IRS to Track Online Sellers' Payment Transactions Beginning Next Year

IRS to Track Online Sellers' Payment Transactions Beginning Next Year

Internet sellers who don't report their sales will no longer be under the radar. Starting next year, any bank or other payment settlement company that processes credit cards, debit cards, and electronic payments such as PayPal will have to issue information returns telling the IRS what merchants receive. The new returns are Form 1099-K, Merchant Card and Third-Party Payments.

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Purpose of Reporting
The IRS believes that many online sellers fail to report their transactions. Some don't report because they mistakenly believe that Internet sales are invisible. Others do so because they are trying to evade taxes.

The IRS has found that using information returns, such as W-2 forms for employees, Form 1099-MISC for independent contractors, and Form 1099-INT for bank interest, goes a long way toward improving the reporting of income. IRS computers can match income reported on these information returns with the income reported on tax returns.

Who's Subject to Reporting
All merchants who accept payments through credit cards, debit cards, gift cards and PayPal will receive information returns telling them - and the IRS - the gross amount of the merchant card transactions. This will be broken down month by month. While the form uses the word "card," the IRS has made it clear that this is interpreted broadly to include third-party network transactions (i.e., PayPal).

Read the full article here

I guess it was only a matter of time before the IRS jumped on this bandwagon. The internet has been an easy 'back door' for many people to evade taxes and having to report their sales/purchases, but now it looks like you will be unable to do so any longer once this system is implemented. Obviously people will always find a way around the IRS and their forms but I thought this was worth sharing because it mentions PayPal as one of the third party websites that will be using this system, and as much as a lot of people on ATS hate PayPal, I know that a lot of people still use it nonetheless.

As if the US gov't hasn't destroyed the physical economy enough, the IRS has to come in a destroy the virtual economy as well.

I guess I better delete all my gold on WoW, just in case it is determined to be an appreciable asset. Or not, since the glut of gold spammers has lowered the value. It might be considered a depreciable investment to offset eBay profits.

Seriously though, it was bound to happen sooner than later as internet transactions were as unregulated as any black market or local swap-meet. Ohio has asked for people to claim online and mail-order purchases on the state tax forms for years now, but only to gain the sales tax.

I thank Chris Dodd for his awesome idea of Government tracking online purchases.

Idiot, P.O.S. lifetime politician, selling away our privacies for his own profit.

Go to hell, Dodd.

Haven't they gotten around to taxing the air we breathe? The IRS just has to get there grubby hands on ALL the money, don't they?

It's never enough. They are bound and determined to bleed the turnip of it's blood.

Never mind that turnips don't have blood. They don't care, so long as you are paying up.

The bankers need more money, don't you know? They don't have enough so we must give it all to them.

Effing Scum.

Why do we suffer the machinations of the IRS? It is an illegal scam set up to strip the citizens of their wealth and transfer it to the elite class. It is nothing more than a taskmaster organization that wields a mighty whip and we the the wage slaves with worn bodies and broken spirits.

Abolish the IRS. Life sucking parasites.

reply to post by TheLoony


www.abovetopsecret.com... Here ya go. It didn't get any attention, but... "Project Shelf"

The Shelf Project is a collaboration by professionals in the tax community to develop and perfect proposals that Congress can pull off the shelf when it needs revenue.

Looks like now will be a good time to add a gold & silver payment option to my survival equipment site.

I sure as hell wont be filing any forms with the IRS.

Originally posted by brainwrek
I sure as hell wont be filing any forms with the IRS.

Watch out because they will get you!!!

I wonder what the fine will be if you're found to not be reporting your sales/purchases to the IRS after this is implemented... Like I said in the OP people are always going to find a way around everything, no reason to exclude the IRS coming in and trying to tax us on more things...