Bill,
Unless you have been making it a habit to continue to buy cards with cash why would you NOT have records as to what you have paid for all the cards you have sold? Not that you should not buy cards with cash but no paypal transactions? No canceled checks? No credit card receipts? Admittedly selling cards is my business so I have records of every purchase and sale I have made. With or with the recent paypal/ebay reporting requirements, sales of collectibles from any source are supposed to be reported, even if you have lost money on the transaction. Those sales are considered reportable income.
I recall several posts over the years where you have inquired about cash transactions. I know a few of us sent you PMs to be careful with what you post on a chat board, especially one in which the FBI is allegedly reading. I will again go on record publicly, as I already have done so privately, to suggest you seek professional advice with regards to your card transactions. A CPA will due for now so that later on you do not need the help of a lawyer. It seems that you might need some guidance here.
As someone who has represented clients in audits, in my former life, I would highly recommend gall bladder surgery without anesthesia over the audit, if given the choice.
Greg
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