posted on October 9, 2000 08:12:09 AM new
Obviously, you should always request an opinion from a qualified tax accountant for your state, but it seems foolish to me to NOT declare income from your Ebay activity, if you're using PayPal (or any other means of payment for that matter). Unless you're selling items that no one would buy for resale, one of your transactions could show up on an audit of one of your bidders, and the IRS might decide to audit you.
posted on October 9, 2000 08:13:42 AM new
PayPal records may only constitute a small portion of income as many payments still arrive as cash & checks...
posted on October 9, 2000 08:18:26 AM new
Paypal either sends you a check or wire transfers the $$ into your checking account, both of which give the IRS a dandy paper trail should you ever be audited.
posted on October 9, 2000 09:10:08 AM new
Unless you are dealing with strictly cash it is almost impossible not to leave a paper trail. It can be hard even if you only accept cash, after all you more than likely bought itmes with the cash. Your average IRS auditor is well versed in knowing where to find finacial records that show your cash flow.
I have often toyed with the idea of the IRS securitizing audit futures. They could be bought and sold on the stock exchange. The return they get on unpaid taxes (interest and penalties) is absolutely stellar from an investment point of view.
The effort it takes to hide your income in a traceless fashion is so difficult that it is truly better to simply declare the income and pay your taxes. And if you ever get audited for unreported auction income you will find out that it would have been substantially cheaper also.
