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Australian Gov't Asks eBay To Name Big Sellers 215

Posted by Soulskill
from the fishing-expedition dept.
beaverdownunder writes "In an effort to combat fraudulent claims lodged within its Centrelink welfare-payment agency, the Australian Government has asked auction-site eBay to name all Aussies who sold more than $20,000 worth of goods in the last year. Should someone be found to have been doing such a high-volume of business on eBay while claiming Centrelink benefits but not declaring that income, they could potentially face prosecution. However, the president of the Australian Council for Civil Liberties, Terry O'Gorman, says this action is a gross invasion of privacy. 'What we say should happen is that if police have probable cause for investigating someone, they go to a magistrate, they get a warrant and they access that person's eBay records that way,' he said."
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Australian Gov't Asks eBay To Name Big Sellers

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  • by The Dancing Panda (1321121) on Friday June 15, 2012 @11:54AM (#40335771)
    I guess I just think people should pay their taxes. If I make over 20,000 dollars, my employer reports me. Not sure why other people should get away with it because they're selling stuff on E-Bay. It's not really an invasion of privacy. They didn't ask for what people were selling, just if they made over a certain amount of money selling stuff. And it's not like their looking for some people who sold one or two trinkets. 20,000 is a lot of income you're trying to hide.
    • by 6ULDV8 (226100) on Friday June 15, 2012 @11:57AM (#40335811)

      eBay also has the right to say "not without due process" as it applies to the jurisdiction.

    • by Cimexus (1355033) on Friday June 15, 2012 @12:01PM (#40335853)

      Yeah, inclined to agree. I'm no more of a fan of government intrusion into more areas of life than the next guy, but as an Australian taxpayer I also want to see the welfare using our tax dollars on those who are genuinely needy (given than most government benefits in this country are means-tested). This is no different than the dodgy guy down the road claiming Centrelink benefits without declaring his job, or claiming for non-existent children etc.

      $20k seems like a reasonable threshold too, though perhaps you'd want to also add a minimum number of items threshold as well (someone turning over many items to make $20k can probably be said to be a 'business on the side', whereas someone who just does a one-off sale of something expensive, say a car, and who isn't likely to use Ebay much on an on-going basis, is a different story).

      • by misexistentialist (1537887) on Friday June 15, 2012 @01:42PM (#40337111)
        Shouldn't they just be auditing the people applying for welfare, rather than tracking the financial activity of the entire financial population?
        • by thegarbz (1787294)

          They do, and they typically find gross cases of fraud. This is just one of the methods used. Cross check a list of high volume second hand sellers with a list of welfare cases is by far easier than doing complicated checks on their bank balances, especially when that bank is Paypal.

          As someone who watches ... acquaintances get handed the world on a silver platter while she sits on her fat arse at home while I work 9-5 I say anything that gets rid of bogus welfare claims is a bonus. Actually I lied, she doesn

      • Is the expression "bludging bastards" still in common use down there?

        • Is the expression "bludging bastards" still in common use down there?

          Only by gutter journalists who like to create headlines rather than report them... oh, and ignorant dickheads. Seriously, like any country we have some fair dinkum idiots down here. :)

    • by mcmonkey (96054) on Friday June 15, 2012 @12:05PM (#40335899) Homepage

      One issue is, there's no way this info stays with the welfare folks. It's going to go to the tax revenue folks as well. And the drug folks to see if anyone is selling paraphernalia. And half a dozen other agencies.

      The way modern governments and law have developed, you're pretty much guaranteed to be breaking some law.

      But directly to DP's point, if there's evidence or reasonable suspicion someone is breaking the law, and the government goes after that person, that's not necessarily an invasion of privacy.

      But this kind of fishing expedition is pretty much by definition an invasion of privacy.

      • Re: (Score:3, Insightful)

        by Grimbleton (1034446)

        Oh no, criminals might get caught! What an issue!

      • by Grishnakh (216268) on Friday June 15, 2012 @02:24PM (#40337535)

        I'll reiterate my idea from another post above. If the government wants to do a fishing expedition for ONLY welfare cheats, and we want to keep them from fishing for lots of other info and harassing other people at the same time, it's easy to do. Have Ebay compile a list of records of all the people selling over $10k or $20k or whatever; each record has the person's name, ID number, etc., enough to make them uniquely identifiable. Make a cryptographic hash of every record. Then have the government do the same for all their welfare recipients. Then compare the hashes; this will identify people who are common to both groups; Ebay can then hand over the information for those people, without revealing anything else.

        • by webheaded (997188)
          Why exactly do you think they would do this rather than simply sharing the info like he said? They're the government and they can pretty much do whatever they want with the info once they get it because no one is going to limit them. That's the kind of the point of stopping them from going on a fishing expedition in the first place. Harassment is all that will come from this. Plus it is just YOUR preference for ONLY welfare cheats and other people are more concerned about taxes or other government progr
          • by Grishnakh (216268)

            I'm just pointing out one method by which you can limit how much info the government gets, just in case they can obtain some kind of court order giving them access to the information. If they did have a court order or law requiring Ebay to give them this info, there's no way Ebay can do so without knowing a lot of private info about the sellers, which Ebay has no right to. And Ebay handing over info on all their sellers gives the government access to a lot of private info that they also have no right to (

          • by swillden (191260)

            Why exactly do you think they would do this rather than simply sharing the info like he said?

            Because privacy advocates will scream bloody murder about just sharing the lists. The only check on government action is the voice of the people, but if the people are loud enough, it can work.

            They're the government and they can pretty much do whatever they want with the info once they get it because no one is going to limit them.

            Which is exactly why it makes sense to employ a cryptographic protocol so they can find the e-Bay high-earning welfare recipients but cannot get any other information out of it. To use math to make it impossible for them to use the data in any way beyond the stated purpose. That still leaves open the question of wh

        • The idea is good but I think you are grossly overestimating the technical understanding of the government party :(

        • by swillden (191260)

          A problem with your scheme is that it still gives too much information to whichever party gets the lists and does the comparisons.

          e-Bay could take the list of welfare ID hashes and use it to identify all of their users who are on welfare, and then potentially misuse that data.

          The government could take the list of e-Bay high-earner ID hashes and use it to identify all of its citizens who are e-Bay high earners, not just welfare recipients.

          One solution is to have both give their lists to a third party,

    • by cpu6502 (1960974) on Friday June 15, 2012 @12:06PM (#40335907)

      The problem is that Ebay is not pure income. I didn't sell anywhere near $20,000 last year... more like $5000. But that's NOT really profit. The $5000 of used games/books/video originally cost me ~$7000 to acquire. So the net profit is negative income (a loss). I'd still be entitled to collect welfare or unemployment checks.

      I would expect the tax agency to understand that basic principle, but I suspect they are more motivated by the desire to pay-off their budget deficit and will scew a lot of innocent people in the process..... people who are selling-off their possessions in order to survive unemployment, and actually losing money in the process. (Like my cousin who sold-off his $20,000 motorcycle for $10,000 just so he could buy food.)

      • I didn't sell anywhere near $20,000 last year... more like $5000. But that's NOT really profit. The $5000 of used games/books/video originally cost me ~$7000 to acquire. So the net profit is negative income (a loss).

        And if you tried to insure them, would their insured worth be $7,000?
        If you didn't sell them, could you use them as the equivalent of $7,000 to purchase other goods, pay bills, etc.?
        If you lost them, would you save up of $7,000 in order to regain your existing current wealth?
        If you had to buy t

        • by chrismcb (983081)
          That is the way taxes work. Most companies depreciate their assets over time. So they can essentially take the loss as they use the item, instead of when they sell the item. It doesn't matter how much the item is worth. It matters how much you paid for it, and how much you sell it for. At least that is how it works in the US. Dunno about Down Under
    • by jmorris42 (1458) * <`jmorris' `at' `beau.org'> on Friday June 15, 2012 @12:08PM (#40335933)

      But! But! This is on the Internet! None of the meatspace rules are supposed to apply here!

      Bullcrap. Avoiding sales tax across state lines in the US dates back to Sears Roebuck and even makes some sort of sense. But the idea of somehow being beyond the law just because of the Internet is barmy. eBay is involved in the transaction as a broker. Here in the U.S. they should be forced into at least filing a Form 1099 or something, getting the state taxes comes back to the same problem as sales tax. And I'm sure Austrailia has a similar procedure to report income for non-employee contactor/consignment/etc sitautions. The actual story here is that they haven't been reporting this sort of income for years. Sounds like they need a knot yanked in their asses.

      I'm a conservative with so many libertarian leanings I's switch if the LP wasn't overrun with Idiotarian Libertarians who seem to only care about being worse surrender monkeys than than Dems and legalizing weed. But there must be taxes and nobody gets a pass on paying them. How high should the rates be I'll be happy to argue; too damned high! But ya gotta pay something. And to be raking in $20K+ free and clear while suckling at the public teat is right out.

      • by cpu6502 (1960974)

        I am not obligated to pay California or any other foreign tax, because I don't live there and do not have representation in their government to make my voice heard. (i.e. That I think 9% tax is nuts.) I only have to pay tax to the governments where I have representation.

        When I ordered some stuff from the UK, the store tried to scam me into paying VAT. Naturally I refused. I have no voice in the Parliament, and therefore have no reason to pay them a tax.

        • by Sir_Sri (199544) on Friday June 15, 2012 @01:48PM (#40337193)

          Um... If you travel to california you are obliged to pay sales taxes in california. Whether you can vote there is completely irrelevant. Governments have no particular obligation to give anyone representation. Nor does paying taxes give you any guarantee of representation, (ask juveniles or anyone living in Washington D.C. if you're confused by this).

          When you were doing business with a UK retailer you tried to scam them out of VAT tax. They *have* to pay VAT taxes on the stuff they bought and they add to the VAT at each step. You can file a claim with the *government* after if you are exempt from VAT, but the retailer is obliged by law to collect it, otherwise it comes out of their pocket. I don't know for sure about the UK but Ireland has some sort of VAT reduction thing for tourists where you can get some of the VAT you paid back.

          Also, your one line assertion that 9% taxes are nuts is childishly foolish. Different areas tax in different ways. There's nothing particularly nuts about a 25% sales tax or a 1% sales tax. What matters is total government taxation, and who bears the burden.

          VAT by the way isn't sales tax. It seem like it. But it isn't. It's a value added tax. At each step of the production process tax is added based on the value added at that step. Talk about an administrative nightmare. I'm not suggesting it's a good or efficient system (although it certainly has its advantages), but it's not a sales tax.

          • by cpu6502 (1960974)

            >>>Um... If you travel to california you are obliged to pay sales taxes in california.

            God you're dense. Yes if I'm within the juris diction of a foreign government, I have to obey the laws. BUT I was talking about when I'm sitting at HOME, 3000 miles away on the other side of the continent, and selling stuff on Ebay (the topic at hand). I am not under any obligation to pay the California government a dime in tax on my sales. Or file a sales tax return with them. "No taxation without rep

            • by Sir_Sri (199544)

              Yes, and if you're buying from a UK business it is essentially the same as traveling there, buying the item and flying home. They aren't actually in your living room.

              The moment you access their website you stepped into their jurisdiction the in the virtual space, just as setting foot into canada means you set foot in our jurisdiction, just as the moment you cross into another state you are now in their jurisdiction and have to pay their sales tax.

              Also, your 'union' doesn't rule the world. Get over it. Go

              • Not quite. One really doesn't have to pay VAT for exports to outside of EU. So if an American orders something from UK, there is no need to pay VAT (doesn't have to do anything with representation, though). They have to pay import taxes and duties though, if such apply.

                Not charging the VAT, even if you don't need to, is a major hassle, though, leading to a lot of paperwork.

        • But do you still expect California police to stop strangers from beating you up in the street before killing you when you visit the state?

      • "Here in the U.S. they should be forced into at least filing a Form 1099 or something, getting the state taxes comes back to the same problem as sales tax."

        But... eBay isn't GIVING the seller any money. They are CHARGING the seller for their service. Why should they file any tax forms on the seller? It is the buyer that would, potentially, issue the tax document, not eBay.

        And how can they say the winning bid amount was the final sale amount, anyway? Let's say I put in a winning bid of $600 on a used Widget.

        • by jmorris42 (1458) *

          > But... eBay isn't GIVING the seller any money. They are CHARGING the seller for their service.

          There is a consignment store/flea market across the street from where I work. If you put stuff in there for them to sell you can bet it will get reported. At least in theory.... we all know reality often differs, especially in a down economy... it isn't as bad as Greece yet. Explain why should eBay be different? Especially when you consider that for all practical intents and purposes 'eBay' == eBay + Payp

    • So if my neighbor is cheating on his taxes, why should the government have my transaction records for ebay?

      It would be no different than reading everyone's e-mails because they're "sure" someone is a terrorist.

      • by Sir_Sri (199544)

        Except that everyone has to pay taxes. If you've even had 1 dollar in taxable income via ebay sales and didn't report it you're cheating on your taxes too. The government right now only cares if you did enough ebay sales that you have enough income for it to be worth looking into. But if they believe it worth the effort they could demand ebay turn over *all* transaction records and dig through those to figure out how much taxable income is there. That would seem like a nightmare of a problem though (bec

      • by chrismcb (983081)
        If your neighbor is cheating on his taxes, when should the government have your work records?
    • by Sir_Sri (199544)

      The catch would be that 20k in sales on ebay isn't 20k in taxable income. If you spent 19k to buy stuff you sold for 20k, and spent 500 dollars in shipping your taxable income is only 500 dollars (or at least, would be in some places).

      But ya, the point is sound. You shouldn't be able to launder money through ebay, if you have enough ebay sales it starts becoming a commission/sales job, and needs to be reported as income. The problem is that you're self reporting the price you paid for things still (befo

    • This doesn't appear to be an issue about taxes...it is about someone receiving govt assistance while making undeclared money on the side and not reporting that income, therefore possibly making them ineligible for further govt. assistance. That would be like someone here in the States drawing unemployment compensation, but making $50,000 a year selling stuff on the side. If that is the case for that person, they shouldn't be drawing govt. assistance since they have an income..
  • by CanHasDIY (1672858) on Friday June 15, 2012 @11:58AM (#40335815) Homepage Journal
    You have to take into consideration overhead costs, product purchases, and other various retail related expenses.

    Not that I'm defending the practice, just pointing out facts.
    • by thegarbz (1787294)

      Here's a fact, if you're running a business without declaring it to centrelink you're in the shit.

      Hell people get in the shit for far less things like living with someone. One day you get married and Centrelink comes back and says Oh you were living with this person while you were a student, lets just assume you were actually a defacto couple, and your partner had income, please repay...

      I don't think anyone's stupid enough to think that centrelink would just look at the gross goods sold and cut people's pay

  • wow, common sense! (Score:5, Insightful)

    by ganjadude (952775) on Friday June 15, 2012 @12:00PM (#40335845) Homepage
    if you suspect someone, you get a warrant, not a list of XX people who made more than YYY. Why should ebay do the cops job? now remember that ebay is in probably 95% of the countries on the planet. Why should ebay do the polices job in over 200 countries?
    • by medv4380 (1604309)
      For the same reason your bank reports to the IRS any transaction over 10,000
      • by ganjadude (952775)
        the bank != ebay I dont give ebay my money to hold onto and act as my keeper. I pay ebay for a service, It is up to me to do the right thing and thats how it should be. It is beyond unreasonable to expect ebay to be able to do what is being asked here, and will obviously be asked from other governments if they say yes without driving up their cost, and in turn driving up our fees.
        • by Cimexus (1355033)

          No but Paypal (owned by Ebay and used for most Ebay transactions) IS legally a bank in most countries, including Australia...

          • by Cimexus (1355033)

            Actually I shouldn't have blurted that out ... I was sure I had read they were governed by banking regulations in Australia, but I can't find a cite for that right now. I did confirm though that:

            - It's NOT considered a bank in the US; and
            - It IS considered a bank in most European countries.

            Australia tends to be more EUish than USish when it comes to banking regulations, but I can't find anything definitive on this either way. Hmmm...

            • It's incredibly difficult to become a 'bank' in Australia due to the way our laws are structured. Most financial institutions are treated as credit unions or financial services funds.
          • by ganjadude (952775)
            ok, than why are they not going after paypal for transaction history instead of ebay for the top sellers history? wouldnt going after paypal for transaction history be a little bit more on the most people will be ok with it because it is a bank? not abusing a private company to spend money of its own to do the work that generally a warrant is needed to obtain?
        • You walk into a car dealership and try to buy a car costing over $10000 by paying cash. The feds would be on to you before you leave the lot. The car dealerships and many other businesses are required to report any transaction more than a threshold. How did the feds get Eliot Spitzer?
          • I bought a $12,000 car with cash and no feds were ever directly involved. I had to sign a couple of forms and that's about it, one of which was an acknowledgement that the transaction was being reported.

            • Very good. But the law requires the businesses to make you fill a form and make them report the transaction. Nothing more burdensome is asked for in the e-bay case. Why is there an expectation of privacy there?
              • Because when I buy a car from a dealership, I'm paying them more than $10,000. When I pay for eBay's auction service, it costs much less than that. If eBay were to start selling cars rather than just providing a marketplace, then they would have to report large transactions too.

                Imagine a car dealership in a shopping mall (some of these do exist). Part of the lease agreement is that the mall management gets some fraction of the stores revenue. Asking eBay to report large transactions is a little like asking

    • by thegarbz (1787294)

      if you suspect someone, you get a warrant, not a list of XX people who made more than YYY. Why should ebay do the cops job?

      You're right. Why should companies report payments made to employees, why should banks report interest made to employees, why should anyone report anything financial to the government about other people?

      Oh that's right to prevent tax and welfare fraud which has the effect of driving the tax rate up for those who do the right thing.

      This is not a case of suspecting anyone, it's no more complicated than the tax department asking for the income payments to staff. It goes to the government, the government determ

  • by 140Mandak262Jamuna (970587) on Friday June 15, 2012 @12:02PM (#40335871) Journal
    All employers are required to report salaries and bonuses paid to their employees. All businesses are required to submit detailed reports of their sales and maintain documentation for auditing. All wholesales, retailers and everyone is required to maintain clean accounting of their counterparties and submit them while being audited. Just because the commerce happens over the internet does not give you additional rights or additional expectations of privacy.
    • When you sell something through eBay, you don't get paid by eBay, you are paid by the seller. In fact, you pay eBay.

      • by thegarbz (1787294)

        When you transfer money to someone through the bank you don't get paid by anyone either. Yet your bank balance is reported to the federal government for taxation purposes.

        As I've mentioned elsewhere, simply running a business does not preclude you from welfare payments. This is just a method that the government use EVERY YEAR to identify people who are committing welfare fraud by not declaring business income.

        • Banks are subject to different regulation than auction houses. If they want eBay to report on the auctions going through their system, the government should make the rules explicit in law.

    • by webheaded (997188)
      When you work for an employer, you are signing up to be working for that employer. When you sell things on eBay, there are various reasons you might be doing so and various scenarios in which it is none of the government's business. Selling something on eBay is not the same as getting a job at McDonalds or working at the bank. The mere fact that you've sold something on eBay should not put you on some government list. That's absurd. You aren't WORKING for eBay (they DO report that)...you are just using
  • Get a warrant (Score:5, Insightful)

    by Novogrudok (2486718) on Friday June 15, 2012 @12:06PM (#40335913)

    My opinion is that anybody who has a turnover of $20K a year on eBay should mention this on their tax returns. If they did not make a profit, chances are they do not have to pay any additional tax (depending on local laws).

    However, "pro-active reporting" or policing should not be done by eBay. If the Revenue Office or the police have suspicions about a particular person -- they should get a warrant to get data from eBay, just like Terry O'Gorman says.

    • by thegarbz (1787294)

      My opinion is that anybody who has a turnover of $20K a year on eBay should mention this on their tax returns.

      If you made that much turnover on ebay chances are you're actually legally obliged to mention it on your tax return.

  • Income reporting (Score:4, Insightful)

    by the eric conspiracy (20178) on Friday June 15, 2012 @12:10PM (#40335959)

    I don't know what it's like in Oz, but here in the US if you have any sort of income via salary, investments, pensions and yes even selling goods on EBay it gets reported to the IRS on various types of forms generally 1099 or W2 something or another.

    One thing to keep in mind is even if the Ebay income is reported on a 1099 to the IRS, that income isn't necessarily profit that you have to pay taxes on. Ebay fees, shipping costs, the costs associated with the acquisition of the items etc all count against the income. And the fact is few people really make any profit on Ebay.

    I really don't consider this an unusual invasion of privacy. It part and parcel of the normal invasion of privacy needed to run the system of anal rape known as income tax. Since the US Constitution was amended to enable that many years ago, Congress has the power to write laws to enable it. There isn't much you can do about it except move to someplace that doesn't do that.

    • by Lisias (447563)

      It part and parcel of the normal invasion of privacy needed to run the system of anal rape known as income tax. Since the US Constitution was amended to enable that many years ago, Congress has the power to write laws to enable it. There isn't much you can do about it except move to someplace that doesn't do that.

      As Eduardo Saverin did?

    • When you sell something through eBay, you don't get paid by eBay, you have to pay eBay.

  • I sell more stuff on gumtree than ebay, and there's no electronic transaction record, and they pay cash, and its free...

    Enjoy the red tape shit fight

    Regards
    A Taxpayer

  • by Anonymous Coward

    The problem I think is more with PayPal than eBay, the Australian Taxation Office can look into an Australian bank account at will because it is tied to the Australian Tax File Number (TFN). This is a legal requirement of operating as a bank in Australia. PayPal as far as I am aware does not have an Australian banking license, and hence is not required to bind the TFN to the PayPal account. The .au government just needs to force PayPal to acquire a banking license to operate in Australia. I think that woul

    • by ColaMan (37550)

      This is a legal requirement of operating as a bank in Australia.

      You are not required to give a bank or any other entity your TFN. But the consequence of that is that they will tax any interest/earnings at the highest tax rate.

      So either way, taxman wins.

  • by peter303 (12292) on Friday June 15, 2012 @12:21PM (#40336095)
    [Internet] companies have to issue a 1099-K for people sell 200 transactions or over $20,000.
  • A guy who lived over the road from me in Melbourne had a job supervising a hostel, for which we was paid with free accomodation. He had welfare payments from the government because of a disability. He used that money to pay for his hobby of motorcycle racing.

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