Senate Housing Bill Requires eBay, Amazon, Google, and All Credit Card Companies to Report Transactions to the Government

Maybe we should add "freedom preservationist" to the job titles of politicians.

They might actually take this integrity stuff seriously then (I advocate this for all Democrats, Republicans, and Independents).

Pacific Northwest Blogger: that exemption appears to only be for third party settlement organizations. Aren't credit cards under "payment cards?" If that is the case, the wording states no exemption at all for actual credit records.

Payment settlement entities, including merchant acquiring banks and third party settlement organizations, or third party payment facilitators acting on their behalf, will be required to report the annual gross amount of reportable transactions to the IRS and to the participating payee.

Payment settlement entities - not the consumer

merchant acquiring banks - not the consumer

third party settlement organizations - not the consumer

third party payment facilitators - not the consumer

report the annual gross - not detailed information which goes to the IRS and to us the consumer. We see a total of what we charged. I personally view this as helpful in combating ID theft and credit card fraud.

I still don't see a need for alarm.

Agreed, Pacific Northwest Blogger.

I was simply commenting that your statement in #3 implied that you had misread the quote.

Appreciate the clarification and checking if I misread it. You never know. No harm making sure. ;)

Next week I plan to buy a $14k dollar work station and about two weeks after that a refurbishing job on some equipment for about $15k so yea, it effects people, even individuals.

Who is it that you think originates these purchases?

When you buy a car.

When you buy a piece of property.

When you buy any large piece of equipment.

When you pay a big doctor bill.

Good lord.

Glass is half full or empty depending on if you think about it.

You can see this as solely a privacy issue or look at is a helping protect your line of credit, exposing corruption or helping national security.

I can also add that it will help in monitoring the credit agencies and the 3rd parties they do business with. We all know there's something afoul in those waters. Don't we? In that aspect my glass is half empty.

Hopefully you read my posting as focusing on terms they used and clarifying them.

P.S. $14k for a workstation, dude. That better come with some mighty 3D glasses.

Next week I plan to buy a $14k dollar work station and about two weeks after that a refurbishing job on some equipment for about $15k so yea, it effects people, even individuals.

No it doesn't, read it again. It just forces the payment processor to report the gross revenue that a merchant receives. The IRS is obviously having compliance issues and by requiring the processor to report the aggregate of money changing hands, nothing will be swept under the rug.

Compliance my left foot. Without traceability to the original transaction and the individual that made the transaction there is no way that the IRS could track down any fraud. Sorry Ben you lost that one.

This law is about payment processors reporting a merchant's aggregate income. It's a check and balance. The only losers here are businesses who under-report. For there to be fraud, the processor would have to be in on it, and that's a much larger problem.

Dosen't grock.

When you do your tax return to the IRS as a business, you don't break out separately the income from credit cards, cash, wire transfer, or check. Sorry, business just don't work that way when it comes to their tax returns. What you are saying simply is not how it works and this provides no means for the IRS to determine your aggregate corporate income for tax purposes.

Just as all of your W-2's and 1099's can be added up to show your entire (reported) income to the IRS, this provides a window into ONE source of revenue for a business. Businesses will become aware that their income from payment cards is being reported and they will no longer be able to hide that under the rug and simply not report it. Then it's up to the business to use their records to demonstrate that any amount of that aggregate revenue was not actually income.

This is simply a revenue provision -- it raises an estimated $9B to help pay for other parts of the bill. And the summary that you're looking at is crap, the text doesn't even make sense. It's not a $10,000 transaction minimum, it's that they won't report your total sales unless you have at least 200 transactions or $10,000 in total sales over the year. Wait for the full text of the bill to hit Thomas (the copy that's there now doesn't include the house amendments).

This is simply a revenue provision -- it raises an estimated $9B to help pay for other parts of the bill.

Now we are getting somewhere. So it is a new tax....

Of course....

No, it's not a new tax. It forces businesses to pay taxes on income they should, but currently do not report to the federal government. If $9B in credit card transactions takes place every year that are not already reported to the federal government as income, don't you think that's something that should be addressed? And if not by using an automatic report from the processor of a business's aggregate transaction totals then how do you think it should be addressed?

Ben

It is really hard to not report that income. Any business pretty much has to use their bank statements as part of their tax returns and to no report this really easily traceable income would be just stupid. Have you actually ever prepared a business tax return?

Sorry, I just don't buy your explanation.

Yes I have, many times. If someone were inclined to cheat on their business taxes not reporting the existence of their merchant account and all of the transactions that were processed through it would be a fairly simple way to avoid paying taxes on that income. There is a difference between the IRS being able to audit a business and determine that fraud has taken place and them actually performing the audit. This forces compliance from people who are apt to under-report thinking that they will never be audited.

You seem to expect that people are generally honest and fearful of the consequences of their actions, but the estimated $9 Billion in revenue that this provision raises indicates otherwise.

Out of the $3 trillion in credit card transactions, that is a miniscule percentage and the compliance will cost more than that.

Sorry, still don't buy it.

Compliance costs nothing. It's all electronic. Anyway, I'm tired of trying to convince you -- thought I was providing value but it's falling on deaf ears. You'll see the law when it's passed (or you can read the actual text of the amendment when it gets posted on Thomas), and I can say with certainty that it's not what you've been lead to believe it is.

You have yet to make a case for what you are talking about. I run a business and do taxes every year and it is a lot harder than what you indicate to not claim credit card transactions. It is far more probable that this is a means to track purchases by people which is where this all started.

No, you haven't made a case for yours. The transaction data would be sent in aggregate form -- e.g. the level of detail on a 1099 -- there would be no way to track individual purchases.

I have now read the entire bill. The entire reason this is in here is a means to meet the PayGo rules instituted by the House for bills that cost money. There is absolutely no indication that there is $9 billion dollars in fraud out there by small business and this is just a hideous way to cost companies money in reporting credit card transactions.

As a business that has been audited before, you would have to be an idiot to cheat on a credit card transactions, which have a 100% audit trail. It is far more likely that small businesses fudge on cash transactions, which this bill does not cover.

Sorry Ben this is first and foremost a means to cover the increase in spending that the other aspects of this bill cost the taxpayer. Without that $9 billion in revenue, that bill would have a net cost of $8.2 billion dollars. That is the ONLY reason that completely unrelated part is in there.

It is a tax increase, nothing more and not even a real one.

Yep... and it doesn't do any of the awful privacy invading things that people are saying it does. But in fact it eliminates fraud -- which may be as high as $9B (I'm sure the IRS or GAO projected the fraud, they can't be pulling the $9B out of their asses can they?) or if it doesn't exist that case would result in a net positive cost to tax payers due to the increased bureaucracy. So I was right all along, and we were arguing for nothing, eh? The only point I'd argue is that this is not a tax increase but a spending increase.

It is a fake tax increase. If they don't have the data today, then where are they getting these numbers for fraud? They are pulling them out of their asses as this gives them cover when they increase spending so that they can claim that this increase is actually paid for. It increases the regulatory burden, it is a dramatic increase in record keeping requirements, and it is a privacy invasion as every small business out there that does business with credit cards now has to give up their social security numbers to every business that they do business with.

I am amazed at how you are defending this.

It increases the regulatory burden, it is a dramatic increase in record keeping requirements,

The 3rd party processor already tracks all of this data -- in fact most already charge their merchants upwards of $20 in the form of a monthly statement fee. The increase in record keeping is absolutely zero on the part of the entity that has to do it.

and it is a privacy invasion as every small business out there that does business with credit cards now has to give up their social security numbers to every business that they do business with.

No, they have to give it (not their SS, but their Tax ID number) to the credit card processor. The same entity that already handles all of their transaction processing. The same entity that in most cases already has their Tax ID number on file because they did a credit check before allowing them to open a merchant account. One entity that handles everything.

The fact that you still think that this is something that every customer a business sells to has to do something, means that you did not read the bill.

Ben

I agree, after reading the bill that you are right that it is the aggregate. However, that does not change the fact that there will be further record keeping required, 1099's and other data to meet the requirements (the devil is in the details about this type of new requirement).

What I do soo now as I posted before that this is a scam to get an offset under the paygo rules so that the dems can claim that their spending bill is paid for with an offset.

And I never wanted to be in the position of defending the merit of the amendment or whether it actually did what it set out to do (you believe it won't, and you may very well be right).

All I was getting at in my very first response was that it does not do what everyone seems to think it does. 99% of the comments in this article (and who knows how many other blogs) are based on a misconception. So everyone it up in arms for reasons that are entirely off base. Then the bill passes and none of the blogs or discussions go back an issue retractions for all of the nonsense that was said. And then what happens? People believe that big brother is watching all of their purchases -- and they blame the Democrats for it. Ya gotta love the Internet!

Hey I can admit when I am wrong.... well at least most of the time.

:)

Dude, this is the democrats doing this.

Using credit is not my problem, I/we've always been salaried and couldn't hide anything. But I see this affecting every self-employed person I've ever delt with from the auto mechanic to the septic plumber. I see it as the of a way to begin tracking all their income. "Everyone knows" they don't report, including the IRS, who hasn't figured out how to tap it. Correct me, if you don't see that.