IRS Advisory Committee Wants Auction Sellers to Pay Taxes

By Kevin McCoy, USA TODAY 11/20/2006
Attention online auction sellers: An IRS advisory committee wants you — to pay federal income taxes on your profits.

Anyone who sells goods online should first be required by law to submit a federal tax identification number, a change that would enable the IRS to track the transactions and seek any taxes owed, the committee recommended in a new report to the federal tax-collection agency. The recommendation is similar to an enforcement option raised in August by the staff of the congressional Joint Committee on Taxation.
The IRS advisory panel of tax specialists, citing the rapid growth of Americans selling via eBay, uBid and other online sites, said it's likely that "a significant number of those users either choose to ignore income reporting requirements or are unaware of their obligations."

"We're trying to help close the tax gap" between what Americans actually earn and what they report to the IRS, said committee member Rachel Paliotti, corporate tax manager for Blue Cross & Blue Shield of Rhode Island.
The non-government panel's report cited IRS data that estimated non-farm sole proprietors under-report 57% of their annual income. The committee also highlighted a 2005 eBay-commissioned report by ACNielsen International Research that said more than 724,000 Americans described the top online auction site as their primary or secondary source of income. Full Story Here