OT But probably affects most on this board

[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