Tax, Taxes & the IRS

[BUDDIEE18]

Amazon - $AMZN and Big Brother

Warning: This article is fairly long, and is mostly about a
particular situation which, by itself, is pretty dang trivial,
though it is a symptom of the "Big Brother" mentality that so many
Americans have. (Those who sell things on Amazon might have a
personal interest in it.)

I sell my books through Amazon.com. Apparently there are new IRS
regulations requiring the reporting of certain payments, such as
what Amazon pays to those who sell things on Amazon, if--and only
if--the seller makes more than 200 sales in a year AND makes over
$20,000 in a year in sales. I barely meet the first criteria, and
don't nearly meet the second criteria (unfortunately).

However, Amazon.com is now telling anyone who sells stuff on Amazon
that they must supply their Social Security Number (or other TIN),
no matter how much they make in sales, if they exceed 50 sales in a
year. Considering how huge Amazon is, this would no doubt include
hundreds, if not thousands, of merchants who do not at all meet the
legal criteria. Here are excerpts from my exchange with Amazon:

1) Amazon (from an e-mail they keep sending out): "beginning with
the 2011 tax year, new IRS regulations require Amazon to file a
Form 1099-K for sellers who exceed $20,000 in unadjusted gross
sales and 200 transactions in a calendar year. To assist in
complying with these regulations, we are requiring sellers who
exceed 50 transactions in a calendar year, regardless of monetary
threshold, to provide their tax identity information."

See the bait-and-switch? They pretend that demanding Social
Security Numbers from everyone with more than 50 sales is being
done "to assist in complying with these regulations," when that's
obviously not true. In the case of those who don't meet the
200/$20,000 requirement, Amazon is just making up their own
requirement, completely unrelated to what the IRS requires.

2) Me (in a message to Amazon): "As you know, pursuant to 26 USC
6050W(e)(1), a return (Form 1099-K) is required only when the
"gross amount of the reportable payment transactions" exceeds
$20,000 in any given year. Because that is not the case in my own
situation, there is no legal requirement for Amazon.com to file a
return regarding transfers made to me, and therefore no legal
requirement for me to supply any Taxpayer Identification Number to
Amazon. As such, your request for my TIN (which would be my Social
Security Number) has nothing to do with any legal requirement, but
is simply a request from a private business (Amazon) to a private
individual (myself) to supply a Social Security Number, and really
has nothing to do with the new federal reporting regulations."

But wait, there's a twist. My note continues:

"As you may know, requiring an individual to provide his Social
Security Number (and in some cases, even just requesting it), when
there is no reporting requirement or other law mandating it,
violates state law in Alaska, Kansas, Maine, Rhode Island and New
Mexico."

So I objected to their new policy, and objected to them pretending
they're just doing it to comply with the new rules, when that is
patently untrue. Their response? They repeated their policy, and
ignored the issue.

3) Amazon: "Beginning in 2011, sellers who exceed 50 transactions
in a calendar year, regardless of sales volume, will be required by
Amazon to provide taxpayer identification information to Amazon. If
the required information is not provided to Amazon by December 26,
2011, your Amazon selling privileges will be suspended until you
provide the information."

Um, yeah. They already said that.

4) Me: "Doing a cut and paste of what you sent before is not
answering the question. You are requesting an SSN, and threatening
to deny services if you don't get it, even though you have no legal
basis for doing so. ... You are asking for something you obviously
don't need--which you've done without before, and which you're
specifically not allowed to have in several states--and pretending
it has something to do with the new IRS regulations, when it
doesn't."

Their response to that succinctly summed up the situation.

5) Amazon: "We understand that your sales does not increase (sic)
$20,000 annual threshold. However the TIN information is required
if the seller crosses 50 transactions in a given year irrespective
of the sales volume. The sellers having more than $20,000 in
unadjusted gross sales, and more than 200
transactions should file a 1099 K form. However we require the TIN
number if the seller is selling more than 50 items a month."

So they acknowledge that the new rules do NOT apply to my
situation, but proclaim that they require me to provide my Social
Security Number anyway, as a condition of receiving their services.
Then they again sent me the first e-mail (at the top) proclaiming
that the need the number to comply with the new regulations. So I
responded.

6) Me: "Why do you keep lying, claiming you are demanding TIN
numbers 'to assist in complying with these (new IRS) regulations,'
when you are demanding TIN's from people who don't at all fall
under the new rules, such as myself? Anyone making under $20,000 a
year in Amazon sales is NOT SUBJECT to the new rules, and you know
it. When you demand a TIN from someone who does not meet the
criteria, such as myself, you are NOT complying with regulations;
you are making up your own demands, without a shred of legal basis,
and in direct violation of several state laws."

I would bet money a lawyer wrote their response, since it just
drips with spin and obfuscation.

7) Amazon: "Please note that it is not only $20,000 in gross sales
but they take into consideration if you exceed 200 transaction as
well. The new Internal Revenue Service (IRS) regulations require
that US third-party settlement organizations and payment
processors, including Amazon, file Form 1099-K to report unadjusted
annual gross sales information for sellers that meet both of the
following thresholds in a calendar year:

- - More than $20,000 in unadjusted gross sales, and
- - More than 200 transactions."

Notice they just acknowledged what I said: both criteria must be
met, and I only meet one of them. Nonetheless, they then repeat the
lie, by adding this:

"Upon reviewing account I see that you have exceeded the IRS
threshold and have about 296 orders placed in a calender year hence
please understand that this decision is ultimately left to you if
you wish to provide info or not but as per the rules you are
required to enter this information before the 26th of Dec to avoid
suspension of your account."

So they are STILL pretending that demanding a number from me, as a
condition of rendering services, is about complying with the new
IRS rules, instead of about complying with something Amazon just
made up on its own.

8) Me: "I asked why you keep lying. Your response was to lie again.
As your own e-mail says, the new 1099-K requirements are for those
who meet BOTH criteria: over 200 transactions AND over $20,000 in
sales in one year. I meet the first, not the second (not even
close), which means I am NOT subject to the new rules. Yet you
continue to demand a TIN, as a conditioning for rendering services,
when doing so directly violates state law in several states (not in
Pennsylvania, however). Why can't you at least be honest, and admit
that in many cases, your request for these numbers is UNRELATED to
the new regulations? Again, I don't understand why Amazon would
expose itself to a lawsuit from anyone residing in those states
where it is illegal to demand an SSN as a condition for rendering
services. But at least please stop pretending that requesting MY
Social Security Number--and however many hundreds of others in my
position--has ANYTHING to do with the new rules. You know that it
doesn't."

9) Amazon: "It is Amazon’s policy for Amazon.com sellers that
exceed 50 transactions in a calendar year, regardless of sales
volume, to provide taxpayer identification information to Amazon.
If the required information is not on file by December 26, 2011,
your Amazon selling privileges will be suspended until you provide
the information. Please understand that this is a fixed constraint
and that we are unable to answer further correspondence about this
issue."

Well, at least that time they didn't pretend it was because of the
IRS rules that time; they just said it was "Amazon's policy." (They
still didn't mention the fact that their "policy" violates several
state laws.) Ultimately, the folks at Amazon will decide whether to
require Social Security Numbers as a condition of rendering
services, and I'll have to decide whether to do business with them
or not.

But what's worth noting here is not about my case. No doubt many
readers of Freedoms Phoenix are well aware that when the Ponzi
scheme known as Social Security was pitched to the masses, the
politicians zealously promised that the new numbers would never be
used for general identification purposes. For a long time, the
cards had printed right on them that they are not to be used for
that. Well, as I often say, whenever a politician says, "The reason
we're doing this is not because..." whatever comes out of his mouth
next is the exact reason they are doing it.

Today, Social Security numbers are used all over the place, for all
sorts of things, and not just by the parasites in "government."
It's convenient and easy, so most people can't imagine why we
shouldn't. It makes it so easy to keep track of everything, create
huge data-bases, and so on. What could be wrong with that? If you
have to announce your "government"-assigned number to get a
driver's license, or open a bank account, who cares?

It's about privacy versus surveillance, and freedom versus control.
Of course, the claim will always be made that privacy and freedom
can create opportunities for people to do bad things. Well, no
kidding. So why not just cage everyone, if it would make us all
safer? Yes, a secret bank account, without even a name or a Social
Security number, could be used by terrorists or criminals! Of
course, it could also be used by good people, for perfectly moral
purposes. And yes, when something shady happens, having a huge
system of surveillance and record-keeping can making finding the
bad guy easier. So while we're at it, let's install "government"
cameras in all of our houses. Hey, wouldn't that make it even
easier to catch bad guys?

Amazon wanting my number, even though the "government" isn't even
requiring it, is pretty darn trivial in the big picture. But it's
one of a thousand ways in which the surveillance-and-control
society inches forward. And you can bet that whatever records any
company that big keeps, the feds can snoop into it whenever they
want, with or without a warrant, and with or without the knowledge
of the company.

"Hey, we just want to know, and keep track of ONE tiny little extra
tidbit of information about you. What's the problem?" The problem
is that all of those tiny little tidbits add up to everything. And
if, every inch of the way, we just quietly go along to make things
easy, where do you suppose we will end up?


Larken Rose
[e-mail]
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