Ebay resists proposed reporting rules
February 20, 2007
Ebay (NASDAQ: EBAY) says that the administration of US President George W. Bush is trying to force it to inform on sellers who use its online auction site. The company said that they are willing to co-operate in individual Internal Revenue Service (IRS) investigations, but that it is not their place to report on seller’s income from the site. That, they say, is the individual seller’s responsibility. Ebay has more than 200 million registered users, and says that around 4.3 million of those users rely on the site for a significant part of their yearly income.
The plan reportedly would force Ebay and other online auctioneers to report American sellers who complete more than 100 transactions worth at least $5,000 each year to the IRS. The new rules are planned to be implemented from 1 January 2008. Besides putting it in the position of go-between for the government, Ebay says that the plan is unfair because it does not target online classified advertisement sites like Craiglist.
The online auctioneer is actively lobbying in Washington and will not only challenge the Treasury Department’s authority to require reporting of some of its users activity but will also challenge the legality of the proposed rules, saying that while they offer “auction-like” transactions, they are not in reality auctions because they have a fixed ending time. At least one member of the US House of Representatives has said he would work with Ebay to oppose the proposed rules.