OT But probably affects most on this board

[D. Bergin]

Originally Posted by jtschantz

I don't think the issue here is so much about sales tax as it is more about personal income tax..just sayin!

Yeah, sorry I took it in another direction. Just theorizing what this is eventually leading to.

If you are already keeping records and reporting your sales it shouldn't bother you. I just think it's a tool to track how much commerce is actually going on with the internet so they can use it as a bargaining chip to claim how much revenue the government is losing so they can either tax it at a federal level or into a combined state tax fund.

[Jim VB]

Originally Posted by D. Bergin

Yeah, sorry I took it in another direction. Just theorizing what this is eventually leading to.

If you are already keeping records and reporting your sales it shouldn't bother you. I just think it's a tool to track how much commerce is actually going on with the internet so they can use it as a bargaining chip to claim how much revenue the government is losing so they can either tax it at a federal level or into a combined state tax fund.

We have no national sales tax of any kind, in any area. Historically, the Federal Government has left Sales Tax issues up to the state and local governments to handle (as they have property taxes.) Could this change? Sure. But I don't see it happening in the foreseeable future.

I do think it is a move to close a loophole in the collection of income taxes. Therefore, it is designed as enforcement of a law already on the books, and not a new law.

[baseballart]

As Jim VB has pointed out, the reporting requirement by Paypal does not change a taxpayer's obligation to properly file his or her income tax returns. As well, every state with a use tax requires taxpayers to self-assess out-of-state purchases. I have seen California use federal customs importing records to deal with unpaid California use tax.

A national value added tax (in which businesses get input credits on taxes they pay on their expenses) is the best taxing method in terms of fairness and cost of administration. As such, I expect there is somewhat less than a zero per cent chance of it ever being implemented.

In Canada, we have such a tax, and despite complaints from consumers, it levels the field of competition between sellers.

I act for many taxpayers with unreported revenue. And everyone of them has reported all their credit card sales, as they know that these amounts cannot escape detection of the tax authorities.

[teetwoohsix]

Pretty soon they will figure out a way to tax the air we breathe.

[53Browns]

Actually I believe they are working on a bill right now that will tax every third breath we take. Something to do with carbon omissions.

Wouldnt put it past them...

[M's_Fan]

I am a tax lawyer so I might be able to explain what is going on here in very general terms.

IRS 6050W was passed as part of The Housing Assistance Tax Act of 2008. This was passed in July of 2008 under the previous Congress/Administration, to try and prevent the "subprime mortgage crisis" from spreading to the rest of the economy (this was passed in July of 2008, and the economy nearly collapsed in October, so we all know how successful this legislation was).

You may ask, "Why in the heck did they pass this tax reporting law in a housing bill?" To answer this, let me give you a background on how much tax legislation gets passed: Congress wants to pass a bill spending all sorts of money on government programs. To make the numbers look like at least part of the legislation is paid for, and thus won't add to the deficit, they pass some new tax provision which Congressional accountants have determined will raise money for the government. So that's where IRS 6050W came from. They passed all sorts of revenue raising gimmicks in the Obamacare legislation as well. Sausage making at its finest.

The purpose of this law is to try and match up the information reports with what people report on their income taxes. It provides an easy way for the IRS to claim that there is unreported income.

Right now the limits are $20k and 200 transactions, not $20k or 200 transactions. So I definitely will keep my paypal transactions under $20k.

Legal Disclaimer: None of this is to be construed as legal advice or forming an attorny-client relationship, see your own tax advisor.

[Leon]

Originally Posted by M's_Fan

I am a tax lawyer so I might be able to explain what is going on here in very general terms.

IRS 6050W was passed as part of The Housing Assistance Tax Act of 2008. This was passed in July of 2008 under the previous Congress/Administration, to try and prevent the "subprime mortgage crisis" from spreading to the rest of the economy (this was passed in July of 2008, and the economy nearly collapsed in October, so we all know how successful this legislation was).

You may ask, "Why in the heck did they pass this tax reporting law in a housing bill?" To answer this, let me give you a background on how much tax legislation gets passed: Congress wants to pass a bill spending all sorts of money on government programs. To make the numbers look like at least part of the legislation is paid for, and thus won't add to the deficit, they pass some new tax provision which Congressional accountants have determined will raise money for the government. So that's where IRS 6050W came from. They passed all sorts of revenue raising gimmicks in the Obamacare legislation as well. Sausage making at its finest.

The purpose of this law is to try and match up the information reports with what people report on their income taxes. It provides an easy way for the IRS to claim that there is unreported income.

Right now the limits are $20k and 200 transactions, not $20k or 200 transactions. So I definitely will keep my paypal transactions under $20k.

Legal Disclaimer: None of this is to be construed as legal advice or forming an attorny-client relationship, see your own tax advisor.

Thanks...always good to hear from someone in the know...best regards