Are You Following the New IRS Rules for Ecommerce Sellers?Whether you do your tax return on your own or have a bookkeeper or accountant prepare your return, with the year almost over, how much do you know about IRS rules for ecommerce retailers? Making sense of Internal Revenue Service (IRS) publications can be tough! Most of them start out okay but then you get to sections where you have to determine this or that. We’ve all read those IRS scenarios—“To determine if you can qualify this as an expense, you must meet the following criteria….” and “you must also determine if you qualify for such and such.” It can be mind-blowing and trying to decipher IRS rules for ecommerce retailers including reading those lengthy publications is like reading a long novel—War and Peace for example. the website Beyond415, which offers up all sorts of IRS rules for eBay sellers and other ecommerce stores, “Small businesses are among the largest contributors to the $450 billion a year tax gap, and as they increasingly do business online, the IRS has become more interested. In 2012, the IRS will continue a nationwide Compliance Initiative Project for emerging issues related to ecommerce.” So what are those “emerging issues? Let’s take a look! Yep, That’s Income! IRS rules for ecommerce retailers include some items the IRS might look at so that means you need to keep accurate records. Some of these items include income from:
- Online tip jars where shoppers offer donation
- Referral fees and the sale of your customer lists
- Be sure to reconcile all merchant card payments including deposits to bank accounts.
- Make sure your financial books and records are continually updated.
- An IRS auditor will have the ability to view your “website traffic” to make a determination on just how high your sales volume really is—and they can also view historical data by analyzing your business at Archive.org to help determine ecommerce activity says Beyond451.