Question
Australian Tax Office Investigates eBay PowerSellers
By Ina Steiner
AuctionBytes.com
September 16, 2004
eBay Australia sent members an email informing them that they have received a request from the Australian Taxation Office (ATO) for information relating to members who were Australian PowerSellers from July 2002 to June 2003. According to the email, the ATO has defined "Australian PowerSellers" as members with registered addresses in Australia.
eBay supplied the government agency with the contact names, addresses, telephone numbers, and monthly sales figures, reporting that it is required to comply with the request and is allowed by its Privacy Policy.
A heated discussion is going on at the eBay Australia discussion boards.
http://digbig.com/4brxq
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Apparently the taxes on incoming merchadise just isn't enough for them. But, then again, what else is there to do but pay more taxes wherever one is...god forbid (and allah too) that one gets to keep any money before they croak...and pay estate taxes....
Not a fan of any taxation...
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It's only a matter of time till the IRS asks/demands ebay for that info on us. Everyone needs to get their ducks in a row.
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The IRS is not like that in this country.
If Congress passes a law saying that this info is reportable, then they will collect it through an automated system. Under such a law, all eBay sellers would probably have to supply their SS number to eBay.
But if Congress passes no such law, the IRS will consider that they don't have authority to act, and they won't act. They're a bunch of rule-bound bureaucrats.
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The figures eBay is providing are probably the gross sales figures, and we all know how little profit that actually represents.
Lots of what I sell is from my basement, and actually sold at a loss over my original cost.
When the hopeful revenuers do a little basic research, they will likely discover what we all know. The net profits on eBay can be pretty paltry. Most of it goes to listing fees, commissions, Paypal and overhead.
I think the IRS has bigger fish to catch.
Larry
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The IRS is not like that in this country.
If Congress passes a law saying that this info is reportable, then they will collect it...
But if Congress passes no such law, the IRS will consider that they don't have authority to act, and they won't act...
Don't believe it for a minute.
IRS has the authority to demand information like this any time they wish.
Aggregated information that shows enough sellers with volumes high enough to indicate sizeable tax liability will result in more detailed info demands for these people from Ebay and from payment processors that these people use - which would have their bank account info with social security numbers.
I, for one, declare our online sales income to the tax folks - and I've paid dearly for this. But since it's the law, every one should be on the same level playing field. It's not fair to sell in competition with other sellers who don't pay taxes.
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I did not get such an email but I am not bothered in the least. Since the Australian Government introduced GST, I am registered and keeping the most up to date and accurate books I have ever kept. The requirements of the law are (now) fairly straightforward, although it was a mess the first year when they rushed it in to "catch" all the tourists who came for the Olympic Games. The laws, the accountants and the Tax department were not ready when the laws were introduced, and I kept my turnover below the threshold that year to learn how to operate safely once I did register to collect GST (and I am glad I did - friends spent months in man hours trying to set up a suitable system to comply with vague untested laws and almost bankrupted themselves.
The figures eBay is providing are probably the gross sales figures, and we all know how little profit that actually represents.
Lots of what I sell is from my basement, and actually sold at a loss over my original cost.
Basically, if you are selling personal property here, it won't be subject to tax (you may be required to prove that it is personal property and not bought to resell). If you are dealing, then you also have figures for outgoings so "how little profit that actually represents" should be reflected in your figures if you keep books appropriately - and most people keep their outgoing expenses accurately (or better).
The GST was brought in to remove the "black economy", unfortunately it increased it. There are a lot of people using Ebay to evade tax because it is so anonymous, so it is no surprise that this is happening. Of course not all information is necessarily accurate that Ebay has - one power seller who uses checkout has encountered 5 ID's with the name Donald Duck on their registrations, and sends all buyers a copy of their "registered" address with his invoice so that he gets confirmation of real names and addresses. The tax department has no chance of finding half of these unless they buy from them - otherwise Donald Duck is going to get hit with a big tax bill when they find him.
Cheers, Kevin (who actually has all his ducks in a row for once)
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SummerBeeMeadow,
There is a certain irony in your signature line on that particular post.
Cheers, Kevin
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I sent the IRS a registered letter, return reciept. The card came back, no signature, no date stamp. So, in my books, it's fiction. Hell if they can't prove who they really are other than threats... than bah screw em.
Anyways, open a new company just for ebay, take the loss for 5 years, by then ebay will be snoring...and like they say forget about it..
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Originally Posted by litlux
The figures eBay is providing are probably the gross sales figures, and we all know how little profit that actually represents.
Lots of what I sell is from my basement, and actually sold at a loss over my original cost.
When the hopeful revenuers do a little basic research, they will likely discover what we all know. The net profits on eBay can be pretty paltry. Most of it goes to listing fees, commissions, Paypal and overhead.
I think the IRS has bigger fish to catch.
Larry
True. But proving it will be impossible for many sellers. Original receipts and such are a necessity when audited.
I've reported my income to the Feds and California since I began. I agree it's not fair that so many sellers cheat on this, but it mirrors the rest of life's taxes. If audited, I'll at least have the records they need!