New Tax Law Hidden In COVID Relief Bill Will Crush eBay/Paypal Sellers (4 Viewers)

[HaRDHouSeiNC]

People seriously misunderstand how the rich avoid taxes. Yes, they do have very good accountants and make use of every legal loophole. Yes, they make large donations to Congress for the very best tax cuts. And no, the rich don't get tired of winning.

But is that enough? Hell no. There is plenty of brazen fraud. Not to name names, but there likely were very good reasons why a billionaire wouldn't release his entire tax return history and allow a deep search for criminal activity by a motivated, skilled set of accountants / lawyers.

It is hard to appreciate how out gunned the IRS is vs a huge financial interest. The Treasury pays very poorly. Very, very poorly. When the agent gets their skills from a few years service, then they get paid far better to work on the client side of IRS actions. This means the government has weak advocates and short timers at that. It is easy for the government to get bogged down by a well funded ultra wealthy taxpayer.

On the other hand, going for that family with the yard sale is trivial. Send a demand letter. If that doesn't work, levy the wages and put a lien on the house. Poor sucker can't afford to hire good defense against a $1,000 tax + penalty bill. So they just pay up. Or the IRS just grabs the paycheck and laughs.

I do think the IRS would need an army of skilled professionals to contest the tax returns of the top 1/1,000. And I would be in favor of that. But they aren't hiring very skilled people because - - - the IRS pays so poorly relative to the market for skilled tax accountants. < to be fair, $55,000 - $105,000 for a MBA educated accountant is not minimum wage. But it is a fraction of what a major name tax firm pays it's staff>

Not sure who is kidding whom, but a $600 or even $10,000 annual threshold on bank reporting basically means reporting everyone's bank account. Make it $1,000,000+ and I would be more inclined to agree that it might be a good idea.

Again if you up the tax on the billionaires to peak stupid you aren’t going to accomplish much. There aren’t that many or 100 millionaires.

They want more from the middle and upper middle class business owners.

The top 10% already pay nearly 80% of the current tax revenue.

If you think the few dollars from a couple of billionaire tax cheats is what they want you are just wrong. There are a couple of them maybe a few bucks. But if you get the entire middle class foe another 10% that’s trillions

There is no mass critical tax fraud people are hiding trillions a year on it’s just not there.
And with this monitoring they sure aren’t after multi millionaires if it’s a $600 level. They want more and more from the middle class to pay for these massive budget bills and relief packages they are blowing money into the sky with. And all they have done so far is break the supply chains and record inflation.

Tax revenue the past year or two is up and at record levels. They have a spending problem the tax revenue is there and the highest they’ve ever seen. If you don’t see it now you will later when the negative interest rates hit and the recession / stagflation becomes even worse. Then when it can’t sustain itself anymore remember what interest rates were in the 80s after a massive wave of record inflation. Hope you don’t need a loan then.

 

[ReallyGoodUsername]

 

[Budha]

Again if you up the tax on the billionaires to peak stupid you aren’t going to accomplish much. There aren’t that many or 100 millionaires.

They want more from the middle and upper middle class business owners.

The top 10% already pay nearly 80% of the current tax revenue.

If you think the few dollars from a couple of billionaire tax cheats is what they want you are just wrong. There are a couple of them maybe a few bucks. But if you get the entire middle class foe another 10% that’s trillions

There is no mass critical tax fraud people are hiding trillions a year on it’s just not there.
And with this monitoring they sure aren’t after multi millionaires if it’s a $600 level. They want more and more from the middle class to pay for these massive budget bills and relief packages they are blowing money into the sky with. And all they have done so far is break the supply chains and record inflation.

Tax revenue the past year or two is up and at record levels. They have a spending problem the tax revenue is there and the highest they’ve ever seen. If you don’t see it now you will later when the negative interest rates hit and the recession / stagflation becomes even worse. Then when it can’t sustain itself anymore remember what interest rates were in the 80s after a massive wave of record inflation. Hope you don’t need a loan then.

Exactly- but that doesn’t fit the agenda.

The lack of understanding of fundamental economics and finance within the general population is astounding. It is my one wish that basic economics be mandated as part of the national curriculum starting in middle school.

People REALLY NEED to understand what they are being sold, and they don’t. When a politician can say a ~ $3 Trillion spending program will have ZERO cost and is not immediately questioned as either a liar or a fool - it sadly demonstrates the current state of our electorate.

 

[RainmanTrail]

Again if you up the tax on the billionaires to peak stupid you aren’t going to accomplish much. There aren’t that many or 100 millionaires.

They want more from the middle and upper middle class business owners.

The top 10% already pay nearly 80% of the current tax revenue.

If you think the few dollars from a couple of billionaire tax cheats is what they want you are just wrong. There are a couple of them maybe a few bucks. But if you get the entire middle class foe another 10% that’s trillions

There is no mass critical tax fraud people are hiding trillions a year on it’s just not there.
And with this monitoring they sure aren’t after multi millionaires if it’s a $600 level. They want more and more from the middle class to pay for these massive budget bills and relief packages they are blowing money into the sky with. And all they have done so far is break the supply chains and record inflation.

Tax revenue the past year or two is up and at record levels. They have a spending problem the tax revenue is there and the highest they’ve ever seen. If you don’t see it now you will later when the negative interest rates hit and the recession / stagflation becomes even worse. Then when it can’t sustain itself anymore remember what interest rates were in the 80s after a massive wave of record inflation. Hope you don’t need a loan then.

You don't think there are 100 millionaires in the USA? There are 100+ millionaires on this site alone, without question.

 

[SpaceMonkey420]

Let’s go Brandon

 

[HaRDHouSeiNC]

You don't think there are 100 millionaires in the USA? There are 100+ millionaires on this site alone, without question.

Sure of course
100 on this site might be a stretch maybe

So if 10000 hid 25,000 each in tax you wouldn’t even pay the IRS salary

The middle class is hundreds of millions of people who at Mist hide some sales on eBay for the 9,999 limit or here flipping chips.

If you squeeze an extra 4500 out of the entire middle class every time they file plus lower the death tax exemption limit that’s trillions per year.

Being a millionaire now doesn’t mean much that’s still middle class. Having assets of that doesn’t mean you are banking a million per year.

You said you want to tax the billionaires but they are paying the majority of the tax revenue already and more than ever this year. That’s with Trumps tax plan BTW.
On top of all the revenue their company jobs produce.
Let’s confiscate all the wealth from the billionaires then. It would cover less than one year of the budget and then production and GDP plummets. Who do you think drives innovation and stimulates jobs growth. Lots of those evil top 5%.
I don’t think they should pay zero but I’m not ignorant enough to think they actually do pay zero.

Again there is no tax collection problem we’ve had record tax revenue this and last year. It’s a spending problem just look at spending the past year and proposed budgets. They are out over their skis and taxing the billionaires at 50% won’t cover it not even close.

The middle class is 99% of this site I’d say. The Uber rich or corporations won’t feel a few percent increase anyway. Those higher costs are all passed onto the consumer when you tax tax small businesses which make up a huge percentage of businesses in the US.

This tax the rich is a fallacy. They already pay the far and away percentage of taxes collected today.

 

[JWC]

Let’s go Brandon

My favorite cheer of all time!

 

[HaRDHouSeiNC]

My favorite cheer of all time!

He’s finally United everyone as promised and stadiums are chanting his name

 

[RainmanTrail]

Sure of course
100 on this site might be a stretch maybe

So if 10000 hid 25,000 each in tax you wouldn’t even pay the IRS salary

The middle class is hundreds of millions of people who at Mist hide some sales on eBay for the 9,999 limit or here flipping chips.

If you squeeze an extra 4500 out of the entire middle class every time they file plus lower the death tax exemption limit that’s trillions per year.

Being a millionaire now doesn’t mean much that’s still middle class. Having assets of that doesn’t mean you are banking a million per year.

You said you want to tax the billionaires but they are paying the majority of the tax revenue already and more than ever this year. That’s with Trumps tax plan BTW.
On top of all the revenue their company jobs produce.
Let’s confiscate all the wealth from the billionaires then. It would cover less than one year of the budget and then production and GDP plummets. Who do you think drives innovation and stimulates jobs growth. Lots of those evil top 5%.
I don’t think they should pay zero but I’m not ignorant enough to think they actually do pay zero.

Again there is no tax collection problem we’ve had record tax revenue this and last year. It’s a spending problem just look at spending the past year and proposed budgets. They are out over their skis and taxing the billionaires at 50% won’t cover it not even close.

The middle class is 99% of this site I’d say. The Uber rich or corporations won’t feel a few percent increase anyway. Those higher costs are all passed onto the consumer when you tax tax small businesses which make up a huge percentage of businesses in the US.

This tax the rich is a fallacy. They already pay the far and away percentage of taxes collected today.

You might be delusional, but at least you're an excellent writer. If this economic policy analyst role doesn't work out for you, at least you still have a strong future. Perhaps you could get a job writing for a major news network like OANN or Infowars where they might value your talents?

 

[HaRDHouSeiNC]

You might be delusional, but at least you're an excellent writer. If this economic policy analyst role doesn't work out for you, at least you still have a strong future. Perhaps you could get a job writing for a major news network like OANN or Infowars where they might value your talents?

Typical

“When the debate is lost slander becomes the tool of the looser.”

I don’t see any actual argument here with counter argument disproving my point just typical Fox deplorable and whatever name calling.

You do you bro you’re happy with Comiefornia tax rates & leadership with crippling regulations that have ports backed up compounding supply chain problems for the whole country.

Even if the obvious outcome of these bills and taxes starts to hit home you will still continue on with the oh that’s fake news with your head in the sand. Carry on Comrade.

Oh and here I told you so record tax revenue

 

[ekricket]

Yes, eBay is of course doing this because it will greatly affect their business. However, they're not wrong in calling this out as the bullshit it is. I'm beyond pissed off at the current administration for this decision. Let's go after the 50 million people who resell their used camera on eBay to get that tax revenue instead of just asking Apple and Amazon to pay, oh I don't know, at least 1% of their revenue in taxes? Really? Go fuck yourself Uncle Sam.

You think you’d clean up your own front yard before you started complaining about your neighbors house.
Let’s go California!

 

[Budha]

Dr. Strange is 100% correct. The IRS has no choice at this point but to target the lower and middle classes because, as they have stated themselves, they do not have enough personnel of proper skill to target/audit the wealthy because the wealthy hide behind lawyers who tie the IRS best/limited tax attorneys up in court for years (example: Trump) so the IRS is outgunned and cannot try to audit the wealthy en masse, they can only try to fight the most obvious and egregious cases of wealthy tax fraud. Their lower skilled average employees can go after the middle class because we don't usually lawyer up for an audit or taxes due, we just pay what they say is owed. They can run computer searches on our tax records and send out form letters for taxes due al day long.

The IRS budget/manpower has been gutted over the last 10 years by every Presidential administration, which has cut their budget so that the IRS cannot hire or retain skilled tax accountants that are needed to target wealthy tax audits, leaving them only left with all of us to go after. All the skilled personnel they have are being hired away for more pay by corporations to help them avoid the tax laws.

It has been shown that by funding the IRS and increasing their numbers of skilled auditors to conduct audits on the 1%, there would be huge revenue gains. The numbers were something like $10 billion in funding to the IRS over 10 years would yield $40 billion in tax revenue.

I don't think it's coincidence that all previous administrations that rely on campaign donations from corporations and the 1% (who don't want to face IRS audits of their tax loophole activity) have continually de-funded the IRS. It seems like a deliberate multi-administration agenda of the wealthy elite to compel their bought politicians to pass legislation to de-claw the IRS against the wealthy.

So, if I am to understand this, the current narrative is to make the IRS out to be the victim.

REALLY -

If there is one agency you absolutely don’t want to F’ with, it’s the IRS. They are the original 800pd gorilla! They don’t have to be right or prove shit, if audited YOU have to prove they are wrong!

It ain’t cheap either, If you win, you still lose. They can F’ with anyone they want - and they do.

I’m going to start selling bridges - the timing is ripe.

 

[DrStrange]

The IRS is following the will of Congress. Given the tax code and funding levels, the rich are rarely held to account. Expensive, slow and risky to one's job. Much easier to go after the "low hanging fruit" of the middle and lower classes.

Sure the little people see the IRS as a 800 pound gorilla. The wealthy see it as a laughable paper tiger. It will take some big changes to alter this. I do not harbor much hope.

 

[Budha]

Have you ever had dealings with the IRS directly…? Do you know any “rich” people personally? I can 100% assure you that no rich person or company in the US considers the IRS a joke. I can do this with 100% certainty!

I think you have mistaken political rhetoric and propaganda for truth or fact.

For you own edification, seek out someone in the finance and accounting dept at the company you work for and ask them if they take the IRS seriously… I think it would be a worthwhile experience.

 

[ReallyGoodUsername]

Have you ever had dealings with the IRS directly…? Do you know any “rich” people personally? I can 100% assure you that no rich person or company in the US considers the IRS a joke. I can do this with 100% certainty!

I think you have mistaken political rhetoric and propaganda for truth or fact.

For you own edification, seek out someone in the finance and accounting dept at the company you work for and ask them if they take the IRS seriously… I think it would be a worthwhile experience.

I’ve talked with tax departments of large companies on a weekly basis for over a decade (think anywhere from Apple to State Street to Moderna to small hedge funds), they don’t fear the IRS. That’s not to say they don’t take tax regulation seriously though. They stay in the lanes of the code and while constantly spending hundreds of thousands to tens of millions a year to work the tax code until it sings the tune they want which they usually do quite nicely.

As for high net worth individuals it is a fact that the gutting of the IRS had led to a decrease in audits, not in middle & low income returns, but almost solely into high net worth individuals. Why? Because as @DrStrange and anyone whose worked for the IRS will tell you it takes a ton more man power and specialized assets to go after rich tax dodgers than Joe Schmoe. Could they shift their dwindling resources to high net worth individuals? Sure. Will they do so as long as they get their budget cut year after year and struggle to keep those specialized/technical employees who can actually run those types of audits? Probably not.

 

[DirtyTIVA]

No chips to buy today so I’ll dip my toe into this. American politics has become so polarized on every issue no one will compromise. Republicans just want to cut taxes (doesn’t really do much and the benefits are extremely unbalanced). Democrats wave a flag of “tax the rich” while spending outrageous amounts of money they don’t have. Each side just takes turns at the helm and spins the wheel as far as they can while pointing the finger at the other side. When each side is on defense the goal is to adamantly oppose anything from the other side. This 2 party thing is stupid and dysfunctional when viewed from afar.

Do rich people pay the majority of taxes? Yes.

Are there lots of creative dodges rich people employ that average folks cannot? Yes.

Is the government spending way too much and not getting much in return? Yes.

I personally think the problem isn’t income and taxation. It’s wealth. If you work for your money you’re not the problem. When vast wealth begets more wealth for nothing it’s not really adding much to society anymore.

And to address the op I think this policy change seems a bit misguided. Might even get me into crypto...

 

[Silver_Fiend]

I think its super-neeto-fun seeing people gripe about "tax loopholes". That creature doesnt exist. The laws are written with specific language. If you can work outside that language, its not a loop hole, its called being SMART! If your town passes a law that says you can be fined for speeding only while driving a Ford F-150 above the limit, on a Sunday... so you go buy a Dodge Viper and speed on Friday, you can be blamed for not getting fined. You are following the exact rules of the law, as written. If you are dumb enough to speed, on Sunday, in an F-150, then thats your own fault.

Yes, the tax laws are ridiculously complicated and convoluted, but here a hint for you. You cant afford the $$$$ tax attorney to make sure you are structuring your finances within the rules of the law, you are most certainly not making enough money to worry about it.

and for the record, I can not afford those tax attorneys either. I have no holes to loop.

 

[DirtyTIVA]

My wife does corporate tax. Loopholes do exist in the sense that entities are exploiting specific language or lack thereof in different tax codes for their own benefit. The literal interpretation in some cases has strayed far from the intended effect. Unfortunately this country doesn’t have the testicles anymore to get anything done. Mostly people who don’t work for a living are trying to look the part and are focused only on super short term goals like re-election or insider trading.

Here’s an example of a loophole.

https://www.google.com/amp/s/www.ny...tics/allergan-eye-drops-indian-tribe.amp.html

 

[ReallyGoodUsername]

I think its super-neeto-fun seeing people gripe about "tax loopholes". That creature doesnt exist. The laws are written with specific language. If you can work outside that language, its not a loop hole, its called being SMART! If your town passes a law that says you can be fined for speeding only while driving a Ford F-150 above the limit, on a Sunday... so you go buy a Dodge Viper and speed on Friday, you can be blamed for not getting fined. You are following the exact rules of the law, as written. If you are dumb enough to speed, on Sunday, in an F-150, then thats your own fault.

Yes, the tax laws are ridiculously complicated and convoluted, but here a hint for you. You cant afford the $$$$ tax attorney to make sure you are structuring your finances within the rules of the law, you are most certainly not making enough money to worry about it.

and for the record, I can not afford those tax attorneys either. I have no holes to loop.

Fwiw it's the very definition of a loophole - an ambiguity or inadequacy in a system, such as a law or security, which can be used to circumvent or otherwise avoid the purpose, implied or explicitly stated, of the [tax] system.

My wife does corporate tax. Loopholes do exist in the sense that entities are exploiting specific language or lack thereof in different tax codes for their own benefit. The literal interpretation in some cases has strayed far from the intended effect. Unfortunately this country doesn’t have the testicles anymore to get anything done. Mostly people who don’t work for a living are trying to look the part and are focused only on super short term goals like re-election or insider trading.

Here’s an example of a loophole.

https://www.google.com/amp/s/www.ny...tics/allergan-eye-drops-indian-tribe.amp.html

100%

 

[clapton77]

A lot of interesting "information" here - please consider hiring a tax professional and stay safe out there. Increased audits are on the way.

 

[davin]

Already got a message from eBay to provide a ITIN or full social security to get my money released on a transaction I had, so looks like this has been implemented on January 1

I feel robbed as what does selling used things on eBay have to do with paying taxes. I already paid for these items and paid taxes on them and they are used items I sold.

 

[davin]

anyone have any idea how much I should set on the side to cover the taxes with this 1099-k say I sold 5k in used items?

 

[HaRDHouSeiNC]

anyone have any idea how much I should set on the side to cover the taxes with this 1099-k say I sold 5k in used items?

Profit would be taxed at your tax rate

 

[Budha]

Profit would be taxed at your tax rate

This would be my best guess as well.

If their gonna tax me on my hobby sales, I’m gonna set up a business for the maybe $1000 I sell annually and then declare all of my purchases as business expenses (“losses”) - lol

 

[Schmendr1ck]

I feel robbed as what does selling used things on eBay have to do with paying taxes. I already paid for these items and paid taxes on them and they are used items I sold.

Capital gains tax, if you sell an item for more than you paid for it.

 

[davin]

Capital gains tax, if you sell an item for more than you paid for it.

What if I got it for free? Or what if I bought a PS5 and sold it for less I need to keep all those receipts?

Is it better to just open a small buisness

 

[johnjohn]

start a biz. USA USA USA

 

[Budha]

Capital gains tax, if you sell an item for more than you paid for it.

Unless…it’s business “revenue” (offset by ridiculous “expenses” to procure moar “inventory”) - lol.

 

[Schmendr1ck]

This would be my best guess as well.

If their gonna tax me on my hobby sales, I’m gonna set up a business for the maybe $1000 I sell annually and then declare all of my purchases as business expenses (“losses”) - lol

IANATL, but be careful doing this.

If you make income from a hobby, you must claim it and pay taxes, but you cannot deduct expenses. If you claim that you're running a business, but you're audited and the IRS disagrees, your expenses will be disallowed but you'll still have to pay tax on the profits.

Talk to a lawyer or tax advisor to make sure you're not setting yourself up for problems. My advice is worth exactly what you're paying for it.

 

[Budha]

IANATL, but be careful doing this.

If you make income from a hobby, you must claim it and pay taxes, but you cannot deduct expenses. If you claim that you're running a business, but you're audited and the IRS disagrees, your expenses will be disallowed but you'll still have to pay tax on the profits.

Talk to a lawyer or tax advisor to make sure you're not setting yourself up for problems. My advice is worth exactly what you're paying for it.

Probably worth about the same as my business plan - lol

Although, we are meeting with our accountant in the next couple weeks and I am going to ask about this - lol.