IRS Wants Access to eBay Seller Data

If you are one of the many who now make a significant amount of income off of eBay, Uncle Sam may be interested in how much you're bringing in.

Beginning in 2008, the federal government has proposed that auction houses like eBay report any customer who carries out more than 100 transactions above $5,000 USD. The law is being proposed because many are not reporting income from such sources.

Under the current scheme, there is no way that the federal government can monitor the auction incomes of sellers without actually checking the auctions themselves. Under the new rule, the responsibility to report would fall on the auction company.

The proposal has eBay crying foul. The auction site is already in Washington lobbying against the bill, claiming that it is more of a shopping mall then an actual auction house, and that the law may constitute an overstep of the Internal Revenue Service's authority.

Additionally, classified ad sites would be exempt from the policy, an omission the company sees as unfair. It says it doesn't mind sharing information on certain customers, however it objects to opening all customers to surveillance.

The potential revenue gain from such a policy may be great: the Bush Administration, which supports the change, claims as much as $2 billion in additional tax revenue would be generated.