This is ridiculous. Many many people sell used items on Ebay (like an online garage sale - I sell my daughter's clothes and toys as she outgrows them). When I do this I am not making a profit - I am selling things at a loss (getting much less than the original retail price) so I don't consider it "income" and therefore should not have to be taxes on it. With all the ebay fees and paypal fees and then adding taxes on, it really would not be worth it at all to see on ebay anymore. I'll just go back to the old fashioned real garage sales.
Nowadays, income is whatever the IRS says it is.
A lot of people do make money and run business on eBay. If you ran your own business, you'd be expected to collect sales tax based on the state you are in, and if you dealt with people from other states they would be expected to file their own taxes with their own state (Virginia for example calls it as "Use Tax").
Since eBay is the "storefront" for these businesses, the IRS is asking eBay to collect the information for them.
I would expect eBay to say no. But companies making profit on eBay SHOULD have to pay taxes on the profit. And if there are sales taxes, they should be paid by people whether they buy from a local store or from an internet store. Otherwise it's unfair to the companies who provide services directly to the community.
I was thinking the same . I sell on ebay and sometimes I make money and sometimes an item doesn't sell. Does that mean I will get taxed on the listing or just what items I have sold? If they are going to do this I will just do a garage sale here and there. Otherwise like you say it wouldn't be worth it. Its not like I am making a killing on there. Its a shame because some people are able to boost their income to pay their bills . Or like me be able to stay home with my child. I am sick of taxes on everything.
The point is you have already paid taxes on it multiple times. The cookie stealing children, I mean the gubbamint wants to tax it as many times as possible untill the system totally breaks.
I say that eBay is not responsible for the fact that these people are evading the IRS.
If a straight commission salesperson were failing to make quarterly tax payments to the IRS while working for Mary Kay cosmetics or Tupperware...would the IRS go after those companies?
EBay should tell the IRS to go p!$$ up a rope.
Egad.
While this fishing expedition can't be legal without some sort of subpoena (which would require something more specific than "we may find something"), I doubt the IRS would really go after people like you who are doing virtual garage sales. Not because they wouldn't, but because the penny-pinchers would lose more than they would gain. What they want to find, as I am reading this article, are people who are running businesses on eBay--real business, mind you--who are skipping on the taxes because it is online.
Then you don't owe any taxes and you have nothing to worry about. This is not a new tax, it is a method of tracking people who are using ebay as a business.
you are not the type of ebay user the government wants to go after. They are looking at the professional seller that sells day in and day out and makes a living off of ebay. Why shouldn't they have to pay taxes? Why should you or I subsidize their lifestyle?
The irs looks at it as (your initial cost - depreciation) = value
(Sales price - value) = taxable income
Now that the demons are back in power expect a lot more of this crap - I especially like nailing you with "imputed income" if you own your own home because you could rent it out and get inome (which is taxable), but if you rent, then tent is not tax deductable. Tails they win, heads you lose.