Since we operate as a business currently, the recent IRS rules slipped in to the "housing rescue package" won't change the way that we operate, but it sure seems to be a devious way to get the changes made. The rules are outlined in the new Foreclosure Prevention Act of 2008.
I heard rumors of this legislation but saw very little coverage from the media. Is that because it is of little interest or not widely known? It will certainly affect my students as they grow their online business and is the beginning of taxing the internet.
Apparently the new rules are found in the Foreclosure Prevention Act; Title III--Revenue Provisions, Subtitle B, starting in Sec. 3091, but I do not have a copy. Can anyone confirm that?
PayPal and other online payment processors will have to report annual gross receipts for most Internet sellers. The new law will not go into effect until 2011, but the Government hopes to raise $9.5 billion over the next decade in tax revenue and this is not the end of it. You can bet that as soon as these reporting methods are in place, the states and other government bodies will be standing in line for their cut.
The law states that Internet third-party payment intermediaries pass information on to the IRS, reporting such "name, address, and TIN of each participating payee to whom one or more payments in settlement of reportable payment transactions are made, and the gross amount of the reportable payment transactions with respect to each such participating payee." From what I understand, those reports would be triggered after the amount exceeds $10,000 and/or more than 200 transactions.
Now, what does that have to do with foreclosures?