July 29, 2008

Big Brother is here.. Why the hell is the IRS going to get the credit card transactions of every American now, thanks to the housing bailout bill?


Things that make you go hmmm...

So, if you have an eBay business and don't report your income to the IRS - those days are over


If you say your income is $50,000 but you spend a lot on credit cards - you better watch it.


If you're a public official using your Visa card to buy hookers and crack, the IRS and the US government will be able to track you down (think Eliot Spitzer)


I'm for cracking down on tax cheats but this is weird. Here's the language. Someone explain to me 1) how the hell this has anything to do with housing? and 2) what is the intention of our fine government?


Payment Card and Third Party Network Information Reporting.

The proposal requires information reporting on payment card and third party network transactions.

Payment settlement entities, including merchant acquiring banks and third party settlement organizations, or third party payment facilitators acting on their behalf, will be required to report the annual gross amount of reportable transactions to the IRS and to the participating payee.

Reportable transactions include any payment card transaction and any third party network transaction.

Participating payees include persons who accept a payment card as payment and third party networks who accept payment from a third party settlement organization in settlement of transactions.

A payment card means any card issued pursuant to an agreement or arrangement which provides for standards and mechanisms for settling the transactions. Use of an account number or other indicia associated with a payment card will be treated in the same manner as a payment card. A de minimis exception for transactions of $10,000 or less and 200 transactions or less applies to payments by third party settlement organizations.

The proposal applies to returns for calendar years beginning after December 31, 2010.

43 comments:

Anonymous said...

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Keith,

This has everything to do with housing. Control the Sheeple by making them think they are wealthy, coax as many as possible into home "ownership" as they will become slaves to debt. Take it all away in forclosure and lost equity. Create the hope that everything will be alright if you just give up some of your rights. Meanwhile big brother gets richer and you get poorer willing to give up anything to get by.

Next Stop...Real ID

RayNLA

Afterthought said...

Because the elite are setting up a modern techno-aristocracy?

The people have lost the spirit of '76.

Our counterparts in the past ran away to America. We have no where to run.

mreynolds said...

Keith

This is directed toward ebayers and those using paypal and its imitators. Remember Bush talking about the wonderful growth in our economy in the ebay market as well as McCain touting it more recently. This is about getting more revenue plain and simple.

HP NAKED SHORTSELLER said...

THE FEDS JUST OPENED UP A BLOGGER WING AT GITMO...

DOPES!!!

keith said...

I think so too - call it the eBay tracking law

It always amazed me how much tax fraud was going on out there thanks to eBay. No way people are reporting their eBay earned incomes. Just like strippers and bartenders.

And that's why I say kill the IRS, and get rid of the income tax. It's not fair, it's a joke, it's unproductive, and it's time for a drastic change.

tangelo mozilo said...

So, I guess I'll be using cash for guns and ammo from now on.

I wonder how the banks feel about this. Good, bad, indifferent? That will determine the bill's ultimate success vel non.

Lamaria said...

It is exactly what it looks like, Big Brother. Its a way to track and control people, maybe they anticipate a greater 'need' to do so in the near future?

You speak of Ebay being a tax loop-hole, but honestly it isn't THAT big. There isn't THAT much going on to suddenly warrant this, and in an unrelated bill.

If Bush brought Ebay up, it was for use as a strawman. To make us think that it is the reason behind this change.

Lamaria said...

Furthermore, the IRS isn't going anywhere so long as we allow the government to continue and operate the way it has. I don't think its (IRS) purpose is entirely what they say it is, it is itself the Big Brother and they are giving it more power.

keith said...

Supposedly 1.3 million people make their living on eBay

And then there's reports like this one:

http://tinyurl.com/yu62yx

IRS urged to go after eBay sellers
Tax experts say online auctions should report users' gross sales

When it comes to paying income taxes, eBay's legions of small-time entrepreneurs are on an honor system in which they are supposed to declare their profits to the Internal Revenue Service. Many users, however, ignore the law or are unaware of their obligation.

Now a growing chorus of tax experts is hoping to crack down on the cheating by requiring eBay -- and other online auctions, such as those on Yahoo, Ubid.com and Amazon -- to track users and report their gross sales to the federal government. Armed with such information, the IRS could better seek any taxes owed, potentially reaping millions of dollars in extra revenue for the U.S. Treasury.



And yes, somehow, this gets put into the housing gambler bailout bill?

Amazing.

Anonymous said...

Maybe the IRS should crack down on Google's Adsense program as well, huh?

How many of those folks are reporting their "correct" income?

keith said...

Even if you make $10 google sends you and the IRS a 1099

eBay and paypal don't do a thing

Massive tax fraud. And that's why you're seeing this new law

Anonymous said...

Hitler and Goebbels say so.

If you don't like it, take some more time and go back to transylvania and stay there.

God Bless America.

Dick Cheney for VP!

Anonymous said...

Cash is King.

Nothing like it.

Catch me if you can.

Anonymous said...

Maybe this will stop the broke, diabetic fat ass dipshits from charging a box of candy at the grocery store?

Anonymous said...

Since I pay my taxes and I absolutely fucking hate all the pieces of shit who don't (I fully support charging tax cheats with treason and summarily executing them), I think this provision rules!

Go get 'em IRS. Chop off their balls!

Anonymous said...

Hmm, people selling software on the internet are not taxed if it all goes over the wire. There is a state tax if you deliver something physical.

So, I'd see this as the first step in preparation for taxing the internet. They can look up the card and find your country of origin. If its in the US then you get the tax. Though, its going to hit ebay users now because its physical delivery. But just a flick of the switch in the future to tax it all.

Saw a poll on cnn,com that had about 76% opposed to the housing gambler bill. Yet, it passes...

6%'S EFFED AGAIN... said...

"Supposedly 1.3 million people make their living on eBay"

SO, 1.3 MILLION PEOPLE JUST TOOK A PAY CUT...

SOME OF THOSE JUST LOST THEIR JOB BECAUSE IT JUST WON'T BE COST EFFECTIVE OR WILL EXPOSE OTHER SCAMS...

SOUNDS LIKE MORE HOMES JUST WENT INTO FORECLOSURE AND MANY OTHERS JUST GOT CHEAPER...

DOPES!!!

Anonymous said...

So if I sell a used guitar on Ebay for $700 and paid $1200 do I get to write off the loss? I only sell thing I don't need and always for less than cost. I am however ready to stop doing that because of the rising fees and start using Craigslist.

Anonymous said...

Let's say you bought a laptop for $1,200 and sold it two years later for $400. Why should you have to pay income tax for the $400 when you lost $800 on the transaction? Big government is a blood-sucking leech feeding on the host.

Eric Ogunbase said...

Well someone has to pay for the Drunken Housing Bill. Might as well start with the small time "tax cheats". For all you who think this doesn't affect you, just wait:

When the Nazis came for the communists,
I remained silent;
I was not a communist.

When they locked up the social democrats,
I remained silent;
I was not a social democrat.


When they came for the trade unionists,
I did not speak out;
I was not a trade unionist.


When they came for the Jews,
I remained silent;
I wasn't a Jew.


When they came for me,
there was no one left to speak out.

-Martin Niemoller

Anonymous said...

It sucks to live in a failed Libertarian state.

Anonymous said...

Actually this isn't new. Al Capone's first time in prison was for tax evasion, not the murders and illegal activities he was engaged in. On a more recent note, the FBI would go after Mafia figures in the 70s, 80s and 90s on tax invasion by comparing their lavish lifestyles to the rather paltry income they reported on their tax forms.

Arkad said...

Read up on RFID tag technology. Soon everything you do will be trackable, even good old greenbacks.

Devestment said...

I have 3 years clean off credit and debit cards. I only use cash. Cards are and have always been a violation of my privacy.

Cards give me a false sense of economy. It does not FEEL like I am spending money so I act irresponsibly.

Since giving up cards, I have more money left over at the end of the month.

Try it, what have you got to loose?

Devestment said...

Oh, and by the way. The ebay gold rush is over. Its downfall was the implementation of the board of directors. Their fees are too high and their policies favor buyers. I no longer sell much on there, it is easier and MUCH CHEAPER to use fixed price sites. Regulating eBay will put the final nail in the coffin. SHORT EBAY, its junk. Also, did you read about Googles competition from inside, its junk too.

LibVet said...

Your life online is an open book. That's a fact.

If you are out and about in America, you are on camera several times a day.

News cars incorporate a "black box".

Scanners at the airport can see what you look like naked.

The list goes on and on.

Frank@Scottsdale-Sucks.com said...

And that's why I say kill the IRS, and get rid of the income tax. It's not fair, it's a joke, it's unproductive, and it's time for a drastic change.

Agreed. You wouldn't believe the amount of time I have to waste on this sh*t every year, then mail off a big fat check, which is going to get fatter under The Obamessiah.

We need a consumption tax if only to get rid of the time and money wasted on compliance. As a business owner, that would be no different and no more difficult than depositing state sales tax into the system.

And consumers would have to do *nothing.*

Of course the NAR is lobbying heavily against the FairTax because they'd lose their beloved mortgage deduction, which they love to talk about to no end, as if spending a dollar to get .30 back is smart....

Anonymous said...

Payment settlement entities, including merchant acquiring banks and third party settlement organizations, or third party payment facilitators acting on their behalf, will be required to report the annual gross amount of reportable transactions to the IRS and to the participating payee.

So if I pay someone privately through PayPal.com or GoldMoney.com the transactions have to be reported? This is very Big Brother!

It's been said before. It needs to be said again. The ONLY way to fix the system is to throw out the people running it.

#1
Walk into the voting booth

#2
Don't think. Don't read up on the candidates. Don't research anything. Just throw out every incumbent on the ballot. If they have served 1 term. They're OUT.

#3
Repeat next election. And every election subsequent. After a while, the garbage in the system will be flushed. And regular people can serve their one term in office. That should be national service. EVERY person in the country gets to serve 1 term in office. No matter what their income. No matter what their connections.

WALK INTO THE VOTING BOOTH. PULL THE LEVER. FLUSH THE TOILET

Anonymous said...

Keith,

I think this is a tactic to also go after everyone who buys out-of-state online/mailorder, and doesn't report the purchase, thus the tax they're supposed to pay.

Anonymous said...

Here in Canada the same thing is happening - "The Canada Revenue Agency has won a Federal Court order requiring eBay Canada Ltd. to turn over the names, addresses, phone numbers and e-mail addresses of all high-volume sellers on the popular website. The CRA wants to find out whether those individuals or companies are reporting the income they made from online sales in 2004 and 2005."

http://tinyurl.com/6yftta

keith said...

People, people, people, you truly can't be THIS ignorant of US tax law, can you?

No, if you buy a widget for $100 and sell it for $50, you don't have to pay taxes on the $50.

But if you buy a widget for $50, and sell it for $100, of course you have to treat the $50 gain as income (offset against any losses).

The problem with eBay isn't people selling their old garbage at a loss.

The problem is professional eBayers thinking they don't have to pay income taxes on their gains.

And the bigger problem is the US tax code, which is a total and complete joke.

Throw it away, start over, and go with a consumption tax.

Strippers, bartenders, realtors and eBay power sellers should pay taxes, just like the rest of us.

Anonymous said...

The Fed's are after Boring Ben's followers with this credit card move. They wanna know who is giving him money because his daily articles about the housing holocaust are devastating the U.S economy and terrifying little children.

If you've ever donated to a housing blog, you should be very afraid. Get a passport if you don't have one already. You might also want to store food, water, ammo, and condoms. And RENT a mountain retreat. No since buying one at these prices.

Keep your heads down. I'll be posting as anon from here on out. I'd suggest you do the same. You can't be too careful.

Anonymous said...

So, r u saying that I should not use my credit credit card to pay for my gay black shemale twin porn?

BoiseBoomer said...

Keith,

Some people don't have any reason to know anything about tax law as it pertains to profit and loss of goods sold - they earn W2 wages and pay taxes based on AGI.

BTW, how do Realtors avoid paying taxes? Do they receive $10,000 in crisp $100 bills at closing?

Anonymous said...

Smoke and mirrors.

They really want to know what you are eating and drinking and whether or not you are a smoker.

Think about how that ties into the benefits you may or may not receive when health care is socialized.

Anonymous said...

"Many users, however, ignore the law or are unaware of their obligation."

I like how they word taxes as - an obligation - like bending over and getting it in the rear is an - obligation - or bailing out housing is an -obligation- or bailing out Iraq is an - obligation - .

They can take their obligation and stick it where the sun does not shine. Basically the solution to this one is to simply use checks and cash. Granted, checks are traceable, but they certainly are not as electronically trackable on a large scale like plastic. The more the Guberment tries to control people, the more I think this country gets closer to the days when bartering, gold, cash (or whatever hard currency exists) will be used by every day people. The Patriot act made it less desirable to use the phone, and now this will make plastic less desirable. Let the lemmings static the air and information systems with their calls and purchases. I for one will be the one "off the grid" and making money/spending it without having to -obligate myself- to the oppressive masters in the Whitehouse.

Agent 99 said...

The IRS (US Treasury)is going after credit card transactions (creditors) because then can. What are Americans going to do, tear up their credit cards??? It's all they have left.

Again, why can't we organize a Boston Tea Party?

Anonymous said...

eBay Power Seller here. The more intelligent Power Sellers among us pay our taxes. You have no idea how many eBayers this one thing will shake out, and create tremendous opportunity for those of us who report. I'm looking forward to handing out fliers among my competition that they had better report or go to jail. This will scare them away and I will make more and pay more in taxes.

The problem with selling a guitar for $400 after you paid $1000 is that you have to PROVE your cost basis. Most people cannot, because they don't think to save proof of what they paid when they bought it. Otherwise, it is income. Yes, they are trying to either force you to justify with more paperwork or get taxed multiple times for the same crap.

Second, they have been waiting for this opportunity for years. They had to sneak it into something that was sure to pass, like this bill. Right now, everyone is pissed at eBay because of the mistakes they have made, so the army of sellers that would have come to its aid will not act.

This is just a first step. They will pimp this out to the states to get more out of state sales taxes. Research "streamlined sales tax." And it will get much worse than that.

Note the deminimis exception: $10,000 or 200 transactions. So, more than garage sale stuff - but also note that it IS NOT INDEXED for INFLATION. At current inflation rates, $10,000 becomes $5000 in 4-5 years. So more commerce will be brought in over time. Also note that the IRS wants broad authorization to justify snooping "as required", which may also be passed to other agencies.

Lastly, this affects anyone owning a small web business that gets paid with credit cards, not just eBay. Since many of these businesses, as well as Ebay Power Sellers, are not economic businesses when they have to pay taxes, THEY WILL CLOSE UP SHOP. It is a tremendous boon for me, but unemployment will soar and spending will drop because trade will be curtailed. You have no idea how much of the economy is now driven by eCommerce, because eCommerce is largely untaxed. This is one of those cash cows these greedy morons have been drooling over for a long time. Remember, it's not just that they want people to pay what they should under existing law, it's a way to generate new tax revenue streams.

In the end, this will lead to a dramatic reduction in freedom in this country. Massive databases WILL be created. It's one more step on the Fabian Freeway.

Action to take: sell your extra crap NOW, before these databases are up and running. And secondly, buy eBay Jan 09 puts on the next Nasdaq rally. Do NOT short Amazon - it may weaken, but not as much as eBay.

This quote best sums it up:

When the Nazis came for the communists,
I remained silent;
I was not a communist.

When they locked up the social democrats,
I remained silent;
I was not a social democrat.


When they came for the trade unionists,
I did not speak out;
I was not a trade unionist.


When they came for the Jews,
I remained silent;
I wasn't a Jew.


When they came for me,
there was no one left to speak out.

-Martin Niemoller

BoardMemberFedReserve said...

You people are very well informed and intelligent. Not!

Mike Hunt said...

Hmmm, the gov't never makes it a big point to reduce the consumption and expenses do they? Just go after more revenue.

I suggest limiting the health care of gov't workers retirees and a reduction of pension benefits to help us through this crisis.

-Mike

Anonymous said...

I earn some money through ebay and I report it and pay taxes on it every year. It's infuriating to know that some of my direct competition does not. There should be a means of reporting, but I don't think this regulation is it.

Anonymous said...

Agent 99 said...
The IRS (US Treasury)is going after credit card transactions (creditors) because then can. What are Americans going to do, tear up their credit cards??? It's all they have left.


---------------------------

RIGHT! Its all they have left, which means that the result of this bailout bill is going to sink main street into a real DEPRESSION as the middle class gets killed paying higher taxes for this banker bailout.

As a business owner, I see the handwriting on the wall. Look's like I'm going to take an early retirement starting in 2011.

Anonymous said...

Strippers, bartenders, realtors and eBay power sellers should pay taxes, just like the rest of us.
==========

HUH? Bartenders pay taxes dude. Unless it's some small mom and pop operation, bartenders are taxed based on the bar's revenues. In some cases bartenders and wait staff end up paying more tax than they should if they have a bad week/month of tips.

Get a clue man.