12:44 PM

2.20.07: eBay fighting IRS demand for seller information

EBay is fighting a White House plan to force it to turn over sales data to the IRS, The Financial Times says.

There are millions of eBay sellers not paying tax, the government says. Probably $2 billion in unpaid taxes could be collected if eBay reported sellers who make $5,000 a year on eBay.

But an eBay spokesperson said: “We do not believe it is our responsibility to serve as the go-between. We believe that it is the seller’s responsibility.” The company pointed out that many users file self-employment and business tax returns based on their eBay income.

Ebay especially doesn't like being singled out when Craigslist and other online services that don't use an auction format are not being asked to inform on their customers. And it's taking its arguments to Washington.

Representative Rick Boucher, a member of the internet caucus in Congress, said he had been in touch with eBay and would rally opposition on Capitol Hill.

Among the arguments, legalistic debates over the definition of "auction":

“We do offer sellers auction-like transactions but they are not auctions,” said a spokesperson, citing technical definitions in state law that an auction has no fixed end-time.