Should eBayers Pay the Piper? IRS Says Yes

An IRS advisory panel is urging eBayers to be ready to pay federal income taxes on profits. Noting what it termed a "significant" number of online sellers who "either choose to ignore income reporting requirements or are unaware of their obligations," a non-governmental committee of tax specialists told the Internal Revenue Service last week that those who profit from online sales should be forced to pay their fair share of taxes. The committee said that it is trying to close the "tax gap" between what Americans actually earn and what they report. The panel recommends that IRS target under-reporting by online sellers by requiring a federal tax I.D. The committee's recommendations are similar to an enforcement option raised this summer by the staff of the Joint Congressional Committee on Taxation. Interestingly, the web site accountancy.com, which tracks accounting and tax matters for the UK, ran a story Friday (12/1) titled "eBay Traders Warned to Register with Taxman," noting that online sellers there are already required to register with HM Revenue & Customs or risk a fine up to 100 pounds.