Internet "Broker" Tax Reporting

eBay Point-of-View:

eBay believes everyone should pay the taxes they owe, and does more than any Internet commerce site to educate small businesses of their tax obligations.
eBay is always responsive to federal and state tax authorities.
eBay should be treated like other major Internet commercial businesses – not singled out merely because it is an auction-style site.
Any IRS proposal to target under-reported income should apply to either ALL online and offline commercial intermediaries or ALL Internet commerce – not merely online auction sites.

The Internal Revenue Service is considering a proposal that would require “brokers” to collect “gross proceeds” information on their users and report it to the IRS. As currently crafted, the proposal would only apply to brokers that effect the sale of personal property for individuals, which would not necessarily apply to the eBay marketplace. However, some IRS officials have proposed changing the definition of broker to apply to eBay.

UNFAIRLY DISCRIMINATES AGAINST A SINGLE BUSINESS MODEL - Changing the definition of broker to target a particular Internet business model is bad tax policy. It is neither “business model neutral” nor “technology neutral.” Small businesses that use eBay use other Internet sites as well. In fact, the majority of small business sales on the Internet occur through non-auction channels. An IRS proposal to change the definition of broker to impact one type of business will simply push small businesses to other readily-available on-line and off-line selling channels.

CREATES BAD DATA - A tax reporting scheme targeted at one Internet business channel when a plethora of other selling channels exist will result in shifting from one business model to others with a resulting lack of comprehensive data.
PROBLEM MAY NOT EXIST - There is no evidence that under-reporting income is more prevalent on Internet auction sites than in any form of commerce, either on or off the Internet.
MAY BE A REVENUE LOSER - Pushing part-time eBay sellers into the arms of tax professionals could end up costing the Treasury money. Millions of small eBay sellers would start “writing off” expenses (portions of their mortgage, auto, etc) against other income.
HARMS THE INTERNET AND THE ECONOMY - Using tax policy to push small businesses and consumers onto less transparent sites, including classified sites or general Internet search, will reduce on-line “trust and safety,” could cost jobs, and make it harder for tax enforcement.