January 1 could be interesting thanks to congress.

[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.

[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.

[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.

[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.

[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.

[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.

[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….

[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.

[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?

[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!