Posted By:
Jim VBAl,
Your tax liability is exactly the same, whether or not Paypal reports your disbursments to the IRS. You are liable for tax on any profit you have on any sale of this type. There is no change forecast for that. (OF course, the rate of that tax is always subject to change under Federal tax law.)
Even if Paypal doesn't report, the IRS can audit you and check records of what you've received. It's much smarter to keep good records, and report fully, any profit you make. A good auditor would be glad to ask what was the source of the deposits to your checking accounts.
As I said in an earlier post, Paypal has agreed to beging reporting to the IRS, in early 2012, the dollar amounts disbursed to anyone with over $20,000 AND over 200 transactions. So any sales made in 2011 will be reported, if you meet these standards.
BUT IT REALLY SHOULDN'T CHANGE ANYTHING!