PayPal giving IRS transaction records

[The Buzz]

According to Casino Gambling Web, PayPal is handing over thousands, perhaps millions of customers' transaction records to the IRS. The story suggests that the action could have an impact on Internet gamblers, but more likely result is the the US is going to go after small businesses (including online gambling affiliates) who have not reported business income on their federal taxes.

Full story here ... http://www.casinogamblingweb.com/gam...irs_48946.html

More on the issue generally from the Dayton Business Journal, published a few weeks ago.

The appeal of the reporting requirement was summed up by Sen. Max Baucus, D-Mont.

"This proposal does not raise taxes on anyone," said Baucus, who chairs the Senate Finance Committee. "These information reports would just cause people to file more accurate returns."

Opponents of the proposal doubt it would raise much revenue, however. Credit card receipts already show up on a merchant's bank statement, so tax cheats aren't likely to underreport this income, said Kristie Darien, executive director of the National Association of the Self-Employed.

The legislation, however, would require credit card processors to withhold taxes on payments to a merchant whose taxpayer identification number (TIN) couldn't be verified. But there are bound to be errors in the TIN verification process, Darien said, meaning some small businesses could have 28 percent of their credit card reimbursements withheld until the errors are corrected.

That could "put a severe strain on millions of American families counting on a self-employed breadwinner," she said.

Full Dayton Business Journal story here ... http://dayton.bizjournals.com/extrae...?market=dayton

[Doolally]

Paypal started doing this with the UK authorities last year. I'm not sure what impact it has had but I've seen a few reported cases of people due additional taxes due to ebay selling.