Coming Soon To eBay: The Taxman

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Coming Soon To eBay: The Taxman
By William P. Barrett
March 18, 2009
Forbes.com

Are you a spare-bedroom merchant? Time to start reporting sales to the IRS.

With the economy worsening, more and more people are likely trying to make ends meet by selling goods via eBay, Amazon.com, Google Checkout and other online services. The Internal Revenue Service is fixing to wield a big new weapon to get its cut.

Desperate to generate revenues by narrowing the "tax gap" (and at the urging of the Bush administration), Congress last year passed legislation requiring processors of third-party payments and settlements--mainly payment card companies and services like Paypal--to report to the IRS individuals and business entities that receive at least $20,000 a year in credit- or debit-card charges from 200 or more transactions. The mandatory reporting, buried in the Housing Assistance Tax Act of 2008, would begin in 2011.

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