The Tax Man Cometh
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Post Posted: Tue Mar 29, 2005 3:44 pm 
 

That is the funniest monster stat I have seen in a loooong time.  Cheers my man for brightening a dark  rainy uk night!
William :lol:

  


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Post Posted: Tue Mar 29, 2005 3:44 pm 
 

I'd also personally have no problem with a federal sales tax if.....  The stupid government would spend it here(univeral healthcare, free college for all ext) not give it away, but that will never happen.

  


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Post Posted: Tue Mar 29, 2005 10:56 pm 
 

bclarkie wrote:I have been buying and selling for 6 years now. IRS tax records can only go back per law 7 years. How can they say for certainty that I didn't buy my whole collection back in 1999 for $50k(my collection is not worth this much by the way) and and now I am selling if off at at huge loss. It would be almost impossible to refute my claim.


How long have you lived in the US?  The IRS couldn't care less about your claim.  It isn't up to them to prove anything.  It is 100% up to you.  They'll look at all of your income and say it is 100% profit unless you can prove otherwise.
The burden is all on you.  :(

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Post Posted: Tue Mar 29, 2005 10:59 pm 
 

Gus Landt wrote:
bclarkie wrote:I have been buying and selling for 6 years now. IRS tax records can only go back per law 7 years. How can they say for certainty that I didn't buy my whole collection back in 1999 for $50k(my collection is not worth this much by the way) and and now I am selling if off at at huge loss. It would be almost impossible to refute my claim.


How long have you lived in the US? The IRS couldn't care less about your claim. It isn't up to them to prove anything. It is 100% up to you. They'll look at all of your income and say it is 100% profit unless you can prove otherwise.
The burden is all on you. :(


Unless I am mistaken, I was under the impression that I am innocent until proven guilty, regardless who is charging me.


"He who fights with monsters might take care lest he thereby become a monster. And if you gaze for long into an abyss, the abyss gazes also into you." -Neitzche

  


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Post Posted: Tue Mar 29, 2005 11:10 pm 
 

bclarkie wrote:Unless I am mistaken, I was under the impression that I am innocent until proven guilty, regardless who is charging me.


An IRS audit isn't a criminal charge.  Though some (myself inculded) think that taxes are criminal.  In an audit you are required to provide proof about your claims.

Gotta love the system.

Back to your regularly schedualed non-collecting topic thread.

~jeff

  

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Post Posted: Tue Mar 29, 2005 11:10 pm 
 

draco76 wrote: I bet that SW Orange B3 you got is worth much more then you paid for it :D


I offered him my right nut for it, but he turned me down.  Now I know my right nut is not worth an Orange B3  :cry:

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Post Posted: Tue Mar 29, 2005 11:18 pm 
 

GamersRest[FNG] wrote:
bclarkie wrote:Unless I am mistaken, I was under the impression that I am innocent until proven guilty, regardless who is charging me.


An IRS audit isn't a criminal charge. Though some (myself inculded) think that taxes are criminal. In an audit you are required to provide proof about your claims.

Gotta love the system.

Back to your regularly schedualed non-collecting topic thread.

~jeff


I can say that I have never been audited before, and I am not a tax lawyer by any stretch, but I don't think that it is that simple. The stuff that I am selling(when it happens), it didn't just fall out the sky into my lap, I had to pay for it in order to obtain it or if I inherited it, they would have already nailed me on it there. Otherwise, there would have to be some other sort of evidence that I have hidden some other source of income that I would have used to pay for it. If this is not the case though than I am obviously more clueless about the tax laws than I realized.


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Post Posted: Wed Mar 30, 2005 12:20 am 
 

Jesus. Every April ...

Guys, the answers are not going to be found on this forum, guaranteed. Not only is tax law very complicated, but the major players involved — the Department of the Treasury and eBay — have offered no clear guidelines whatsoever. The best that Treasury can come up with is to apply a nine-step guideline to determine if an activity qualifies as a hobby or a business; the best that eBay offers is their standard line about how they're just "a venue" and not responsible for anything, at any time, for any reason, ever.

Three thoughts to close with:

1. If you hesitate for even a second when asked, "Does your eBay activity constitute a business?" then it's probably a business. I'd seriously consider declaring your eBay income.
2. No matter what your answer to No. 1 might be, it will only cost you a couple of hours to visit a tax professional — the sort of individual who will be, oh, roughly 500 times more prepared to answer this sort of question than the average Acaeum visitor.
3. If your answer to No. 1 is "yes," all is not lost. You can now deduct business expenses. Among the possibilities (off the top of my head): packing material, ISP fees, eBay fees, PayPal fees, postage, mileage on your car, computers and other office equipment, getting a logo made, and basic supplies (paper clips, staplers, etc.).

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Post Posted: Wed Mar 30, 2005 12:40 am 
 

OK, let's set some minds at ease. The IRS at this point does not care about eBay sales. They would have an impossible time getting your eBay ID, first of all, and they are not allowed access to your computer, or your Internet traffic. You simply say "I don't do much on eBay" if asked. It is next to impossible
You need to put yourself in an auditor's shoes. He will look at your employment, possibly at bank statements, and your returns. If he were to ask you about small deposits being made frequently, there are a million excuses, none of which can be disproved. And be realistic: 99% of audits are conducted on individuals making $100K or more a year. For businesses, it is $500K. There is simply no profit in auditing the little guys; on the contrary, the IRS LOSES money on small-time audits. The amount of money spent on paying the auditor, getting records, etc. is much more than they could hope to get off the average person, unless they accidentally uncover a drug money-laundering scheme. The IRS is very black and white. The more money you make, the better their chances of finding a slipup, therefore the better investment you are for their time and money.


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Post Posted: Wed Mar 30, 2005 12:40 am 
 

BTW, thanks, wthomas!


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Post Posted: Wed Mar 30, 2005 12:41 am 
 

For the most part I don't think anyone here really has to worry about anything tax related, I was just curious when the thread first started if there were any related news articles about a new tax.  I didn't really have any intention of discussing tax related stuff on a collecting forum (I had hoped to import any news worthy items to a political forum for discussion).  As far as I can tell there is nothing in the works to tax internet related transactions above what they are already taxed (if applicable).

~jeff

  


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Post Posted: Wed Mar 30, 2005 12:57 am 
 

GamersRest[FNG] wrote:I was just curious when the thread first started if there were any related news articles about a new tax.


All of the hysteria began with an Associated Press report that was picked up and run by virtually every news-gathering organization in the country. There's about 10,000 links to choose from, but here's a pretty good summary:

USATODAY.com - Better ask: IRS may consider eBay sales as income

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Post Posted: Wed Mar 30, 2005 1:53 am 
 

Deadlord36 wrote:And be realistic: 99% of audits are conducted on individuals making $100K or more a year. For businesses, it is $500K. There is simply no profit in auditing the little guys; on the contrary, the IRS LOSES money on small-time audits.


Sorry, but those are both myths ...

Take 2003, for example:

* 54.5 percent of all audits were performed on individuals with LESS than $25,000 reported income.
* 76 percent of all audits were done via correspondence (no face-to-face contact at all). These are incredibly profitable for the IRS — one study from 1999 found that the average "audit-by-letter" ended up putting $2,700 back into Treasury's coffers.

Another thing to keep in mind: the IRS has computers, too. Many auditing victims are chosen by nothing more complicated than a random-number generator ... "rich man/poor man" doesn't enter into it at all.

As to how this applies to the current discussion ... well, it doesn't really change anything. I'll paraphrase what I said a few posts ago: if eBay is paying your rent, go see a tax professional; if it's not, I don't think it's worth worrying about.

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Post Posted: Wed Mar 30, 2005 8:57 am 
 

Xaxaxe wrote:You can now deduct business expenses. Among the possibilities (off the top of my head): packing material, ISP fees, eBay fees, PayPal fees, postage, mileage on your car, computers and other office equipment, getting a logo made, and basic supplies (paper clips, staplers, etc.).

Not all eBaying works out to a profit.  However, that's not necessarily a bad thing.  Get the government to fund your collection!

    1.  Buy Orange B3s/other "rare" copies
    2.  Sell Green B3s/other "non-rare" copies  (who has time to track the exact inventory, we just go by product code and quantity, sir!)
    3.  Record losses of about $1000 an item.  
    4.  Deduct net loss from personal income tax.
    5.  Keep good stuff and repeat.
* This advice is provided for entertainment purposes only.  Do not really try this.  If you do try this and go to jail, it's not my fault, and I don't exist.

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Post Posted: Wed Mar 30, 2005 10:43 am 
 

Deadlord36 wrote:Tax Man

Frequency: Rare
No. Appearing: 1
Armor Class: 10
Move: 12"
Hit Dice: 1-4 Hit Points
% in lair: 0%
Treasure Type: Incidental
No. of Attacks: 1
Damage/Attack: 1-2
Special Attacks: Audit
Special Defenses: See Below
Magic Resistance: Standard
Intelligence: Very
Alignment: Lawful Evil
Size: M
Psionic Ability: Nil
 Attack/Defense Modes: Nil


One of the most feared creatures in the realm, the Tax Man usually appears as a nondescript, well-dressed human, but is in fact a resident of the Nine Hells. Controlled by the ArchDuke of Hell, Uncle Sam, it is drawn to wealth and power; the more of these an individual has, the greater the chance of being detected by the Tax Man. Once it has selected its quarry, the Tax Man will appear at the prey's lair or place of residence. Once arriving, it will subject the victim to an Audit, a merciless attack that drains the individual of will and reason, leaving only an empty, worthless shell. Once the victim is destroyed, the Tax Man will collect any valuables it can find, and bring them back to Uncle Sam, who adds them to his bottomless vault. There is no saving throw versus an Audit.
Attacking a Tax man usually results in disaster. If a Tax Man is damaged or slain, Uncle Sam will release other minions to deal with the offender, such as the FBI Man and Police Man. These creatures will hunt down the offender and attempt to capture him. If successful, they will transport the individual to Jail, located on the seventh plane of Hell.

Yay! Your humour and wit are exemplory as always. I will add this to my growing MM, along with the legendary Vampire Puffin. :D


This week I've been mostly eating . . . minestrone soup.

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Post Posted: Wed Mar 30, 2005 10:58 am 
 

Xaxaxe wrote:
Deadlord36 wrote:And be realistic: 99% of audits are conducted on individuals making $100K or more a year. For businesses, it is $500K. There is simply no profit in auditing the little guys; on the contrary, the IRS LOSES money on small-time audits.


Sorry, but those are both myths ...

Take 2003, for example:

* 54.5 percent of all audits were performed on individuals with LESS than $25,000 reported income.
* 76 percent of all audits were done via correspondence (no face-to-face contact at all). These are incredibly profitable for the IRS — one study from 1999 found that the average "audit-by-letter" ended up putting $2,700 back into Treasury's coffers.

Another thing to keep in mind: the IRS has computers, too. Many auditing victims are chosen by nothing more complicated than a random-number generator ... "rich man/poor man" doesn't enter into it at all.

As to how this applies to the current discussion ... well, it doesn't really change anything. I'll paraphrase what I said a few posts ago: if eBay is paying your rent, go see a tax professional; if it's not, I don't think it's worth worrying about.


All good advice.  Funniest IRS screwing story EVER:

    One of my best buddies had fallen on hard times.  He was working in a Kroger stocking groceries for several years (he's now a soccer coach and history teacher with a large suburban high school, so things got better).  Being the lazy alcoholic druggie he was, he never filed any taxes at all. Nothing.  Never sent the IRS back anything.  Just took all his tax statements every year and stuffed them in a box under his bed (in the room he was renting from a friend).  
  One day the IRS calls:  He hasn't filed in three years, and they are going to do an audit.  I guess he had been sending up red flags all through the system.....not only had he not filed, his living address was a very tony neighborhood in the area (He was renting a room from a buddy who felt sorry for him, basically living in the pool house for something like $200 a month).  The IRS calls and makes an appointment for their auditors to come by and "talk" with him and get the back money owed (this is in the 80's, before the "audit by letter" crap they have now).
  The day arrives, he's forgotten all about it and is passed out in bed.  Not one but TWO auditors show up.  According to his friend in whose poolhouse he lives, they are practically jumping for joy as they get out of their car and walk up to this $250,000 house.  He says you can see the gears turning in their heads and their smug smiles to each other as they dream about how much back taxes and penalties they are going to nail this miscreant for.  They are understandably upset when he answers the door and explains the situation that the guy they are looking for not only doesn't own the house, he doesn't live inside, he's in the poolhouse which he rents for $200 a month.....
  So they go to the poolhouse.  At the time, my buddy was living what could charitably be called a "sustenance" existence....he owns a tv, radio, bed, dresser, and a large pile of fast food wrappers and empty beer cans.  In his t-shirt and underwear, he ushers the IRS agents in (who are rapidly seeing their promotions getting smaller and smaller) and changes into some clothes...but not before taking a GIGANTIC dump in the adjacent bathroom as the now very worried agents sit on his bed (the only place to sit in the poolhouse) and try to avoid the stained and dirty sheets while getting out and opening their briefcases and case file envelopes like the "professionals" they are.....
 With the aroma of post-Taco Bueno and beer dinner dump wafting through the room, they get down to business, which is to ask him why he hasn't filed, does he know it's illegal, he'll have to pay penalties, etc.  At this time my friend tells them he hasn't filed because he thinks he's owed money.  They ask him for paperwork/verification of that.  They are also asking him questions like does he do work around the house (no), does he clean the pool (no), does he clean the inside of the house (no), everything is no no no because at this time all he's doing is working at Kroger and spending all his money on beer and dope.  
 So my buddy reaches under the bed and pulls out the box with all his W2 forms and information.  The IRS quickly add up the amount.  It turns out even with penalties for late filings, he is owed a very large amount of company. Much to their chagrin, they are forced to cut him a check for sevearl hundred dollars before they brush themselves off, flee out the door, and  jump back into their car (to apparantly hit the nearest drinking establishment and commiserate about the fuck up they've just participated in).  Meanwhile my buddy after doing nothing except sleeping off a stupor has a very large check in hand that he can now use to resume his partying.....
  The post script is even funnier....apparantly to show they are sore losers the guy who owns the house is auditied the NEXT year (gee, what a coincidence), but being as he is a savvy self employed businessman he hires a tax attorney, who refiles on the guys taxes for the last few years once he finds deductions the home owner never took due to ignorance, and he also is presented with a fat refund check from the by now severely depressed IRS agents who apparantly moved onto greener pastures after their double asswhipping at the same residence....

Mike B.

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Post Posted: Thu Mar 31, 2005 1:11 am 
 

Xaxaxe wrote:
Deadlord36 wrote:And be realistic: 99% of audits are conducted on individuals making $100K or more a year. For businesses, it is $500K. There is simply no profit in auditing the little guys; on the contrary, the IRS LOSES money on small-time audits.


Sorry, but those are both myths ...

Take 2003, for example:

* 54.5 percent of all audits were performed on individuals with LESS than $25,000 reported income.
* 76 percent of all audits were done via correspondence (no face-to-face contact at all). These are incredibly profitable for the IRS — one study from 1999 found that the average "audit-by-letter" ended up putting $2,700 back into Treasury's coffers.

Another thing to keep in mind: the IRS has computers, too. Many auditing victims are chosen by nothing more complicated than a random-number generator ... "rich man/poor man" doesn't enter into it at all.

As to how this applies to the current discussion ... well, it doesn't really change anything. I'll paraphrase what I said a few posts ago: if eBay is paying your rent, go see a tax professional; if it's not, I don't think it's worth worrying about.


Interestingly, the IRS came out with a report today saying they are losing millions upon millions to tax cheats they can't catch.  Another problem is like you say they are auditing far too many people under $100,00 and the audits are resulting in either no change in fees or very little to the IRS, making them incredibly ineffective...their solution is to start this year auditing more people over $100,000 (wow. what a concept, audit rich people instead of poor people.....).  Another blurb said that due to the IRS computers not being programmed properly, for the last two years interest fees were not added onto tax payers who sent in late payments or who were on payment plans.  They lost millions here also. Incredible.

Mike B.

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Post Posted: Thu Mar 31, 2005 7:35 am 
 

Badmike wrote:Interestingly, the IRS came out with a report today saying they are losing millions upon millions to tax cheats they can't catch. Another problem is like you say they are auditing far too many people under $100,00 and the audits are resulting in either no change in fees or very little to the IRS, making them incredibly ineffective...their solution is to start this year auditing more people over $100,000 (wow. what a concept, audit rich people instead of poor people.....). Another blurb said that due to the IRS computers not being programmed properly, for the last two years interest fees were not added onto tax payers who sent in late payments or who were on payment plans. They lost millions here also. Incredible.

Mike B.


First off, that story above is funny as hell Mike. :wink: Secondly, I think that you are right on target there as far as audits go. I guess I was naive in the fact that I thought the IRS, being a business, would look at the risk/reward factors of auditing someone. Realistically, IRS agents I imagine make a pretty fair living, especially considering that they work for the government, would only be used in a stiuation where they would have an opportunity to make more money for the government that then government is spending to have them do the work. Auditing some who makes $50,000.00 a year and may have shorted the government $1,500.00 in taxes, when you are paying your agents $3,000.00 to figure out the discrepancy and get the money back, just doesn't make good business sense. Obviously, they have to have some semblence of control over everyone,so you can't let everyone off the hook, but I would think that they would be better off focusing more on folks who made more money, as the rewards for their efforts are more likely to be much greater. Then again, not much about what the government does makes much sense anyway, so who the hell am I kidding. :roll: I mean we have a bazillion dollar trade deficit, and we now have senators and congressman spending millions of tax payers dollars fighting about whether or not to keep a feeding tube in one brain dead woman. Oh, and then there was the Virginia senator who wanted to pass legistlation against peoiple wearing their jeans to low on their a$$.........


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Post Posted: Thu Mar 31, 2005 11:41 am 
 

bclarkie wrote: ...... Auditing someone who makes $50,000.00 a year and may have shorted the government $1,500.00 in taxes, when you are paying your agents $3,000.00 to figure out the discrepancy and get the money back, just doesn't make good business sense......


It seems to me that you are assuming too much.... Since when has anything that the US government done ever made good sense????


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Post Posted: Thu Mar 31, 2005 4:50 pm 
 

Deadlord36 wrote:Tax Man

Frequency: Rare
......


priceless...you made my evening :D


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