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Private Dealer Tax ID shite

meatyogremeatyogre 2,080 Posts
edited January 2006 in Strut Central
Ok, so this is something thats been on my mind for a while. How many of you private dealers have Tax ID numbers? Do you get receipts for every record you purchase? A woman I know recently got audited by the IRS for not claiming her Ebay sales from 2 years ago... she made 5000$ for the year in question. I don't think Ebay's gonna start stomping on little dudes, but when you're making a majority of your living $$ from Ebay sales, you gotta start thinking about this ish. I know SS has some lawyer types up in here, and probobly folks who have Tax ID number for being record dealers. What are your thoughts/suggestions. Sorry if I'm vague here.

  Comments

  • DjArcadianDjArcadian 3,632 Posts
    A tax ID number (commonly called a FEIN number) is really only required for corporations. Otherwise indiviuals can just use their social security number. Most states require you to get a resellers permit which allows you to purchase products wholesale. You also use this resellers permit to pay sales tax collected on your sales. Now, when you sell something out of state no sales tax is required. Technically so long as all your sales are out of state you shouldn't need a resellers permit.

    I assume Ebay is reporting large sellers to the IRS now. I don't see how the IRS could find out otherwise unless they were tracking her bank account.
  • Jonny_PaycheckJonny_Paycheck 17,825 Posts
    Do NOT feel comfortable selling shit on ebay. The jig is up. As a corporation I already have to pay taxes on record sales so my ebay just falls in with that... paypal is a fun way to do laundry because you're just reinvesting in more records, makes it harder to trace if you don't dump into your account... maybe I've said too much...

    What's worse, any sale within the same state is subject to state sales tax, think about the IRS mining your shipping addresses through paypal...



    Guess it's a good thing most of these records are going international

    But seriously though, if anyone thinks for a second that ebay or paypal is gonna look out for the little record dealer then I have a G+ copy of Freddie Hubbard Red Clay for $50 to sell ya.

  • meatyogremeatyogre 2,080 Posts
    yeah the popped her for ebay sales that she wasn't filing.
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