Here in Australia the Australia Taxation Office (the ATO, our IRS) had eBay hand over all records for Powersellers on eBay Australia that showed a complete list of their sales for the tax year 2002/2003. Presumably they also handed over all their Paypal records as well.
eBay Australia notified all sellers that they would be doing this, as such a practice falls under part of the User Agreement that sellers/buyers must agree to when they sign up with eBay and Paypal. By choosing a completed year as the ATO did, it would be a very simple process to compare declared income with eBay sales (and Paypal transactions). In Australia we have GST (Goods and Services Tax) of 10% and all traders trading above a certain annual turnover (that's turnover, not profit/income) have to be registered for GST and collect GST for the Federal Government. Obviously anybody whose eBay sales and/or Paypal transactions are over that limit and aren't registered for GST are also in trouble. Phil Phil Edwards Cinema Arts 26 Vista Avenue Soldiers Point NSW 2317 AUSTRALIA E: [EMAIL PROTECTED] W: www.cinemarts.com Phone: (International Dial) 0011 61 2 49847322 Phone: (Domestic Dial) 02 4984 7322 ----- Original Message ----- From: "Tom Johnson" <[EMAIL PROTECTED]> To: <[email protected]> Sent: Friday, April 01, 2005 4:41 AM Subject: Re: [MOPO] Ebay & sales taxes or income taxes > Though for those of us who are not "dealers," I believe proceeds from sales > made within a "hobby" are exempt from federal income tax, or at least were > last I checked the tax code on it a few years ago. I'm no tax expert, and > may stand corrected, but my understanding is: > > if you are genuinely not in the poster or collectibles business--that is, it > is not a source of income--and sell a poster on ebay, or anywhere else for > that matter, you are not required to pay federal income taxes on any profit > you realize for that sale. Your claim would need to stand up under any audit > you might get--but if you are prepared to show that you buy and sell as a > hobbyist, and that you spend about what you bring in, or more, on that > hobby, you're in the clear. Now, if you suddenly saw a huge windfall from, > say, selling a very valuable poster that you paid very little for, didn't > declare anything , and then got audited, maybe a tax auditor would hold you > liable for capital gains tax on that sale. But again, if you could show > that over the course of several years you still averaged no income from your > buying and selling, i think you'd still be ok--assuming the feds believe > you. > > > --Tom Johnson > > on 3/30/05 10:13 AM, Richard Halegua Comic Art at [EMAIL PROTECTED] > wrote: > > > I know people like to think that because they aren't involved in a > > "business per se", the single reality is that when you do sales to people > > within your state, regardless of whether you have a sales tax license or > > not, sales taxes must be paid on that sale and the onus is on the buyer to > > pay those. > > > > However, income taxes are to be paid on every dollar you make -- no matter > > how you make it. > > > > the gov't has been working on this issue for some time, this is nothing > > new. However, if a W-2 is not issued, how does the gov't know you made > > money?? As Shakespeare said "therein lay the rub"..... > > > > The gov't could create a law requiring ebay to reveal sales info by > > sellers. But that would create numerous lawsuits that would drag on for years > > they could require banks to report bank deposits.. or even more dangerous > > to the sellers.... They could require paypal to report all payments on a > > regular basis, which seems to me to be the one way that the gov't would > > have that would not require a constitutional amendment. > > > > One reality... the constitution forbids an "interstate tariff on sales". Or > > in other words, unless you have a presence in a particular state, you need > > not collect sales taxes in that state (presuming it isn't the state you > > live in) and that is why you see some businesses (liek Wal-Mart) ask for > > taxes of all buyers as they clearly have a presence in all states. However > > you still must pay income taxes on the profits of that sale. > > > > that's teh simple of it > > > > Rich================================ > > > > > > > > > > > > > > At 09:57 AM 3/31/05, Movielegends wrote: > >> Well not exactly "TAX MAN"... > >> > >> Media Scrutinizes eBay Sellers' Tax Obligations > >> > >> eBay sellers are wondering about the sudden media > >> speculation as to > >> whether the IRS will turn the spotlight on eBay. > >> Monday kicked off > >> with a segment on morning television show The Today > >> Show, "IRS to look > >> at eBay buyers and sellers." And an Associated Press > >> article By Mary > >> Dalrymple, "Online sellers who make big money on eBay > >> could face the > >> tax man," showed up on sites from Wired to > >> BusinessWeek to USA Today > >> and many local media sites. > >> > >> TechDirt blogged on the issue, "EBay Sellers Try To > >> Get Moral Support > >> For Income Tax Evasion." Comments to the post > >> expressed displeasure > >> with the specific issue of eBay taxes and the tax > >> system as a whole > >> (http://www.techdirt.com/articles/20050328/045208_F.shtml > >> - scroll > >> down to read comments). > >> > >> > >> > >> > >> __________________________________ > >> Do you Yahoo!? > >> Yahoo! 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