
Housing Bailout Bill: Say Goodbye to Untaxed Internet Transactions - soundsop
http://nestmannblog.sovereignsociety.com/2008/07/housing-bailout.html
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ckinnan
This is a thoughtful piece. The provision really does open the door to a far
greater invasions of privacy. That eBay powerseller, for example, will also
have their Social Security number and other personally identifiable info
stored in this database. And because it only tracks gross revenues, it won't
work as planned, leading to lots of IRS audits just because of a high gross.
So the next step, around 2015, will be collecting transaction details.

Its also a new business risk, since any breach of this data will expose
critical operational details.

The worst part: Congress never had an up or down vote on this provision...it
was thrown in the housing bill at the last minute for procedural reasons.

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rcoder
We're talking about the IRS here. They _already_ have records (including
SSN/Tax ID, name, address, etc.) for every person and business in the country,
so I don't see how this could possibly be some major new security risk.

The argument about gross revenues is vacuous, too, since the entire point is
to compare the _reported_ gross and deductions against the known online
revenues. You're expected to include all your income in a tax return, deduct
where appropriate, and pay your fair share of tax. This new reporting scheme
really just reduces the odds that someone could dramatically under-report
their revenue without the IRS noticing.

It may also be worth remembering that the IRS already has the right to ask for
bank records during an audit, so this won't give them access to any
information they couldn't get their hands on already.

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ckinnan
So why do we need these new databases then? In America you are presumed
innocent, this new data regime assumes guilt and is open to abuse. Its a
slippery slope towards greater supervision and control of ecommerce, with
major new costs for businesses-- which have to maintain these data pools.
Tracking gross revenue will actually lead to more audits of innocent
businesses. Check out this testimony:

<http://www.cdt.org/testimony/20080612sohn.pdf>

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rcoder
I'm all for personal privacy and a healthy cash economy, but this won't expand
the powers of law enforcement (who can already subpoena your credit card
records more or less at will) or change the tax code. All it will do is give
the IRS _some_ chance at tracking down the most flagrant violators amongst
online businesses.

If you are running a small business, fail to keep accurate track of your
income and expenses, and are under-taxed because of it, you are committing tax
fraud.

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gills
I agree.

Why should electronic transactions be taxed any differently than traditional
transactions? "Because the internet is special?" Give me a break.

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newt0311
No, because normal transactions shouldn't be taxed either. At least not as
heavily as they are now. Electronic transactions happen to be one of the few
parts of the system that actually work.

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gills
While I agree with you, evading taxation is not exactly the way to change the
system. I feel like I've been harping on this lately...but VOTE to fix the tax
system, don't break the law. Every time someone avoids paying a tax, big
brother goes out and takes it out of someone else ("you"?) or borrows it
(costing more from "you" in the long run).

Still going to defend tax evasion?

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newt0311
umm. Not charging state sales tax for online websites is usually legal as they
are across state lines and states have no power to tax beyond their borders.
This has already been well documented in several supreme court decisions. So
no, I ado not advocate tax evasion. I do advocate not having a sales tax which
online sales accomplish legally because they are across state borders.

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jobeirne
I have a feeling we're enjoying the golden age of e-commerce right now. With
taxation looming, things will only get worse.

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rationalbeaver
You know, if there's one thing I'm not a fan of, it's taxes.

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helveticaman
This will fuck startups up pretty hard. It's the exact opposite of what Mark
Cuban proposed for small businesses. I'm not saying his approach is right, but
this looks pretty bad.

