Bottom Of The Barrel

eBay maybe forced into eTax

The Internal Revenue Service is putting a full court press on eBay to disclose the names of those who are making taxable income from the auction service. The IRS wants to put eBay into the same class as Sotheby’s and have them report any customer that carries out more than 100 transactions a year worth at least $5,000. The Treasury expects to collect $2 billion in extra taxes in 2008 from currently unreported earnings from sites such as eBay.

eBay says they are not a "broker" but rather offers an "auction-style" service but it is their solid business structures and dominating market presence that has helped attract the unwelcome attentions of the taxman.

Ebay already tracks the volume and value of its customers’ transactions, notifying them when they reach key milestones and soliciting them with customized services and the Treasury proposal would open the way for the financially stretched IRS to piggyback on the company’s systems by requiring eBay to report to authorities when customers hit milestones.

Elena Neitlich, who runs a highly successful online store from home called Moms on Edge, says eBay appointed a special adviser to coach her almost daily on every nuance of her auctions from catering to different time zones to the optimal names for potty training toys but the award-winning eBay seller says she cannot recall ever being reminded of her tax liabilities. "I don’t remember anyone saying to me that now we needed to go through the tax issues. No, that didn’t happen," she says. The eBay spokesperson says: "We believe that it is the seller’s responsibility." Typical corporate response but seriously, Elena, don't be so naive.

Although you may not like it, the IRS will continue to find ways to make sure each and every citizen pays taxes on earned income no matter what the source. It may take a few years for them to catch up with changing markets and emerging technologies but they always come around. This should not a surprise to anyone "doing business" on eBay. As one eBay user said "What I do is just like any other small business, so I should pay tax". Yes you should Ben.

Labels: eBay

posted by TheWino @ 11:05 AM