January 1 could be interesting thanks to congress.

[Brian Van Horn]

Just going over the pros and cons. First, there is progress. Then there is congress.

Ah, the 1099-K reporting of kicking in on 1/1/2023 for 1/1/2022. This is if your item sold for more than $600.00. If you don't have an original receipt/proof of purchase, you get a 1099-K with more due in taxes even if you lost money because you can't show the loss on paper. Still, we have congress that passed this last year. Slow clap.

https://www.youtube.com/watch?v=92sX4kS5XNQ

Congress does something in a week? That's a good one. Still, there is a chance. About the same as a three-legged horse winning a race.

Have to wonder how creative the reporting is on final auction prices by consignors who paid cash on their original transactions.

Yes, I am aware of the previous discussion of this topic:

https://www.net54baseball.com/showth...ighlight=1099K

Happy Holidays!

[Brian Van Horn]

Bonus:

https://www.youtube.com/watch?v=Ou2kXK7tHKc

[theshowandme]

Talk to your CPA and do not listen to influencers on YouTube

/thread

[90feetaway]

Wondering if this influenced the number of sellers and sales on eBay this year?

[Jason19th]

The IRS is not coming for us. Everyone need to calm down. The law has not changed. It was always our responsibility to account for our sales and profits. The IRS is not going to assume that we bought all of our cards for zero. They are not going to second guess reasonable valuations and expenses. They don’t have the time for this for people who are getting a couple of 1099’s. Now that may be different for people with hundreds of thousands in sales. But those people are running businesses and should be held to the standard of people who run businesses.

[bobbyw8469]

Originally Posted by Jason19th

The IRS is not coming for us. Everyone need to calm down. The law has not changed. It was always our responsibility to account for our sales and profits. The IRS is not going to assume that we bought all of our cards for zero. They are not going to second guess reasonable valuations and expenses. They don’t have the time for this for people who are getting a couple of 1099’s. Now that may be different for people with hundreds of thousands in sales. But those people are running businesses and should be held to the standard of people who run businesses.

It's a nightmare for the casual seller. I guess they want to set up at my next yard sale as well.

[Keith H. Thompson]

that my sales are entirely from my personal collection acquired fifty years ago, and it bothers me that I have to pay taxes, even though I understand why the eBay platform requires it. But, I solved this problem by simply taking my 1099-G to my tax accountants and let the chips fall where they may. And some of them fall pretty hard and leave dents.

[Exhibitman]

Bogus. False. Complete BS hyperbole. We've been over this before but apparently some people aren't paying attention.

First of all I have dealt with IRS and state auditors. You do not need paper proof to prove basis. Testimony is evidence. I've had clients face down the IRS with direct testimony. I paid $500 for a Warren Spahn card that I sell for $1,000 on eBay and I get a 1099, I report it as such and that will stand up in a court or in an audit. The only things you absolutely must have receipts to prove on your personal return are charitable deductions.

Second, all a 1099 does is alert the IRS that you received money, not net income. I get them every year in the millions because any payment to an attorney is 1099'd and any settlement money paid to an attorney's trust account is 1099'd, all under the law practice's tax ID. The settlements and my deductible costs and the proceeds all are flushed through on my tax return and never hits my net income.

The people panicking over this are worrying about nothing, unless they are tax cheats who didn't intend to declare their incomes from card transactions. Don't do that. Just pay your taxes. If you made huge profits, be happy you did. Profits are a nice problem to have.

[BobC]

Adam, and others, are on the money. We've talked about this before, and my fingers have come close to falling off with all the typing I've done in answering questions for people about taxes and the potential implications they may face. just look at the thread Brian (the OP) linked to in the opening post.

To directly respond to Brian/OP, even if you don't have a receipt for an item(s) you sell that gets reported to you on one of these 1099-K forms for this past year, you still want to at least reasonably estimate what you paid for the item and show it as a deduct against the price you got from selling it, and thus properly determine if you had net income/capital gain, or a net loss/capital loss, from the sale. As Adam/Exhibitman stated, the IRS is not completely unreasonable, and they realize you must have paid something for the item you sold. If you do the best you can to at least reasonably try and remember and report what you may have paid for things you bought for cash years ago, most IRS agents will give you some benefit of the doubt and work with you. But that would only come into play if the IRS came back and actually wanted to audit your card sales reported on your tax return. And the chances of someone just doing some side sales, and not really a full-time card dealer, being audited are really remote. That is as long as you remember to not ignore these 1099-K forms you may now get, and be sure to properly report them on your tax return. Failing to report them on your tax return, or screwing up how and/or improperly reporting your sales activity on your return, are what will get you noticed by the IRS, and significantly increase your chances of actually being audited by them and maybe needing that supporting documentation you may not have 100% of.

And don't forget, just because you get a 1099-K form reporting sales you made during the year, that doesn't automatically mean you are in an actual business and have to report and file your card sales on federal Schedule C - "Profit or Loss From Business". I've said this numerous times on the forum now, for people who buy and sell cards you can actually end up being treated as one of three different and distinct types of taxpayers in that regard. You can be treated/taxed as a collector/hobbyist, as an investor, or as a seller/dealer actually in business. And honestly, to be even potentially more confusing, you can actually be more than just one single type of taxpayer in regard to selling cards, all at the same time. You can be a dealer who has inventory that you sell as a business, then a personal collection you keep for yourself, along with another group of cards/items that you acquired strictly for long-term investment purposes. The trick is to segregate the cards that fall into each of these different areas/categories, and be sure to properly document and record which is which if ever asked and you have to prove it to an IRS agent.

Rather than going into this in more detail, I've already written numerous posts on this and other related tax topics and issues here on Net54. Best thing to do is to go to the search function, look under Advanced Search, and type in my handle, BobC, and look for any posts I've made. Then just peruse the list of threads that come up and look for those that look like they may have something to do with taxes (sales, income, etc.) or reporting (1099s, IRS, etc.). Even some of the threads about "vaults" delved into tax implications and issues. Then just look through them for my posts. Not necessarily the most efficient way to go back and read a lot of what I've said already in regard to our hobby and taxes, but the best I can do. Wish there was a simple/easy way I could go back and somehow accumulate all my tax related posts in one place that people could then use as a resource. Or, just ask direct/specific questions on here or through PMs even. Have had several people doing that as well. There are also some other tax/CPA people on the forum that can feel free to chime in.

As always, if you are uncertain or uncomfortable with what you may need to do in regard to your taxes when it comes to your hobby/dealer activity, I've always advised talking to a local, qualified, tax professional for assistance and advice. Every single person/taxpayer's tax situation is going to be unique, and I am giving a lot of more generalized information. Still hope this helps.

[BobC]

Whatever you do though, do not ignore any 1099-K form(s) you may get. If it is not reported on your tax return, you WILL get contacted by the IRS. Even if you didn't actually have a taxable profit/gain from cards you sold.

[mrreality68]

Great information

Thanks and appreciated

This is where the CPA’s make their money

[BobC]

Originally Posted by mrreality68

Great information

Thanks and appreciated

This is where the CPA’s make their money

Correction Jeff, this is where they EARN their money!!! LOL

[nwobhm]

Originally Posted by Exhibitman

Bogus. False. Complete BS hyperbole. We've been over this before but apparently some people aren't paying attention.

First of all I have dealt with IRS and state auditors. You do not need paper proof to prove basis. Testimony is evidence. I've had clients face down the IRS with direct testimony. I paid $500 for a Warren Spahn card that I sell for $1,000 on eBay and I get a 1099, I report it as such and that will stand up in a court or in an audit. The only things you absolutely must have receipts to prove on your personal return are charitable deductions.

Second, all a 1099 does is alert the IRS that you received money, not net income. I get them every year in the millions because any payment to an attorney is 1099'd and any settlement money paid to an attorney's trust account is 1099'd, all under the law practice's tax ID. The settlements and my deductible costs and the proceeds all are flushed through on my tax return and never hits my net income.

The people panicking over this are worrying about nothing, unless they are tax cheats who didn't intend to declare their incomes from card transactions. Don't do that. Just pay your taxes. If you made huge profits, be happy you did. Profits are a nice problem to have.

If it’s all just false BS then why was it lowered to $600?

Not saying you’re wrong… certainly not saying you’re right either. Whole lotta experts running their mouth yet it hasn’t happened yet.

Only way to know what will play out is watching it happen. When has trusting that .gov has nothing but honorable intentions played out well?

Just sayin’….

[JustinD]

Meh, I think being excited about January is a bit of a waste of thinking time.

A divided government is is good for the economy as neither collective can pass stupid programs. Nothing honestly soothes the panic of investors like gridlock.

However, reversing previous poor policy takes more than the House. It is far more stepped process, I would not hold my breath as you likely will see nothing on that front until a new administration.

Those 1099s are not disappearing.

[Snowman]

While this isn't a story specific to selling cards, I was audited by the IRS before and can share what that experience was like for me.

Back when I played poker professionally, I used to get all sorts of random 1099s of various types. I would back other pros as well, and taxes were always complicated as nobody has receipts for any of that stuff. Particularly the agreements between players where they "piece swap" percentages of each other in tournaments (it's common practice for pros to exchange say 5% or 10% of each other to decrease their variance, or to back other players' entire entry fees). I got audited one year by the IRS for my poker winnings, and I had a sizeable 1099 that I had to explain. The agent I dealt with just required me to get a notarized statement from the other player that said the proceeds were from gambling and that the winnings were split between us. It wasn't the nightmare everyone had warned me it would be, but it was a lot of work digging up documents. I'd prefer not to have to do it again though.

Also worth pointing out is that while they did lower the reporting threshold, assuming it stands, that doesn't mean they're coming for you over $600 worth of earnings. Audits are not random. They use machine learning algorithms to flag high-risk returns. Having a few hundred or even a few thousand or probably even ten thousand dollars worth of eBay sales is not going to flag an audit. And if you're doing 6-figures worth of eBay sales, you should be keeping some pretty damn good records already, and should probably have a business license.

[Fred]

Well, I guess when we're dead it won't matter because we won't have to deal with it, however our families will be stuck trying to figure it all out.

I don't know about the rest of the collecting community but I haven't kept a log of every purchase and how much I paid for things, but then again a lot of the stuff that I have was purchased years ago so proof of how much I paid probably wouldn't offset the profit anyway.

It'd be nice if the government would just stay the phuc out of my hobby, but I can understand that this has transcended beyond just hobby status.

Does anybody know where the $600 level came from? That's just absurd.

[sreader3]

Originally Posted by Exhibitman

First of all I have dealt with IRS and state auditors. You do not need paper proof to prove basis. Testimony is evidence. I've had clients face down the IRS with direct testimony. I paid $500 for a Warren Spahn card that I sell for $1,000 on eBay and I get a 1099, I report it as such and that will stand up in a court or in an audit. The only things you absolutely must have receipts to prove on your personal return are charitable deductions.

Why should one not worry about the situation you are describing where deducting basis from the revenue shown on the 1099 triggers an audit and forces one to pay an attorney and testify to prove one's innocence? That sounds like a nightmare. Except for the attorney.

[Snowman]

Originally Posted by nwobhm

If it’s all just false BS then why was it lowered to $600?

Not saying you’re wrong… certainly not saying you’re right either. Whole lotta experts running their mouth yet it hasn’t happened yet.

Only way to know what will play out is watching it happen. When has trusting that .gov has nothing but honorable intentions played out well?

Just sayin’….

I think they're just trying to force more people to report earnings. Telling us to report something is one thing. Auditing us for it is another. I'm sure this whole mess will lead to *some* additional audits, but they're still going to go after the higher earners first when making determinations about who to audit. If the only thing you have to report from 2022 is $60,000 from retirement earnings and $1300 from eBay, I promise, you're not getting audited.

That said, this program is still BS for so many reasons. What a trainwreck. Sometimes I hate my own party. This is one of those times.

[soxinseven]

Originally Posted by bobbyw8469

It's a nightmare for the casual seller. I guess they want to set up at my next yard sale as well.

It's not a new development for some of us. Massachusetts and some other states have been doing this since 2017. Seems like it's pretty much nationwide now, with a few exceptions I'm sure.

[Exhibitman]

Originally Posted by Fred

Does anybody know where the $600 level came from? That's just absurd.

It is the same 1099 threshold that businesses have been dealing with for decades. Under that is considered a small enough figure not to bother with. All they did was extend it to these transactions.

[Exhibitman]

Originally Posted by nwobhm

If it’s all just false BS then why was it lowered to $600?

Not saying you’re wrong… certainly not saying you’re right either. Whole lotta experts running their mouth yet it hasn’t happened yet.

Only way to know what will play out is watching it happen. When has trusting that .gov has nothing but honorable intentions played out well?

Just sayin’….

It wasn't just lowered. $600 has been the figure business reporting starts at for many years. The initial 1099 expansion was $20K. It has been phased in to eventually match the business threshold.

Don't get me wrong; I would rather they get rid of 1099s altogether. They are a PITA for my bookkeeper every January. They are not a reason to worry if you pay your taxes because all of the questions will flush out in the return.

[Exhibitman]

Originally Posted by sreader3

Why should one not worry about the situation you are describing where deducting basis from the revenue shown on the 1099 triggers an audit and forces one to pay an attorney and testify to prove one's innocence? That sound like a nightmare. Except for the attorney.

Now that is a textbook case of catastrophizing. The IRS audits roughly 0.3% of returns (3 of every 1000). The IRS initiates criminal investigations against fewer than 2 percent of all American taxpayers. Of that number, only about 20 percent face criminal tax charges or fines. Yet 1099s go out by the hundreds of millions. Getting a 1099 and reporting your income and expenses based on it does not trigger an audit. Not reporting anything is more likely to trigger one. All the 1099 does is give the iRS computer a baseline to test the return against. if an anomaly comes up, the IRS asks questions. It may be as little as a letter informing you that there is a discrepancy that you need to address. I've gotten a few of those and have cleared them up pretty quickly with the help of my CPA or my firm payroll processor.

[nwobhm]

Originally Posted by Exhibitman

It wasn't just lowered. $600 has been the figure business reporting starts at for many years. The initial 1099 expansion was $20K. It has been phased in to eventually match the business threshold.

Don't get me wrong; I would rather they get rid of 1099s altogether. They are a PITA for my bookkeeper every January. They are not a reason to worry if you pay your taxes because all of the questions will flush out in the return.

It was lowered from $20k to $600 to match businesses. Truth is it should have been raised on the business side up to $20k. Any move made by the IRS on reporting comes with intent. They want more $. Who’s $ is the question IMHO. A lot of $ moves between $600 and $20,000….

[raulus]

Originally Posted by Exhibitman

Now that is a textbook case of catastrophizing. The IRS audits roughly 0.3% of returns (3 of every 1000). The IRS initiates criminal investigations against fewer than 2 percent of all American taxpayers. Of that number, only about 20 percent face criminal tax charges or fines. Yet 1099s go out by the hundreds of millions. Getting a 1099 and reporting your income and expenses based on it does not trigger an audit. Not reporting anything is more likely to trigger one. All the 1099 does is give the iRS computer a baseline to test the return against. if an anomaly comes up, the IRS asks questions. It may be as little as a letter informing you that there is a discrepancy that you need to address. I've gotten a few of those and have cleared them up pretty quickly with the help of my CPA or my firm payroll processor.

Don’t forget all the new funding for the IRS to help catch tax cheats.

https://www.cnbc.com/amp/2022/08/31/...happening.html

[Shoeless Moe]

Originally Posted by raulus

Don’t forget all the new funding for the IRS to help catch tax cheats.

https://www.cnbc.com/amp/2022/08/31/...happening.html

All the new hires will be investigating all the people who got PPP loans. You think they care about people selling a few thousand dollars worth of stuff on Ebay when they can get the bigger fish?

[Brian Van Horn]

Question for Exhibitman (Adam) and Bob C.

Is there still any argument/grounds for reporting under 1099-B?

[BobC]

Originally Posted by nwobhm

If it’s all just false BS then why was it lowered to $600?

Not saying you’re wrong… certainly not saying you’re right either. Whole lotta experts running their mouth yet it hasn’t happened yet.

Only way to know what will play out is watching it happen. When has trusting that .gov has nothing but honorable intentions played out well?

Just sayin’….

You are confusing and mixing different things up. The BS Adam was referring to had to do with the response he was making to some about the IRS coming after them, about having to pay tax on the total amount of a 1099 they receive and not being able to deduct what they paid for the items they sold, and about the IRS not realizing you may not always have a receipt for cash purchases and not allowing a taxpayer to estimate what they may have paid and be able to deduct it.

The lowering of the reporting threshold to $600 is a completely different and separate issue. And I've gone into that and explained to everyone on this forum before the real reason behind the lowered $600 threshold. In an earlier post I suggested doing a search of all my old tax related posts in numerous other threads, to find where I've already explained this in great detail. The Cliff Notes version is that the reduced reporting threshold to $600 for 1099-K forms is so that it aligns and agrees with the same reporting threshold that already for years was being required for people/businesses filing 1099-NEC and/or 1099-MISC forms to report the amount of non-employee (independent contractor) compensation they may be paying someone, or some unincorporated business, they hire to do something for them. The problem the government (not the IRS) realized is that a lot of people started paying these individuals and unincorporated businesses through platforms like Paypal, and weren't always properly sending in the appropriate 1099 forms to report this income they were paying them. Remember, it is Paypal Goods and SERVICES. The lowered threshold was to get after the SERVICES side of such Paypal and other third-party platform payments, to make sure the IRS was being informed about them. The lowered threshold wasn't primarily to get after people selling stuff on Ebay, it was to get after the people not reporting payments they were making to those doing work for them that aren't their employees. Unfortunately, payment platforms like Paypal don't differentiate between Goods (like things being sold on Ebay) and Services (payments made to a non-employee for work they do for you). So, the government in fixing the reporting threshold for service payments so it is consistent across all the different types of 1099 reporting that may be required, unfortunately ended up affecting the reporting of sales of goods as well. If you have any suggestions you can give the government, Paypal, or anyone else involved in this, how anyone can easily and without a ridiculous amount of work and effort, differentiate and segregate the reporting threshold of these third-party payment platforms so they would only apply the $600 threshold to just non-employee payments for services through them, while at the exact same time leaving the threshold for payments for goods through them at the old $20,000 level, I bet they'd be all ears. Good luck in that though

There are no real bad intentions here, the government was just trying to make the reporting requirements consistent across all the different 1099 forms. The real villains are those that have abused the system and law by not properly reporting like they were supposed to all along. Faced with our government having to pay the bills, would you rather our government enact and add even more taxes we have to pay, or, would you rather they actually start getting after those people and businesses that aren't reporting all their income and properly paying their taxes?

[BobC]

Originally Posted by sreader3

Why should one not worry about the situation you are describing where deducting basis from the revenue shown on the 1099 triggers an audit and forces one to pay an attorney and testify to prove one's innocence? That sound like a nightmare. Except for the attorney.

C'mon, are you really being serious?!?!?!

Reporting what you have received as gross income/revenue, as shown on a 1099 you receive, and then deducting the expenses and costs you had in acquiring the items you sold, and/or other costs involved in marketing and selling them, are NOT going to trigger an audit by the IRS. Do you really not believe the IRS knows the 1099s only report the gross amount someone receives, and that in virtually almost every instance that does NOT reflect the actual taxable net income or taxable net gain someone ends up with and that they actually owe tax on? You do not pay and owe taxes on gross income/revenue, you due owe it on net taxable income/revenue.

The IRS is not stupid and looking to create even more senseless work for themselves. They have Congress and the rest of the government to do that for them.

[BobC]

Originally Posted by nwobhm

It was lowered from $20k to $600 to match businesses. Truth is it should have been raised on the business side up to $20k. Any move made by the IRS on reporting comes with intent. They want more $. Who’s $ is the question IMHO. A lot of $ moves between $600 and $20,000….

Look at what I said in post #27. Had people not been using Paypal and other third-party payment platforms to pay people for services, and only just for goods they were buying, chances are the $20,000 and 200 transaction thresholds for reporting the sales/proceeds from goods sold would still be in place.

[sreader3]

Originally Posted by Exhibitman

Now that is a textbook case of catastrophizing. The IRS audits roughly 0.3% of returns (3 of every 1000). The IRS initiates criminal investigations against fewer than 2 percent of all American taxpayers.

Like you I had a legal practice for many years and got many 1099s. I suppose practicing law for 25+ years made me an expert at "catastrophizing." But I would say for good reason. I don't like this 1099 expansion one bit. Perhaps, as you say, the IRS in the recent past has only audited 0.3% of returns. However, past is rarely prologue. The Orwellian-named "Inflation Reduction Act" just added funding for thousands upon thousands of new IRS auditors (we can argue about the exact number). So we can all safely chuck that 0.3% number out the window. Yes, this new regime will result in some incremental revenue to the feds from tax cheats. However, it will come at a nontrivial cost in terms of time, cost, effort and worry to non-cheats. There are almost never solutions. There are only trade-offs. The feds are encroaching on new turf. Everyone should admit that.

Let me add that I enjoy your blog. Thanks for starting that.

Edited to add: Same comments to Bob C. Yes I am serious. I am very concerned about federal encroachment. I do not place unqualified trust in federal authorities, although I know many good people who work for the federal government. Neither did our founders repose trust in centralized authority. Apparently you are not as concerned, which is your right. It is still a free country.

[BobC]

Originally Posted by Brian Van Horn

Question for Exhibitman (Adam) and Bob C.

Is there still any argument/grounds for reporting under 1099-B?

Hey Brian, not sure what the exact question is you are asking. What do you mean by "Is there still any argument/grounds for reporting under 1099-B?"

A 1099-B is used to report your broker and barter transactions to the IRS. Typically, the most common use for these is when you sell some stocks you own in a personal investment account, not in a 401K, IRA, Roth, or other specialized retirement type account. These reporting requirements are still there and in place, and every investment firm you work with that handles stocks and investments for you is required to send these 1099-B forms to the IRS, and you, to show the gross amount you received from the sale of your stocks/investments every year. You typically then report these on Schedule D of your personal income tax return, along with related forms 8749, and also have to report and deduct your basis (what you originally bought the stock for), along with any additional costs of sales, from the gross proceeds you received from selling that stock in determining your net taxable capital gain (or loss) from their sale.

https://www.irs.gov/pub/irs-pdf/f1099b.pdf

https://www.irs.gov/pub/irs-pdf/f1040sd.pdf

https://www.form8949.com/form-8949.html

https://www.irs.gov/instructions/i1099b

By the way, the 1099-B form is for reporting broker and BARTER transactions. As I've said on the forum before, technically, when you do a card trade with someone, that is a barter transaction, and you are technically supposed to report and pay taxes on any relevant net income or net gain you may have realized from the trade. Now the actual requirement to file a 1099-B form falls on the Barter Exchange through which the parties to the barter transaction operated and handled the exchange through. So, you and someone you make a card trade with don't personally have any obligation or need to worry about preparing and sending in 1099-B form to the IRS. But just so everyone knows, you are supposed to be treating such trades as possibly taxable sales transactions. A Barter Exchange is a formal group/organization that keeps track of trading activity between members and has actual accounts they keep for them. Similar to how an investment firm keeps an account for their clients and tracks their stock and other investment activity for them.

And before anyone wonders if Net54 could ever be considered a Barter Exchange, because it does act as a platform and help to facilitate trades amongst it's members, rest assured that is not the case. There is no fee paid to join and use Net54, nor does Net54 track and keep records of member's trading activities and account for them and the values of the items they are trading.

Not sure if this covered what your original question might have been. If not, can you be a little more specific on what you are asking about or for? Thanks, hope this helps.

[jamest206]

Plenty of opportunities for deferments, don’t forget that fellas. I won’t file until October and am not worried at all about this. I will have everything lined up as well.

[G1911]

Originally Posted by sreader3

Like you I had a legal practice for many years and got many 1099s. I suppose practicing law for 25+ years made me an expert at "catastrophizing." But I would say for good reason. I don't like this 1099 expansion one bit. Perhaps, as you say, the IRS in the recent past has only audited 0.3% of returns. However, past is rarely prologue. The Orwellian-named "Inflation Reduction Act" just added funding for thousands upon thousands of new IRS auditors (we can argue about the exact number). So we can all safely chuck that 0.3% number out the window. Yes, this new regime will result in some incremental revenue to the feds from tax cheats. However, it will come at a nontrivial cost in terms of time, cost, effort and worry to non-cheats. There are almost never solutions. There are only trade-offs. The feds are encroaching on new turf. Everyone should admit that.

Let me add that I enjoy your blog. Thanks for starting that.

Edited to add: Same comments to Bob C. Yes I am serious. I am very concerned about federal encroachment. I do not place unqualified trust in federal authorities, although I know many good people who work for the federal government. Neither did our founders repose trust in centralized authority. Apparently you are not as concerned, which is your right. It is still a free country.

+1. The IRS expansion plans are to more than double its workforce. It seems clear that they will be coming after as many people for as many things as possible for as much money as possible. Our tax system is a pain in the rear for people who don't specialize in it; do anything wrong in the process made to be as convoluted as possible and they get to take more from you. I understand many here like this, but it seems very difficult to see how it isn't clear they will be targeting to get as many people as they can. That's the entire point of doubling in size, to route more money to the state and away from the citizens. There is an extremely long history of the IRS coming after low and middle class people for trivial things.

[sreader3]

Originally Posted by G1911

+1. The IRS expansion plans are to more than double its workforce. It seems clear that they will be coming after as many people for as many things as possible for as much money as possible. Our tax system is a pain in the rear for people who don't specialize in it; do anything wrong in the process made to be as convoluted as possible and they get to take more from you. I understand many here like this, but it seems very difficult to see how it isn't clear they will be targeting to get as many people as they can. That's the entire point of doubling in size, to route more money to the state and away from the citizens. There is an extremely long history of the IRS coming after low and middle class people for trivial things.

+2. Thank you.

[nwobhm]

Originally Posted by BobC

Faced with our government having to pay the bills, would you rather our government enact and add even more taxes we have to pay, or, would you rather they actually start getting after those people and businesses that aren't reporting all their income and properly paying their taxes?

Thankyou for that information. That wall of text tells me all I needed to know. .gov NEVER changes anything to make it easier…. NEVER. Seriously, great read.

An easier simpler way is eliminate taxation completely…. Except consumption. As in if you eat/drink it it’s taxed. Fat people won’t exist in a generation and illegal immigration goes away immediately. The $100 Big Mac value meal would be a killer…LOL. Solutions are not what .gov seeks.

[sreader3]

Thank you for your post. And shout out to Brian Van Horn who started this thread!

[sreader3]

Originally Posted by BobC

The IRS is not stupid.

Sorry Bob. You are a super cool dude and I appreciate your NYC information. But the IRS is, in fact, very stupid. This latest Dem 1099 overreach just gives them more authority to troll through the records of legitimate taxpayers. It is yet another bad Dem idea that has come to fruition.

[BobC]

Originally Posted by sreader3

Edited to add: Same comments to Bob C. Yes I am serious. I am very concerned about federal encroachment. I do not place unqualified trust in federal authorities, although I know many good people who work for the federal government. Neither did our founders repose trust in centralized authority. Apparently you are not as concerned, which is your right. It is still a free country.

My question to you about being serious had absolutely nothing to do with whether we can trust the government or not, it was solely directed at your comment that, and I quote, "the situation you are describing where deducting basis from the revenue shown on the 1099 triggers an audit". That is not even close to anything Adam/Exhibitman said or ever implied.

Simply deducting one's basis from the proceeds they got from something they sold, to determine their net taxable income/gain, is NOT just in and of itself ever going to trigger an IRS audit. In fact, the IRS pretty much fully expects everyone reporting such sales on their tax return is also going to be deducting the basis of what they sold. I just didn't want someone reading what you stated in your post to think that by doing what they are supposed to be doing on their tax return, deducting their tax basis of an item sold, it was suddenly going to trigger an IRS audit for them. That comment/thinking is totally wrong!!!!!

I probably have no more, and maybe even less, trust in our government and politicians than you, and also am not a big fan of encroachment and even more government oversight and regulations. I am merely speaking to the tax laws and requirements/reporting in place, and what people need to be aware of in complying with what is out there. I am not commenting on and either approving or condemning our government and the tax laws they passed, just trying to better explain them and how they are supposed to work for people, especially in regard to how those tax laws can impact their collecting activities.

[sreader3]

You Said: Simply deducting one's basis from the proceeds they got from something they sold, to determine their net taxable income/gain, is NOT just in and of itself ever going to trigger an IRS audit. In fact, the IRS pretty much fully expects everyone reporting such sales on their tax return is also going to be deducting the basis of what they sold.

Will you personally commit to that for the next 5 years? Will you commit to paying the attorney fees of anyone who is audited for failing to pay their claimed tax liability under an IRS audit for noncompliance with the new 1099 rules if they are ultimately found innocent?

You Said: I probably have no more, and maybe even less, trust in our government and politicians than you, and also am not a big fan of encroachment and even more government oversight and regulations.

I doubt it.

You Said: I am merely speaking to the tax laws and requirements/reporting in place, and what people need to be aware of in complying with what is out there. I am not commenting on and either approving or condemning our government and the tax laws they passed, just trying to better explain them and how they are supposed to work for people, especially in regard to how those tax laws can impact their collecting activities.

Great. Carry on.

[BobC]

Originally Posted by sreader3

Sorry Bob. You are a super cool dude and I appreciate your NYC information. But the IRS is, in fact, very stupid. This latest Dem 1099 overreach just gives them more authority to troll through the records of legitimate taxpayers. It is yet another bad Dem idea that has come to fruition.

The comment I made was in reference to the IRS not being stupid by going out and suddenly auditing everyone for simply deducting the tax basis of items they were selling. That WOULD be senseless and stupid, with no other evidence or issues to indicate the person's return was somehow wrong and their income tax underpaid. The IRS doesn't have the time or resources to even think about doing something like that as they are already still way behind in processing millions of tax returns from last year. So why would they voluntarily want to make their backlog and situation even worse by suddenly starting to audit even more returns with no real issues, that will likely never result in any additional tax revenue? That would just stupidly be adding more work that they don't have the time or resources to perform.

And as for the comment about trolling legitimate taxpayer records, what is the IRS supposed to do? They are simply doing their job in looking at the records and every 1099 they receive to make sure that they are picked up on the taxpayer's tax returns. They aren't "trolling" anything. What you are suggesting would be similar to someone saying how a cop sitting by the side of the road using radar to catch speeders is somehow "trolling" all the "legitimate" drivers going by that aren't speeding. Do you have some better way for the IRS to determine who is or is not properly reporting and paying taxes on their sales, and similarly, for the police to determine who is or is not speeding, without having some way for either the IRS or the cops to measure and check things?

And what is with the comment that "the IRS is, in fact, very stupid"? If it is a fact, exactly what factual evidence or information is there to support and prove that? After making that statement, you immediately jumped over and laid the blame on the Democrats for this change in the tax reporting threshold, and how the IRS was now going to "troll" "legitimate" taxpayer's records because of it. What does any of that have to do with the IRS' collective intelligence or stupidity? The IRS and their employees are only doing the job they were hired to do. Are you saying the individual employees/agents of the IRS are stupid, or that somehow the entire IRS organization is stupid, and if so, how are you measuring that? So, is the IRS dumber or smarter than the Dept. of Justice? What about the Dept. of Defense, or maybe the General Accounting Office? I really am curious as to how one can determine and measure if a particular government office or agency is more or less intelligent than others. I can understand if a particular individual in some government office/agency is deemed stupid for something they said or did, or how an entire office/agency itself could be deemed stupid for some particular thing they said or did, but to claim an overall office/agency itself is simply stupid in whole, how can that be? Unless you're somehow saying the idea of having such an office/agency itself is just dumb. But in the case of the IRS, the government has to have some office/agency in place to enforce and collect income taxes so the government can function and pay to get things done. That is clearly not stupid, it is extremely necessary. So again, how exactly is the IRS as a whole, stupid?

Scot, you're a great guy and have nothing to be sorry for. I'm just trying to figure out where you're coming from. in all my decades working with (and against - LOL) the IRS, I've come to have a pretty good idea of how they work and function. They are basically apolitical, and simply trying to enforce the tax laws they are handed by our government, whether it be from Dem and Rep sponsored legislation. They are just trying to do what they are supposed to do, to the best of their ability, and are normally more than fair in their dealings with the taxpaying public.

[BobC]

Sorry, double post.

[BobC]

Originally Posted by sreader3

You Said: Simply deducting one's basis from the proceeds they got from something they sold, to determine their net taxable income/gain, is NOT just in and of itself ever going to trigger an IRS audit. In fact, the IRS pretty much fully expects everyone reporting such sales on their tax return is also going to be deducting the basis of what they sold.

Will you personally commit to that for the next 5 years? Will you commit to paying the attorney fees of anyone who is audited for failing to pay their claimed tax liability under an IRS audit for noncompliance with the new 1099 rules if they are ultimately found innocent?

You Said: I probably have no more, and maybe even less, trust in our government and politicians than you, and also am not a big fan of encroachment and even more government oversight and regulations.

I doubt it.

You Said: I am merely speaking to the tax laws and requirements/reporting in place, and what people need to be aware of in complying with what is out there. I am not commenting on and either approving or condemning our government and the tax laws they passed, just trying to better explain them and how they are supposed to work for people, especially in regard to how those tax laws can impact their collecting activities.

Great. Carry on.

You were the one who said deducting the cost of items you were selling on your tax return would get you audited by the IRS. That is 100% false, and I simply posted a civil response to correct your error, so some unsuspecting Net54 member reading your comments wouldn't mistakenly think what you said was correct when it comes to filing their income taxes. I can just see someone reading, and believing, what you wrote is true, so that when they get their 1099-K form next year and go to do their taxes, they remember what you said and don't deduct the costs of what they paid for the items they sold. Because they think that if they do, based on what you said, it will automatically get them audited by the IRS. The end result being that because they don't claim a perfectly valid tax deduction on their return, they end up overpaying their income taxes. I was merely trying to help and save those innocent people from making a mistake.

And what the heck is with this ridiculous commitment you want me to make? Simply deducting the cost basis of items you sell on your tax return will never of itself trigger an IRS audit. But someone that doesn't properly or accurately report the 1099-K information they get on their tax return, or maybe just ignores the 1099-K form entirely and doesn't report it on their return at all, is probably going to hear from the IRS, and have a much greater chance of actually getting audited. Not properly or accurately reporting the 1099-K info on your return versus not deducting the cost basis of items you are selling, are two completely and entirely different things. I never said or implied that ignoring or misreporting the info you get on a 1099-K form sent to you would not potentially result in an IRS audit. I said deducting the tax basis cost of items you sold on your tax return would not in and of itself get you audited. Heck, the tax cost basis of items you sell don't even get reported on the 1099-K forms, so what does what I said about them have to do with getting audited for not properly or accurately reporting info you do get on a 1099-K on your tax return? Do you really not understand that? So no, I'm not going to make such a stupid commitment because what you're asking me is totally whack. What you're asking me to do is basically the same thing as me saying if you don't speed, you won't get a speeding ticket. And then you turn around and want me to commit to pay everyone's costs that does get caught and ticketed for reckless driving, and then somehow beats that reckless driving ticket in court. It is two entirely different things!!!!

Not sure why you would doubt what I said. Won't be the first, and probably not the last time either, I have someone on the forum claim they know what I mean or how I think, better than I know myself. It is totally impossible, but still makes me laugh when someone thinks they can know a person better than that person knows themself, especially when the only interaction they've ever had is over the internet and they've never even met in person.

And I will carry on. And if someone else makes more erroneous and incorrect tax statements on here that I see, I will go ahead and correct them for everyone else's benefit. Whether they like it or not!

[Brian Van Horn]

Originally Posted by BobC

Hey Brian, not sure what the exact question is you are asking. What do you mean by "Is there still any argument/grounds for reporting under 1099-B?"

A 1099-B is used to report your broker and barter transactions to the IRS. Typically, the most common use for these is when you sell some stocks you own in a personal investment account, not in a 401K, IRA, Roth, or other specialized retirement type account. These reporting requirements are still there and in place, and every investment firm you work with that handles stocks and investments for you is required to send these 1099-B forms to the IRS, and you, to show the gross amount you received from the sale of your stocks/investments every year. You typically then report these on Schedule D of your personal income tax return, along with related forms 8749, and also have to report and deduct your basis (what you originally bought the stock for), along with any additional costs of sales, from the gross proceeds you received from selling that stock in determining your net taxable capital gain (or loss) from their sale.

https://www.irs.gov/pub/irs-pdf/f1099b.pdf

https://www.irs.gov/pub/irs-pdf/f1040sd.pdf

https://www.form8949.com/form-8949.html

https://www.irs.gov/instructions/i1099b

By the way, the 1099-B form is for reporting broker and BARTER transactions. As I've said on the forum before, technically, when you do a card trade with someone, that is a barter transaction, and you are technically supposed to report and pay taxes on any relevant net income or net gain you may have realized from the trade. Now the actual requirement to file a 1099-B form falls on the Barter Exchange through which the parties to the barter transaction operated and handled the exchange through. So, you and someone you make a card trade with don't personally have any obligation or need to worry about preparing and sending in 1099-B form to the IRS. But just so everyone knows, you are supposed to be treating such trades as possibly taxable sales transactions. A Barter Exchange is a formal group/organization that keeps track of trading activity between members and has actual accounts they keep for them. Similar to how an investment firm keeps an account for their clients and tracks their stock and other investment activity for them.

And before anyone wonders if Net54 could ever be considered a Barter Exchange, because it does act as a platform and help to facilitate trades amongst it's members, rest assured that is not the case. There is no fee paid to join and use Net54, nor does Net54 track and keep records of member's trading activities and account for them and the values of the items they are trading.

Not sure if this covered what your original question might have been. If not, can you be a little more specific on what you are asking about or for? Thanks, hope this helps.

I am not an accountant. That position was held by my late father. That said, at until April of this year you could report collectibles under 1099-B.

[BobC]

Originally Posted by Brian Van Horn

I am not an accountant. That position was held by my late father. That said, at until April of this year you could report collectibles under 1099-B.

Ah, back in post #41 I included a link to the IRS instructions for Form 1099-B, and another link to a copy of the 1099-B Form itself. Both are for the 2023 forms that will cover 2022 activity. Mentions that in Box 3 on the 1099-B form that is a spot you can check to indicate if the form is reporting proceeds from the sale of a collectible. So it looks like the ability to use the 1099-B form to report the proceeds of a collectible's sale by a Broker, on behalf of their client, is still available for all of 2022.

[Brian Van Horn]

Originally Posted by BobC

Ah, back in post #41 I included a link to the IRS instructions for Form 1099-B, and another link to a copy of the 1099-B Form itself. Both are for the 2023 forms that will cover 2022 activity. Mentions that in Box 3 on the 1099-B form that is a spot you can check to indicate if the form is reporting proceeds from the sale of a collectible. So it looks like the ability to use the 1099-B form to report the proceeds of a collectible's sale by a Broker, on behalf of their client, is still available for all of 2022.

Not a broker here.

[ullmandds]

lets hear it for BOB C! Any time of DAY...or NIGHT...he's there for all of our CPA related questions/needs. Geez Bob...get some sleep!!!!!

[Dead-Ball-Hitter]

Originally Posted by Exhibitman

Bogus. False. Complete BS hyperbole. We've been over this before but apparently some people aren't paying attention.

First of all I have dealt with IRS and state auditors. You do not need paper proof to prove basis. Testimony is evidence. I've had clients face down the IRS with direct testimony. I paid $500 for a Warren Spahn card that I sell for $1,000 on eBay and I get a 1099, I report it as such and that will stand up in a court or in an audit. The only things you absolutely must have receipts to prove on your personal return are charitable deductions.

Second, all a 1099 does is alert the IRS that you received money, not net income. I get them every year in the millions because any payment to an attorney is 1099'd and any settlement money paid to an attorney's trust account is 1099'd, all under the law practice's tax ID. The settlements and my deductible costs and the proceeds all are flushed through on my tax return and never hits my net income.

The people panicking over this are worrying about nothing, unless they are tax cheats who didn't intend to declare their incomes from card transactions. Don't do that. Just pay your taxes. If you made huge profits, be happy you did. Profits are a nice problem to have.

Thanks for the balanced perspective on this Adam. A little knowledge can be dangerous, if not shared with the proper context.

[Dead-Ball-Hitter]

Originally Posted by BobC

Correction Jeff, this is where they EARN their money!!! LOL

Bob C, thanks for your many posts on this topic. Many of us want to be tax-paying, law abiding citizens. Of course, we also like to limit our liability when its legal to do so!

[Leon]

I think the 1099s that are coming have affected a lot of small time collectors, who also sell, from doing it as much. Heck, I might even get a PayPal 1099 for taking some money from small advertisers. I already get them from the bigger ones too, of course. Just pay the taxes and no worries.
As for cards, I get taxed on them and just use that as part of my cost basis...

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