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

Quote :

"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."

I've never sold stuff at a flea market before, but I'm pretty sure you don't pay taxes at a flea market. Someone isn't satisfied with their large houses, government retirement packages, and luxury cars.

Watch out tdub Classifieds section, they're coming for YOU!

5/8/2007 10:35:04 AM

laaaaaaame. our tax free black market will soon be regulated

5/8/2007 10:37:06 AM

Wait, but I thought selling used items was untaxable because you already paid taxes on the money used to purchase them.

Hence why I thought you only paid taxes on the capital gains when you sell your house (the amount received above what you paid for it), you already paid income taxes on the money used to buy it.

Am I wrong in my understanding?

5/8/2007 11:34:48 AM

there would no reason to charge tax on sales of items you purchased and sell at a lesser price. Probably the tax is for things you might have a gain on such as collectibles, antiques, etc.

5/8/2007 11:40:53 AM

^ I don't think that's their idea. I doubt many people make over $5,000 a year on collectables and antiques on ebay.

[Edited on May 8, 2007 at 12:03 PM. Reason : could be wrong... i don't have many antiques or collectables]

5/8/2007 11:50:44 AM

I've always thought eBay got by cause it was a private transaction, like buying your neighbor's car. You're not buying it from eBay, it's just where one person's wares are displayed for sale.

Only thing I ever got on there was a fake Rolex made and sold from Hong Kong for $30. It was nice.

[Edited on May 8, 2007 at 12:59 PM. Reason : .]

5/8/2007 12:57:10 PM

^^

you can't tax people on things that depreciate. That would be like taxing the sale of your car if you decided to sell it after two years and it was worth @ half what you paid.

5/8/2007 1:05:51 PM

^ that's what I'm saying... so what's the point of taxing ebay transactions if most of the stuff is depreciated stuff?

I've also noticed that over 50% of the items listed on ebay these days are not "depreciated" items. Most of them are items listed by businesses. That may be what they are targeting -> Companies that use ebay as a third party transaction site to avoid paying taxes. That would be the only reason to tax people on ebay. Other than that, I don't see any other reason.

5/8/2007 1:27:57 PM

i was under the impression those businesses already have to pay taxes though.

5/8/2007 1:56:34 PM

this makes me really want tsome sort of flat tax ... then the IRS could go to hell and find out something else lame to do with their lives.

5/8/2007 2:07:35 PM

SHIPPING RATES TO INCREASE FOR SOME ODD REASON FOLLOWING THIS.

5/8/2007 2:18:29 PM

Quote :

" I thought you only paid taxes on the capital gains when you sell your house "

sort of off-topic, but you don't pay any taxes on capital gains for the sale of a home unless the gain is more than $250k or $500k if you're married.

5/8/2007 3:29:56 PM

make sure you pay the use tax on ebay purchases

http://www.dornc.com/taxes/sales/use.html

5/8/2007 4:44:50 PM

Why not just do a simple flat tax for all transactions on eBay? Then eBay can simply incorporate it into the fee they already charge for the service. If I remember, eBay already charges their fees based upon the "value" of the object anyways...

5/8/2007 5:26:42 PM

^^ from what I can deduct, you file it ONLY if the item purchased is subject to the North Carolina sales tax... and from what we've already discussed, depreciated items are not subject to sales tax.

5/8/2007 8:41:16 PM