IRS to Tax eBay and Other Auction Income – You Can’t Say that We Didn’t Warn You
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Two years ago we warned you that the IRS was going to look at taxing income made by selling things on eBay.

Some of you didn’t believe us. Some even counselled not to worry about it.


But sure enough, it’s almost certainly going to happen, and sooner, it would appear, rather than later.

Last year the IRS requested of Congress that they require “information reporting on gross proceeds from sales conducted on Internet auction sites,” adding that “The IRS must have the tools needed to address underreporting of this income.”

The request was repeated at least twice, and now Congress is finally paying attention. A Treasury Department report suggests that an online auction broker such as eBay “would be required to make an information return showing its customer’s name, address and Taxpayer Identification Number, as well as gross proceeds from the sale of tangible personal property.”

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And what is eBay’s response?

Said an eBay spokesperson, “What’s happening is there’s this assumption that people aren’t reporting. There are a good number of people who are professional sellers on eBay. However, there’s no evidence or any kind of statistic out there to indicate those folks aren’t already accurately reporting to the IRS.”

Uh huh.

 

Said Steve DelBianco, of the Association for Competitive Technology, in an interview with Politech’s Declan McCullagh, “The IRS coveted this kind of data for years and they didn’t have a chance of forcing you to collect it from garages, from flea markets. But they have a chance in the online world. They’re getting the data because they can, not because it’ll generate significant amounts of income.”

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5 thoughts on “IRS to Tax eBay and Other Auction Income – You Can’t Say that We Didn’t Warn You
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  1. I think this is really stupid. People that own businesses (the wealthiest of the wealth) usually have an illegal or 20+ working for them in some capacity so they can pay them min.wage or less and aren’t exactly going to ‘report them as illegal’ so they can then match SS and deal with insurance coverage or paying overtime, etc. Let’s not forget about how many corporations have left the US only to expand opportunities abroad in other countries-why (not to be globally helpful to others) but surely so they can avoid paying US taxes on a huge profit margin that goes undetected as well as paying workers low wages because they will work longer hours for the same amount which compares to slavery abroad in an organized manner. Who suffers is the small one owner or family owned business that is just trying to survive. The same concept applies to corruption and law enforcement (meaning don’t call a criminal out if the officer is a criminal by his/er own actions and won’t obey the laws). So the same applies for taxes -if those that make these laws show no respect for their own actions and image of responsibility then why would the Gov. expect those that already pay taxes on purchases, taxes from work, taxes-taxes-taxes think it is ok to continue to draw blood from the corpse of the little people that can barely make ends meet and live paycheck to paycheck (if they even have a job at all). This is where I really think they have it wrong when I see prostitutes advertising their ‘services’ constantly in the paper and craigslist and I don’t see an enforcement on stopping them from a flat out illegal service and the same goes for the countless people that do drugs recreationally-where are they getting it from and why doesn’t the gov. go after the illegal activity of slum and scum that is gradually out-numbering decent citizens that are just trying to get by the ‘legal’ way without being monopolized by a gov. that will pick and choose people to target that they decide a reason to ‘check into their activities’ because they have the power to do so. Besides selling on ebay doesn’t come free as there are listing fees/selling fees/paypal fees on and on the last thing people need is to deal with taxes on selling junk stuff-maybe the IRS should pay people a tax when they donate their stuff to charitable organizations rather than allowing a tax credit for it (totally forgetting about the larger percentage of people that just GIVE it away or drop it off at places like the Goodwill-surely they won’t chase after those people and make them file a tax write off for donating FREE stuff). At some point there has to be a line drawn and as wild as the internet is (aka:WildWildWest) there are much more important avenues of revenue that the IRS can and should be focusing on rather than smashing more dreams and hope for the unemployed or stay at home moms or people trying to find their niche to feel they are helping their family and themselves on a small level.

  2. I can imagine there are people who haven’t paid the IRS for sales on their eBay selling. Maybe they just don’t see the benefit of paying taxes on this income or giving up 10-15% of their income and get ‘nothing’ in return.

  3. What if I sell my used items at a loss? Isn’t it just a return of equity? I already paid tax when I first bought the things! Come on!!! How many damn times do I have to pay tax on the same items??

  4. This type of income has always been taxable. Ebay sellers profiting from selling items on ebay need to be reporting their income and paying taxes on that income. If they’re not, then they’re breaking the law. Forcing ebay to provide 1099s to sellers isn’t a bad idea in my opinion. Power Sellers on ebay very likely report their income as they’re supposed to due to the amount of money that they’re making online. I believe that the mom and pop ebay sellers largely don’t report their income. Now this is likely more due to ignorance than intentional. A friendly form 1099 from ebay would go a long way toward curing that “ignorance” problem.

  5. It’s already supposed to be taxed, just like you’re supposed to send your state a check for any non-taxed purchases you make online… the IRS is just changing enforcement of it, that’s all. This isn’t a new tax.

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