517

Posted by Soulskill
from the piece-of-the-action dept.
Ponca City, We love you writes "In 2009, $60 billion worth of items were sold on eBay, meaning 'extra' money for many sellers, whose activities may provide them with taxable income. Now the Washington Post reports that beginning next year, a new law will require 'the gross amount of payment card and third-party network transactions to be reported annually to participating merchants and the IRS.' Also, for 2011 tax returns, 'taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions' will receive a new IRS form, known as 1099-K, for reporting the proceeds. The new tax issues shouldn't be a concern for people who sell just a few small items online for less than they paid for them, because as the IRS points out, income from auctions that resemble a garage or yard sale 'generally' isn't required to be reported. But if an online garage sale turns into a business with recurring sales and purchases of items for resale, it may be considered an online auction business. 'Generally, transactions resulting in a gain are reportable, regardless of whether the taxpayer is conducting a business,' says Gil Charney, principal tax researcher at The Tax Institute at H&R Block. The real reason behind the law is simple: Research shows taxpayers do a much better job of reporting taxable income when they know the IRS is receiving information about their transactions."
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IRS Wants a Cut of Sales On eBay and Craigslist

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  • How's this news? (Score:5, Insightful)

    by Dyinobal (1427207) on Sunday May 30, 2010 @12:56PM (#32397934)
    How exactly is this news? Governments have wanted to tax everything since well since they were established it's what they do.
    • Death and Taxes (Score:4, Insightful)

      by loose electron (699583) on Sunday May 30, 2010 @01:03PM (#32398002) Homepage

      The Works of Benjamin Franklin, 1817:

              "'In this world nothing can be said to be certain, except death and taxes."

      I see how this could be tracked on EBay - especially "Power Sellers" with 1000's of transactions.
      But on CL? that's going to be interesting to see happen.

    • Well for starters (Score:4, Interesting)

      by goombah99 (560566) on Sunday May 30, 2010 @01:06PM (#32398054)

      it means that they will have to collect your Taxpayer ID number and then validate it.

      so no illegal alliens can use E-bay.

      Since they will be reporting SSNs to the IRS it will also be interesting if the law enforcement agencies sniff this for fugitives. Supposedly SSNs are not supposed to get used for law enforcement but they are.

      I wonder how they will deal with people who claim not to be US citizens.

      • Re:Well for starters (Score:5, Informative)

        by LynnwoodRooster (966895) on Sunday May 30, 2010 @01:16PM (#32398142) Journal

        it means that they will have to collect your Taxpayer ID number and then validate it.

        so no illegal alliens can use E-bay.

        Perhaps you weren't aware that illegal aliens can get a ITIN (Individual Taxpayer Identification Number) [irs.gov] from the IRS, and can actually report and file 1040s every year with that same TIN. Even when here illegally (thus making their entire income illegal).

        The IRS doesn't care as long as you pay taxes, unless they feel you didn't pay enough, then it's up to you to prove you paid enough not up to the IRS to prove you didn't.

        • Re:Well for starters (Score:4, Informative)

          by TheRaven64 (641858) on Sunday May 30, 2010 @01:31PM (#32398276) Journal
          It's also worth noting that the IRS is prohibited by law from sharing information with other government departments, so illegal immigrants can pay taxes, even admitting to being illegal on their tax return, without fear that this information will be shared with the immigration department. Apparently getting money from people is more important than enforcing laws.
          • Re:Well for starters (Score:4, Interesting)

            by blantonl (784786) on Sunday May 30, 2010 @01:47PM (#32398418) Homepage

            's also worth noting that the IRS is prohibited by law from sharing information with other government departments,

            Really? That is interesting... because the FBI needed to get ahold of me about an issue with my business, and they contacted my [b]accountant[/b] first.... presumably through my corporate tax returns. Why/how else would they have contacted my accountant?

            • Re:Well for starters (Score:5, Informative)

              by Anonymous Coward on Sunday May 30, 2010 @02:17PM (#32398692)

              IRS can't share the information with other agencies on its own, but other agencies can request the said information. You know, the FBI can subpena your tax return and IRS will have to give it to them. What IRS can't do, is take your tax return and share it with other agencies without such a subpena.

          • by causality (777677)

            Apparently getting money from people is more important than enforcing laws.

            Only when officials have to make a choice between them.

            When they can, they avoid making such a choice. For example, speeding tickets. There they get to enforce the law while also making money.

          • Re:Well for starters (Score:4, Interesting)

            by peragrin (659227) on Sunday May 30, 2010 @02:00PM (#32398506)

            I suggest you read the history of Al capone. He was never tried for killing anyone. Instead he went to jail for not paying taxes on his speakeasies, and illegal liqueur sales.

            I don't know why people fail to understand history the implications it has across time. I am personally waiting for the IRS to start cracking down on drug dealers. there are billions in taxes that are waiting to be collected.

            • Re: (Score:3, Informative)

              by John Hasler (414242)

              > I am personally waiting for the IRS to start cracking down on drug dealers.
              > there are billions in taxes that are waiting to be collected.

              "Taxes"? They don't need no stinkin' taxes. If you get busted for drug dealing they will take all of your money.

          • by corbettw (214229) <corbettw AT yahoo DOT com> on Sunday May 30, 2010 @02:47PM (#32398984) Journal

            Entering or remaining in the country without authorization is a civil infraction; dodging your taxes is a felony. One is slightly more serious than the other.

          • Re: (Score:3, Interesting)

            by shentino (1139071)

            As disclosed on the tax return's OMB disclosure, they can disclose it for the purpose of "enforcing federal non-tax laws"

          • by mcgrew (92797) *

            Apparently getting money from people is more important than enforcing laws

            But that IS the law. What's more important, catching a low level dope dealer or buying body armor for soldiers? Catching hookers or funding highways? Catching gamblers or funding NASA?

        • Re: (Score:3, Informative)

          by John Hasler (414242)

          > ...then it's up to you to prove you paid enough not up to the IRS to prove
          > you didn't.

          That isn't true.

          • by LynnwoodRooster (966895) on Sunday May 30, 2010 @02:29PM (#32398810) Journal
            Sorry, but it is. I've dealt with it 3 times in the past, where I was threatened with liens and levies unless I could prove that I was correct. As far as the IRS was concerned, I did not properly report my LLC income (even though it had been legally shut down the year prior to the year in contention) and I had 30 days to respond or face levies. Even had an IRS Revenue Officer tell me, my lawyer, and and my CPA straight out that just because we had copies of my tax returns for the proper year, and just because we had a certified return receipt for the timely filing of that tax return it did not mean we actually mailed it; we could have mailed ANYTHING to them.

            .
            With the IRS, you are guilty until proven innocent. The burden of proof is on you to show the IRS is in error, not the other way around.

      • Re: (Score:2, Insightful)

        by causality (777677)

        it means that they will have to collect your Taxpayer ID number and then validate it.

        so no illegal alliens can use E-bay.

        Since they will be reporting SSNs to the IRS it will also be interesting if the law enforcement agencies sniff this for fugitives. Supposedly SSNs are not supposed to get used for law enforcement but they are.

        I wonder how they will deal with people who claim not to be US citizens.

        How to solve all of these problems in one fell swoop: dispose of the income tax, disband the IRS, eliminate the ridiculously lenghty income tax code, and replace all of them with the Fair Tax. A national sales tax (NOT the same as a VAT) has none of these problems, carries no need to track income, is much more difficult to cheat, is paid by foreign nationals who visit this country including illegals, is paid by people who deal drugs and other contraband not currently tracked by the IRS, and has a much lowe

        • Re: (Score:3, Interesting)

          by kcitren (72383)
          And this tax is tracked how online? On ebay, for example, is ebay required to collect this tax? or the seller? or does the buyer just record all their purchases and pay up at the end of the year? I'm all for a national sales tax, but it still requires tracking of individuals.
          • Re:Well for starters (Score:5, Interesting)

            by causality (777677) on Sunday May 30, 2010 @03:11PM (#32399206)

            And this tax is tracked how online? On ebay, for example, is ebay required to collect this tax? or the seller? or does the buyer just record all their purchases and pay up at the end of the year? I'm all for a national sales tax, but it still requires tracking of individuals.

            No, it requires tracking of businesses and merchants. Ever buy groceries at (say) a Wal-Mart and then have to file a form with the state for the salex taxes you paid? No? Do you know why? Because that is a matter between Wal-Mart and the state in which that particular store is located. Wal-Mart has to pay sales taxes on its sales volume whether or not they pass them on to you. To keep things simple they pass them onto you on a per-transaction basis. That's why your receipt has line-items detailing your subtotal, the sales tax, and your final total which is the sum of both.

            The Fair Tax is designed to be revenue-neutral. That is, the federal government would collect the same amount of taxes under the national sales tax as it does now under the income tax. That means that unlike most state sales taxes, services are taxable because companies that sell no goods but make money from providing services currently pay income taxes. Thus, eBay would pay its own sales tax because providing the storefront and maintaining the Web site is a service and the merchants are its customers.

            As a business or a merchant, it would cost less to comply with this simplified tax code than it does to comply with the enormousely complex income tax system we have today. That's partly because it only applies at the retail level; factories and wholesalers and such would not be paying it. Most importantly, it would represent the single largest transfer of power away from politicians and to the people that has ever occurred during my lifetime.

            No offense is intended, but to be completely honest with you, your question is uninformed and trivially answered with a Google search. The Fair Tax bill is the most thoroughly researched piece of legislation in the history of the USA and such questions have been exhaustively answered. Really the only reason it has not already become law is not because there are credible objections to it, not because it would do harm, but because politicians do not wish to give up the tremendous and subtle power that the income tax code represents.

            • Re:Well for starters (Score:5, Interesting)

              by AK Marc (707885) on Sunday May 30, 2010 @04:43PM (#32399984)
              The Fair Tax bill is the most thoroughly researched piece of legislation in the history of the USA and such questions have been exhaustively answered.

              I'm glad I put the milk down, or it would be going through my nose right now. What's the economic impact of setting the pay-back line at poverty (as done now) vs twice poverty (and, of course, having a higher tax level to compensate)? It's never been researched at all. Back when no one heard of Fair Tax, I thought it great, and I asked the question, "why exactly poverty level?" and the answer back was something to the effect of "Because that's the lowest we can get it and the point is to sneak in something as regressive as possible while claiming it to be progressive." It is an arbitrary line drawn in the sand without *any* research at all.

              If you disagree, please point me to some research done about how it would affect the US economy if that level was set at half-poverty, poverty, and twice-poverty. Go ahead, I'll wait.

              And you are more civil than most with your "It's perfect, don't question The Fair Tax" stance. But usually, when I ask questions, they are even more self-righteous than that.

              But mention that spending is more volatile than, say, income for boom bust periods and asking about what will be done to improve the stability of income, and they'll look at you like they never took econ 101. And these are the people claiming "the most thoroughly researched piece of legislation in the history of the USA" and miss simple things like spending being more variable than income. Really? Or correct me, where's the actual study on the effect of spending levels in varying economic times. After all, this completely unresearched piece of crap was so researched, you'd be able to prove me wrong easily. Instead, it's a good idea that was perverted early on by conservative people with the specific goal of getting the top income level as small as possible and convincing everyone else it was "fair."

              When they have to name something with adjectives, you are safe in assuming the opposite, until they prove otherwise, and they haven't.

              If you don't believe me, look at the utter shit being presented about it. http://en.wikipedia.org/wiki/File:FairTax_married.png [wikipedia.org] Apparently, this "revenue neutral" legislation will reduce the taxes on everyone. Either someone's taxes have to go up, or it can't be revenue neutral. So the graph, done by "a Boston University study" (really some guy's thesis, and I've done one of those, I know what crap they can be) is presented like fact, and is demonstrably flawed. That's the level of research this gets. "It'll lower taxes for everyone, and is revenue general too" and no one notices those are contradictions... With research like that, who needs facts?
        • But.... but... (Score:3, Insightful)

          by Petersko (564140)
          Somebody could have a big income, but spend like a person with an avereage income. How will you disproportionally punish him for doing well?
          • Re:But.... but... (Score:5, Insightful)

            by bkpark (1253468) on Sunday May 30, 2010 @05:23PM (#32400310) Homepage

            Somebody could have a big income, but spend like a person with an avereage income. How will you disproportionally punish him for doing well?

            Why, by running high inflation and heavy regulation & taxing of businesses.

            High inflation ensures that this big miserly border-line treacherous criminal will lose any money he saves in banking account, etc, forcing him to invest that money into businesses, if he wants to maintain the value of his money.

            Once you've forced him to put the money into businesses, then you take the money from the businesses with various fees and what-not. (Some tweaking and fixes will be necessary, such as banning of owning gold and silver by members of public, as well as a ceiling on interest rates banks can pay on savings, but the general idea remains the same.)

            There are many, many ways to "spread the wealth around" even without a progressive income tax. Progressive income tax just makes it easier.

        • by pdabbadabba (720526) on Sunday May 30, 2010 @03:07PM (#32399184) Homepage

          And I suppose you don't care that the Fair Tax is a ridiculously regressive tax? Because it taxes buying power, it disproportionately effects those who do not save or invest but, instead, live paycheck to paycheck. So, if you're poor and you have to spend all your income on rent and food, the fair tax hits you hardest. If you're rich, and you are able to invest half your income, and you spend the rest, you're only taxed on half your income. Thus, the rich pay a lower real tax rate than the poor. (Add to this the fact that the marginal value of $1 is far less to a rich person than to a poor person to begin with and the system starts to look downright dystopian.)

          The obvious way to fix this that I've heard some propose, is to allow exemptions for the poor, etc. But now you're getting back where we are now, where individuals have to keep track of their finances and report to uncle sam for their rebates. Except now individuals have to keep track of every single purchase, rather than just their annual income from their employer.

          And this gets at the broader point: taxation is a powerful and legitimate tool for achieving public policy goals. But if you use a national sales tax, you either are robbed of those tools for the sake of keeping taxation simple, or you and up with the worst of both worlds: a highly regressive taxation system that is still a nightmare to administer.

          • Re: (Score:3, Interesting)

            by causality (777677)

            And I suppose you don't care that the Fair Tax is a ridiculously regressive tax? Because it taxes buying power, it disproportionately effects those who do not save or invest but, instead, live paycheck to paycheck. So, if you're poor and you have to spend all your income on rent and food, the fair tax hits you hardest.

            Another trivially answered objection. See my reply here [slashdot.org]. Having established with facts you can verify yourself that this is not a regressive tax and in fact has been carefully crafted not t

      • by gstoddart (321705) on Sunday May 30, 2010 @02:58PM (#32399070) Homepage

        Since they will be reporting SSNs to the IRS

        People give their SSN to eBay? Really??

        That just sounds stupid -- that's not the kind of information web sites should have about you. That's not what it's for.

    • by moosesocks (264553) on Sunday May 30, 2010 @01:14PM (#32398120) Homepage

      It's news, because the tax code does cover sales such as the ones on eBay and Craigslist, but the users have been notoriously non-compliant.

      No news here, but no new taxes either. Just even-handed enforcement of the existing tax code.

  • it's worse than that (Score:5, Informative)

    by larry bagina (561269) on Sunday May 30, 2010 @01:00PM (#32397974) Journal
    starting in 2012, businesses (that includes me and many other people who do work on the side) need to file a 1099 if you pay more than $600 [cnn.com] in goods or services from someone.
    • Re: (Score:3, Informative)

      Well what do you expect? If we're going to get a VAT tax you have to build in means of tracking every dollar of spending in the economy...
    • by PPH (736903) on Sunday May 30, 2010 @01:21PM (#32398176)

      I'm looking at this from a slightly different point of view. If I, as a small business, accept credit card payments, I'd be insane not to expect the IRS to have its hooks into data on my receipts. But if I pay someone $600 for stuff, the IRS is going to expect me to track this for them? That means I'll have to get taxpayer IDs from any vendor I buy stuff from.

      Try this some time: Walk into a local shop, buy a load of crap and then whip out your 1099-K [irs.gov] form and ask them for their social security (or taxpayer ID) number. Odds are that the clerk will think you are nuts.

      • Re: (Score:3, Interesting)

        Our CPA is going to a seminar training session about this in June or July, but that was pretty much my response. If I go to Sams club and buy $600 worth of stuff for my house a year, which we probably do, I have to send Sams a 1099-K? What about the grocery store? What about Wal-Mart? Hell I spend $600 a month on basic needs. Hell I probably spend $600 a year at my favorite restaurant. Do I need to send them a 1099-K? Am I supposed to now itemize EVERYTHING I spend? I try to do that now for business

        • Don't forget the gas station. Or United Airlines. And the additional money spent with your CPA who now has to track all this extra activity. And he'll have to now report to the tax form printing company because of the exponential increase on 1099s. And that tax form printing company will have to report the paper supplier, who has to report the mill, who has to report the logger, who has to report the landowner...
        • by PPH (736903)

          do, I have to send Sams a 1099-K?

          No. You send it to the IRS. What you have to do (as a business) is to get Sam's TIN and record it on the 1099-K. But I don't think this will apply to individuals making purchases.

        • by BitterOak (537666) on Sunday May 30, 2010 @03:02PM (#32399126)

          Am I supposed to now itemize EVERYTHING I spend? I try to do that now for business expenses, but now if I walk into Walmart to buy a $3.00 can of shaving cream because I ran out that morning mean I have to keep track of all that shit?

          Only if you're claiming that can of shaving cream as a business expense. This law covers only those items you will claim as a business expense, which as you say above, you already keep track of. Items for personal use, regardless of how expensive, are not covered by these new reporting requirements. So, if you buy a $700 computer at Staples for your home business which you will claim as a deduction, you will now have to get Staples' taxpayer ID and fill in the paperwork. If you buy the same computer for your kids to do their schoolwork, you don't have to.

    • by Itninja (937614)
      That's why for all my side work, my best friends call me 'cash' ;)
    • This that to cover on line sales / that don't get taxed?

    • by NF6X (725054)
      I suspect that it'll become much more common for bosses to say things like "Hey Bob, here's $750 in cash. Take a long lunch and come back with a printer."
  • Does this mean that I'll be able to deduct all of my capital purchases from my income tax, as I may later sell it on eBay? I bought the things with after-tax dollars in pretty much all cases, so I think I should be able to recoup any money made from selling it without paying taxes on it personally. Taxing the sale of used items is taxing twice, which doesn't seem right.
    • Re: (Score:3, Insightful)

      by Nerdfest (867930)
      Sorry, I do need to add that it's not like double taxation isn't done. In Ontario, every sale of a car is taxed. The government can make a lot of money on a car that is frequently sold. Motorcycles hang around so long, and people upgrade so frequently that I would bet the sales tax eventually collected exceeds the original price of the bike.
      • by dougmc (70836)

        In Ontario, every sale of a car is taxed.

        Texas does the same thing, and I imagine many other US states have done this too. To make matters worse, Texas recently made the value of a used car for tax purposes based on blue book value or something similar, so if you sell a used car, they'll look up the value as if it was in good condition -- even if the car has been totaled. You can get the car appraised and use that value instead of the looked up value, but that costs about $300 -- often more than the tax will be for an older car. Licensed dealer

    • Re: (Score:2, Informative)

      by meniah (186455)

      You can (and should) deduct your IRS allowed capital purchases from your INCOME, not your income tax (deductions from your income tax are known as credits). If your purchases fall under the definitions of a deductible expense, than yes - you can deduct it from your taxable income (typically Schedule C, Section 179 and others). Depending on the expense, you will either take the entire amount for the year, or you will depreciate it over a period of time. When you go to sell it, if you make more money on it th

    • by cdrguru (88047)

      What was mentioned wasn't a sales tax but income taxes. A store already (collects and) pays a sales tax on goods sold and then somewhere along the line pays an income tax on the money collected.

      Pretty much in the US if you make over $600 a year you are subject to income taxes. Period. On just about every dime you bring in. If you aren't reporting it as income, you are a tax cheat and robbing the people that should be getting your redistributed wealth, or so they say.

  • Will they make this as easy as claiming my earnings on black market goods like drugs and firearms? Maybe they should require stamps to be purchased for Ebay and Craigslist sales.

    I like the concept of opt in taxes. That and I wish I could write off my net losses (heavy sarcasm).

  • by noidentity (188756) on Sunday May 30, 2010 @01:04PM (#32398024)
    You don't sell things on Craigslist; you simply find buyers, meet, and sell it on your front porch (or somewhere in public).
    • by Plekto (1018050)

      Not necessarily. A lot of businesses are forced to advertise in the "dealer" section for car sales. Expanding this to most of the other categories has been talked about by CL users for several years now, as they generally want to avoid businesses using CL as a source of free advertising. It would be fairly simple for CL to implement this and comply(at least on the surface) with the IRS' wishes. It would also reduce the spam by an enormous amount. As it is, you have to put at least half a dozen "-foo" m

  • Already taxable (Score:2, Informative)

    by ig88b (1401217)
    The income was already taxable, this will just help them find people trying to cheat the system. This is really no different than your bank reporting your interest paid on the 1099-int or one of the many other 1099 forms that are required to be filed by various entities.
    • Actually, selling your own personal goods is not subject to income tax, even if there is an appreciation in the value (unless the item was bought for the sole purpose of investment). Buy a cell phone every 3 months then upgrading and selling the old one does not mean you have to pay income taxes on the sales of those phones.
    • by Rockoon (1252108)
      To quote the fucking article:

      "Some of these sellers may unwittingly be operating businesses, which could trigger tax consequences."

      Unwittingly operating a business! For christ sakes, how is that even possible?

      Unless the phrase "Ooops! I didn't know that I was operating a business!" jives with your world view, you cannot buy into the 'we just want to catch tax evaders' bullshit.

  • by John Hasler (414242) on Sunday May 30, 2010 @01:23PM (#32398192) Homepage
    All businesses no matter how large or how small or informal will have to file a 1099 for every entity to which they pay more than $600 in payments for goods and/or services in a year. This includes everything: the part-time plumber, your landlord, the power company, Office Max, WalMart, etc. You are going to have to get Best Buy's TIN if you purchase a server from them. The average USA small business will need to file about 600 every year.
    • Re: (Score:3, Interesting)

      by PPH (736903)

      will have to file a 1099 for every entity to which they pay more than $600 in payments for goods and/or services in a year.

      ...for every US entity to which they pay ....

      If I purchase stuff from a foreign entity, there is no such requirement. What they earn is between them and their taxing authority. But that authority doesn't get me (the customer) involved in tracking these transactions. So, all other things considered, I'm better off buying my stuff overseas. Since 'my stuff' is software and online services, there are no added shipping costs. And I save all that time managing 1099 forms.

      I see our online services business movi

  • What's to stop someone from having multiple eBay / PayPal accounts? Will keeping each of them under $20k or 200 transactions prevent reporting?

    Also, how the hell is Craigslist supposed to do accounting for anonymous ads?

    • by fyngyrz (762201) on Sunday May 30, 2010 @01:48PM (#32398424) Homepage Journal

      What's to stop someone from having multiple eBay / PayPal accounts?

      How about having to give your taxpayer ID number (SSN for most of you... yes, that same SSN they promised not to use for anything but your retirement accounts, you stupid suckers) to Ebay for starters. Then, when you try to open account #2, they say, oh, wait, we already have an account for that TIN, sorry, no more accounts for you.

      Fake TIN/SSN? Jail.

      Don't worry; while the government isn't bright enough to keep from screwing the citizens, it is bright enough to keep the majority of citizens from screwing it.

      It's just going to keep getting more and more like this. They conned the public, and the supreme court, into giving up 4th amendment guarantees on privacy a long time ago -- no legal recourse remains.

    • What's to stop someone from having multiple eBay / PayPal accounts? Will keeping each of them under $20k or 200 transactions prevent reporting?

      I don't know how the US IRS works; in the countries that I know that kind of action, when found out, would make you enemies in the IRS. And that is not a good idea, since nobody in the whole world is hundred percent correct in all their tax affairs, and by pulling a stunt like this you would make it obvious that any incorrectness on your part is not an innocent mistake but an attempt at tax evasion.

  • by Vinegar Joe (998110) on Sunday May 30, 2010 @01:26PM (#32398234)

    Fuck the IRS.

  • When you earn income from a job or investments, that income is normally reported to the IRS. But then you have to report that same income yourself. Why is the data not just sent straight to the IRS, which could automatically calculate your tax bill?

    • It's called penalties and interest of which the IRS makes a good amount of income from. If you - or the person reporting on you - mess up then you've created a situation where you are subject to high fees and interest on the error. Unless of course you are a high placed Government official like Tim Geithner or Charlie Rangel. Then it's just a simple mistake and not a problem at all...
    • When you earn income from a job or investments, that income is normally reported to the IRS. But then you have to report that same income yourself. Why is the data not just sent straight to the IRS, which could automatically calculate your tax bill?

      Two reasons.

      First, you don't know exactly what the IRS knows, so you are more likely to report everything, even stuff the IRS doesn't know -- the government makes more money. Second, and this follows from the first, it keeps people more honest and less likely to

      • by rotide (1015173)

        You lost me. First you state that the government doesn't really know how much you owe them (read: they are probably low-balling the figure) then you go on to say that they will charge you more than you're due; "government wants all your money".

        It can't be both ways.

        I'd rather the government take all the information that is already forwarded to them via work and they can just tell me what to send in (if anything). If they owe me, use the bank account I setup last year or ask for a new one.

  • Umm. I wouldn't be opposed to them taxing the _profits_, not gross sales. Particularly if they let me deduct the losses when I sell something for less than I paid for it a month ago.

    • Re: (Score:3, Interesting)

      by gnasher719 (869701)

      Umm. I wouldn't be opposed to them taxing the _profits_, not gross sales. Particularly if they let me deduct the losses when I sell something for less than I paid for it a month ago.

      That would be what they will be doing. The point is that if you have $20,000 gross revenue then you have to tell them so they can calculate your taxable profits and tax you on them. Or possibly find out that you had no taxable profits. Like if you bought a car for $100,000 and sell it a year later for $60,000, you then have to report your sales, but you are not going to be taxed on anything.

  • About time! (Score:2, Insightful)

    by hackel (10452)

    Those people have been scamming the system for far too long, I'm very glad to hear this. Unfortunately they're still not doing enough to go after the mega-corporations and their thousands of tax loopholes.

  • by jht (5006) on Sunday May 30, 2010 @07:03PM (#32401156) Homepage Journal

    The "intent" of the eBays and Craigslists of the world is supposedly to let people sell things they don't want around (more or less). If I buy something with my income, and pay sales taxes on it, then sell it later on then so be it. If I'm lucky enough to make a little money on the arrangement (like if it turns out to be collectible), that's splendid. But it's not a business. Taxes due at each step of a transaction are a VAT, and we don't do that here.

    If I'm buying goods wholesale or as an investment and I'm trying to sell them at a profit as my means of earning a living, though - well, that's taxable in this country and that's just all there is to it.

    I run a services business (as an S Corp), and I could probably pay a little less tax if I weaseled appropriately and just buried all my income as "expenses". I don't. The business pays what are real, legitimate expenses (I don't buy an iPod for my kid and call it "computing equipment" or any of that kind of shady stuff). I keep my business and personal money separate and I pay myself and my employees a salary. I could probably make a few more bucks being really aggressive about things, but I know I'm doing the Right Thing and I'm not in line for an eventual trip to Federal Pound Me In The Ass Prison.

    In other words, if you're trying to live free of the IRS by doing a cash business on eBay, screw you. Pay up.

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