Paypal, Your Accounts, and The IRS (200/$20,000) (USA ONLY)

[backplaya33]

Originally Posted by slapped

That is ONLY True for Improperly Managed Stealth Accounts,,,,,,,


I Have Stealth Accounts that are Waaaaaaay Past $20,000 and/or 200 Transactions

Wow I'm impressed. But for someone like me this means nothing new? My accounts never get more than a few grand and I make less than 20 grand a year total.

[jeffweico]

Originally Posted by digirally

Wow really? I never knew that! Thanks!!

I've never done taxes for eBay before (only taxes for work, which I quit a couple months ago).

So they'll never ask what you're selling?

And this following question may be out of the scope of this thread, but... for possible audits that may happen, what kind of records do you usually put in your bookkeeping?

Thanks for all the new knowledge!

I was once audited by the IRS, and I wouldn't wish it on my worst enemy! But if you file honestly, you have nothing to worry about, it is just a pain in the you-know-what.

I use quickbooks to keep track of everything. I also scan any supplier receipts, or indicate on which credit card I paid for something. The IRS allowed me to prove eexpenses this way. The audito even told me that if I needed more time, they would allow it so that I could request duplicate invoices from my suppliers. But it did not come to that.

For book keeping purposes, Gucci bags could be listed as "purses". Just make it generic. The IRS could care less about brand names.

The likelihood of being audited is very small UNLESS your numbers are way out of line. Like, lets say $10,000,000 was reported but you claimed that you only made a $1,500 profit. That would probably get some scrutiny. But if $1,000,000 were reported, and your profit was $120,000 that would be more normal.

But the IRS won't care where you buy your stuff or what exactly it is.

[First Edition]

Whether or not anyone agrees with you.... even though it's illegal, it's how people get caught. Period. The most successful and smartest criminals in history have been popped for income tax evasion.

What makes you so different?

[Hercules]

The risk reward is why it's wrong to do it. If you get caught,they take everything they want BEFORE you go to court and loose. Then they watch you for life.

[jeffweico]

Originally Posted by Hercules

The risk reward is why it's wrong to do it. If you get caught,they take everything they want BEFORE you go to court and loose. Then they watch you for life.

Remember Al Capone.. He was a VERY SMART gangster. For years, the police, the FBI and other law enforcement officers tried in vain to get something on him, and they couldn't.

Then one day, someone at the IRS noticed that he had no reported income...

Don't get me wrong, I don't personally care whether or not anyone else pays their taxes. But I wanted to post the warning, because some newbie might think it is just fine not to, that they are invisible to law enforcement, only to end up in jail with a new hubby!

[slapped]

Please,,,,,,In THIS Day and Age,,,You want to Cheat Uncle Sam?,,,,an Age where EVERYTHING that is even REMOTELY about Money Done on the Internet is Recorded and Trackable in one form or another, Thru Bank Accounts, ISP's, and whatever the Hell else,,,,

This is the Game you Wanna Play???,,,,,You Need to Take an Ice Bath, Because that Tempature your Running is Making you Delirious,,,I Mean,,,,Are You Alright????

Go ahead and Start without me,,,,,

[GreenBean]

Take your not paying tax ramblings off the forum.

You earn money: TAX should be paid.

Next protestation of not paying taxes and the delete button is activated.SIMPLES.

Since the topic is about the IRS & PAYPAL, here's the message:

It's a FEDERAL OFFENCE to not pay taxes on income.

Discuss this with a TAX ACCOUNTANT.

[First Edition]

And an attorney.....

[First Edition]

Originally Posted by Hercules

The risk reward is why it's wrong to do it. If you get caught,they take everything they want BEFORE you go to court and loose. Then they watch you for life.

And that's just the thing.... they TAKE everything

[Autumn]

You may not understand how this will work. The deal is that in order to do business at all online, you will need to provide your SSN or EIN and since your EIN uses your SSN to indentify you, all roads will always lead back to you. The bigger issue here is that this move by the IRS will result in an unprecedented ability to monitor virtually every dollar you earn and spend. That ability is not only a gross violation of your (nearly extinct) privacy, it also leaves the door wide open for government abuse and intrusion.

This converts the current system from one that needed "reasonable" suspicion of fraud (or some kind of wrong doing) in order to investigate an individual, to a complete fishing expedition free-for-all. The implications are huge...especially since your bank already monitors your accounts and reports to the government thanks to the "Patriot" Act. If you doubt that in any way, just google "Patriot Act" and then the name of your bank.

So I'm assuming that if you aren't using your SSN for those accounts, you may not be able to use them. Especially if any other individual's SSN is involved in any way since their "income" situation would be effected by any monies being transacted in their names.

I'd like to say that the government wouldn't "abuse" this unlawful, usurped power but their track record isn't very promising.

Lets all pray that they don't decide to get really sleazy about it and attempt to find ways and excuses for enacting it retroactively. Not likely, but not impossible either.

[First Edition]

Your post is not accurate Autumn

An EIN does not always "link" you to a social security number. What if a corporation that is no way attached to the CEO has it's own EIN? This is actually how many companies in the past have been shut down, while the majority shareholders did not go to jail.

You're talking about two completely different things. Again, this thread is only how the new federal guidelines will affect stealth.

You don't have to provide any personal info to do business online.... to whom?

[Autumn]

Originally Posted by First Edition

Your post is not accurate Autumn

An EIN does not always "link" you to a social security number. What if a corporation that is no way attached to the CEO has it's own EIN? This is actually how many companies in the past have been shut down, while the majority shareholders did not go to jail.

You're talking about two completely different things. Again, this thread is only how the new federal guidelines will affect stealth.

You don't have to provide any personal info to do business online.... to whom?

I'm mainly referring to "smaller" business which is what most ebay sellers have. Corporate tax laws are different than sole proprietorships but still, their profits largely go to the top executives. When you're dealing with overhead, employees, being publicly traded, etc. it's an incomparable financial structure. Most sellers on ebay pay their profits to themselves and as such, will (of course) be taxed on the salaries they draw. The way the system is currently set up, it's up to the individual to file their taxes properly. This new structure however, will require much more meticulous financial record keeping, tracking the time you spend and accounting for every penny. That has always been the case with reporting your income but there are a lot of people who "just sell some things" on ebay and aren't terribly knowledgeable on the in's & out's of running a business. This leaves A LOT of people vulnerable to IRS abuse if they aren't aware of or haven't kept meticulous records of expenses & write offs. I won't even bother to get into the discussion about whether or not income tax is mandatory in the first place...that's a huge issue in and of itself.

I'd imagine that this would dramatically effect stealth accounts that draw in large enough profits (solely or combined) to be considered taxable income. I'm basing this on the assumption that all monies earned by selling, regardless of the manner in which it's done, ultimately end up in an individual's bank account. If there are ways to access funds without marrying them to an individual, I'm not aware of them.

I may be completely wrong here but I can only speak to my own experience as an entrepreneur and having come from a family of the same. Stealth accounts have become necessary for a lot of people since ebay and paypal have increasingly moved from being a "marketplace" to being a "policing" agency IN a marketplace.

EIN's are indeed for a business and not an individual but they follow the money from EIN's to individuals when financial institutions run their periodic KYV, or AML (Anti Money Laundering) audits during the year and run batch scans or batch verifications of officer SSN and entity EIN reported numbers. So if an individual is drawing an income from multiple businesses with multiple EIN numbers, I'd imagine that it would eventually be detected during these kinds of audits since they cross reference databases and use the identifying information provided by all financial institutions as is required under the "Patriot Act."

The stealth program is a great one and given the extent of the expertise involved, hope remains that there will always be ways around these kinds of oppressive measures.

[First Edition]

Still, the only person that can "link" an EIN to an SSN is the IRS, not paypal.

Again, this thread has nothing to do with TAXES, the OP, I believe, is more concerned, as we all are, as to how this will affect stealth.

[Autumn]

Originally Posted by First Edition

Still, the only person that can "link" an EIN to an SSN is the IRS, not paypal.

Again, this thread has nothing to do with TAXES, the OP, I believe, is more concerned, as we all are, as to how this will affect stealth.

-----------------------------------

I'm not really sure what you mean by "this thread has nothing to do with TAXES." TAXES have everything to do with this change. It's THE whole reason why your information will be being reported to the IRS in the first place...so that you can be nickled and dimed to death.

Hypothetically, if one uses 10 stealth accounts with 10 different EIN's (which are FEDERAL Employer Identification Numbers), it will eventually get traced back to the business officer's SSN whose bank account(s) the funds end up in. Even if one was to luck out and manage to fly under the radar, the implications of this change should be clearly understood by ALL so that people can make a conscious effort to avoid problems. This wouldn't even be something to worry about if not for 2 major contributing factors:

1. ALL financial (banking, credit card, etc.) institutions are required (and have been for years now) to report information to more than one government agency. It's exactly the reason why "anonymous" credit cards aren't anonymous anymore. The IRS in particular uses an automated system that cross references any and all of your financial records (bank accounts, credit cards, etc.) with the tax forms you file every year. If your financial activity doesn't "jive" with the numbers you filed on your taxes, chances are that you will be audited and/or investigated for money laundering. The politics involved should be of concern to everyone...especially if you do any sort of business online. The excuse used for enacting these measures (Patriot Act) are to "catch" people who launder and funnel funds to "terrorist entities" but it doesn't take a rocket scientist to understand the nefarious purpose this system really serves.

2. If a person were to hypothetically use another individual's identifying information for online business they conduct (such as a family member for example) then the financial information that would potentially get reported to the IRS, will be attributed to the individual whose ID information is attatched to any of those accounts. This would be a problem when said individual files their taxes and isn't reporting the same information that say, paypal, reported. This could lead to an audit/investigation of the individual and since other financial institutions already report personal financial information, it would take little effort to track the activity back to the actual individual USING the information. This is considered IDENTITY THEFT. That's a very serious charge and is just one of several that could be levied (along with bank fraud, money laundering, etc).

Now I'm not implying that anyone would actually do such a thing (use another individual's identifying info) I'm just speaking about how this may hypothetically affect some users of stealth accounts if they were to do it.

I am mentioning this because I think it's an important issue that people should have a clear understanding about. The comprehensive info about the degree of collusion (and that's EXACTLY what it is) between authorities & financial institutions is extensive and takes a while to read through and understand but here are some VERY brief summaries:

Link to FinCEN - "Financial Crimes Enforcement Network" summary:

USA Patriot Act

An older news report:

YouTube - Patriot Act Snooping On Your Bank Transactions

YouTube - Patriot Act Snooping On Your Bank Transactions

There's tons of more recently updated info on the matter. As with any such power grab, this "system" has spiraled down the "give an inch, they'll take a mile" rabbit hole of corrruption. But it should be pointed out that having these payment gateway companies report to the IRS is not a "spontaneous" move. It's one of the final steps of a systematically implemented framework that effectively negates your right to privacy and to be free from unlawful search & seizure.

I am not sure if it would help for some stealth users to move to payment processors outside of the US (if it's one is even available that ebay accepts) or if that would avail a US based bank account that funds are transferred to to a higher degree of scrutiny or not, but it would certainly be a way around the reporting to the IRS by US based processors. My question would be, what do other countries (like the UK for example) use as identifying numbers in place of a FEIN and do you need to provide documentation of residency in that country in order to attain such an indentifier? Do any stealth users here that are in the US, use non-domestic information and if so, does it work?

[jeffweico]

The bottom line here is that for PayPal you will most likely be able to use an EIN. The IRS *MUST* have someone on record who is responsible for that EIN, but they do not give this information out freely.

For taxes, it is simple. Just keep records of what your products cost, your other expenses and your income. Then report any pay your taxes. If you file honestly, there is nothing to worry about. If you are preparing your taxes and are unsure of something, either hire a professional to do them or call the IRS for assistance.

And, as cannot be said enough times, never use another person's information to do business online, even if that person loves you and is willing to help. Drag yourself into whatever mess you like, but don't drag someone else in with you. If you don't understand why not, just search the forums, you will see that only leads to problems.

[First Edition]

you don't pay cash.... cash is a general term used in accounting also. It could mean paid in full up front, or paid with actual bills. And he said on CRAIGSLIST

And it's called a LOSS. It happens.

ugh.... headache... .too early..... far, far too early...

[Bmbr34]

This is probably why Ebay is requiring electronic payments now. The IRS is probably forcing them to in advance of the upcoming changes. If someone pays by money order or check, now way to track it.

Also, if you do your taxes the right way with the upcoming changes, you can deduct just about anything. Camera for pictures, Monthly internet bill, computer and other related accessories, and not to mention your time. I checked with my father who is a long time tax accountant and knows his way around all the "grey" areas of tax law.

[First Edition]

you can't deduct your TIME, are you nuts?

The laws going into effect only affect payment processors, not auction sites themselves. it is not just paypal, but all payment processors.

[slapped]

Originally Posted by First Edition

you can't deduct your TIME, are you nuts?

The laws going into effect only affect payment processors, not auction sites themselves. it is not just paypal, but all payment processors.

Yea,,He is Talking about things you can Deduct from your Income taxes as "Expenses" in order to Offset whatever Paypal (Or whatever Payment Processor) Reports to the IRS,,,,,

But just so you Know Bmbr34,,,you can Only deduct your "Time" if you are Listing Yourself as a Either Salaried Employee of a Company or an Independant Contractor,,,,

In Either Case,,, this Subject is WAAAAAAY beyond what the Scope of this Thread is about,,,,,

This Thread is About how to create and Maintain Stealth Paypal accounts with this New Legislation,,,,,AND THATS ALL,,,,,,Everyone should worry about the IRS ON THIER OWN,,,,,,,,,,,,,,,

[First Edition]

And how many times doth it need be said? By me, by others, mods need to get involved?

Everyone is missing the point here.......

[x2ruff4u]

I'm not even sure what is going on in this thread anymore. I just know that were all going to be @#$%#@ in one way or another. So we better start preparing for the future now.

[GreenBean]

Thread is being closed for PRUNING. XXXX