For several years I've been a member of a popular on line "buying group" who's members are jewelry designers and artists. The group conducts "buys" of various components that artists use in their work. Silver and gold parts of every kind, gemstones of every color and grade, beads of every size, shape,and make, etc.
Instead of paying retail, we pay wholesale. Sometimes less than wholesale because we buy so much stuff.
The group has several hundred members, and, as you can imagine, thousands and thousands and thousands of dollars are exchanged throughout the year. Every cent is exchanged through several PayPal accounts. PayPal is safe, easy and effective, but it was only a matter of time before the IRS took aim at it. That time is now.
Today, a member posted this link to the group's forum.
"The IRS believes that many online sellers fail to report their transactions. Some don't report because they mistakenly believe that Internet sales are invisible. Others do so because they are trying to evade taxes. "
Yes, yes, that's true. I don't know a seller anywhere who enjoys dealing with the IRS, or even thinks of them as anything other than the monstrous trampler of rights that it is.
All merchants who accept payments through credit cards, debit cards, gift cards and PayPal will receive information returns telling them - and the IRS - the gross amount of the merchant card transactions. This will be broken down month by month. While the form uses the word "card," the IRS has made it clear that this is interpreted broadly to include third-party network transactions (i.e., PayPal).
Wait a minute, even if you're really not making any money, it will be reported as if you are? WTF? And who's dumb enough not to think PayPal will raise it's fees again (and again) to accommodate the government's demands on their time to record and mail this shit?
Exception: Very small merchants won't be issued information returns. "Small" for this purpose means annual gross sales on merchant cards of no more than $20,000 or 200 or fewer transactions. In other words, reporting is required only if gross amounts for the year exceed $20,000 and there are more than 200 transactions.
Hold on.... how did they come up with "200 transactions?" What difference does how many transactions make? It makes a difference because the IRS is tracking behaviour. That's my take on it.
And who the hell can live on 20g's a year?? No doubt these pricks are thinking on-line sales and ad generated income is all easy money. Nothing really went into making it, so why not tax the crap out of it?
Some very creative people on YouTube make a comfortable living just from the ads displayed on their videos. You've seen them, I'm sure. Making videos is hard work, if you've ever tried it. There's nothing "easy" about it, but the government just can't stand that anyone would make a dime without it having at least one fat toe on it.
Anyway, the individuals who host the buys in our group take in lots of money, but they don't keep any of it. They don't even keep the goods! One host or hostess can take in $21,000 in a single buy, which could include several hundred transactions. The goods are purchased by the host or hostess, and then dispersed to members depending on what they bought. It isn't complicated. Not yet, anyway.
As it now stands (proposed regulations have not yet been finalized), gross amounts reported for merchant transactions do not take into account any adjustments for credits, cash equivalents, discount amounts, fees, chargebacks, refunded amounts, or any other amounts. It will be up to sellers to report on their returns the full amounts reported to them and then make adjustments or explanations to account for differences in what is ultimately taxable to them.
This means that the people who volunteer to host buys in our group will have to keep detailed records, or else they'll be penalized. Penalized for what? For not keeping detailed records that (hopefully) the IRS will accept. Every credit, every refund, every lost package, every single member problem or issue, and every single fee. Unbelievable.
The government is ruining a very good, worthwhile, income enhancing, economical, and positive thing. Several hundred people can make a big difference to a small business, and we often do make that difference. Some large on line companies restructured their wholesale policies because of us and our purchasing power. It was awesome. Our group has no membership fee. Minimums for buys are very low. It has worked incredibly well for every budget and every style of artist, until now.
The woman who started the group, I'm certain, is completely freaking out.
Galt help her.
Is there seriously any incentive in this current environment to get rich? Right now it's safer just to be poor. I don't mind being poor. But I do mind that richer folks are getting raked over supposedly for my benefit.
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