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| eBay Responds
to Privacy Busting Payment Legislation
Bill would force retailers to report every transaction to federal
government
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The global online auction giant eBay has responded to
a frightening piece of legislation that will force retailers to report
every transaction to the federal government, warning that it will "negatively
impact individual Internet users, the growth of small businesses, and
entrepreneurial and economic empowerment."
The provision is hidden in Senator Christopher Dodd's
630-page Senate housing legislation and according to the Freedom Works
organization "affects the privacy and operation of nearly all of
America’s small businesses," because it "would require
the nation's payment systems to track, aggregate, and report information
on nearly every electronic transaction to the federal government."
The creation of such a gargantuan database of individual
transactions would be wide open to abuse and fraud and is a complete violation
of the fourth amendment.
"This bill reduces privacy across America's payment
processing systems and treats every American small business or eBay power
seller like a criminal on parole by requiring an unprecedented level of
reporting to the federal government," announced Freedom
Works.
The HR 3221 provision reads as follows.
Payment Card and Third Party Network Information Reporting.
The proposal requires information reporting on payment card and third
party network transactions. 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. Reportable transactions include any payment
card transaction and any third party network transaction. Participating
payees include persons who accept a payment card as payment and third
party networks who accept payment from a third party settlement organization
in settlement of transactions.
A payment card means any card issued pursuant to an
agreement or arrangement which provides for standards and mechanisms
for settling the transactions. Use of an account number or other indicia
associated with a payment card will be treated in the same manner as
a payment card. A de minimis exception for transactions of $10,000 or
less and 200 transactions or less applies to payments by third party
settlement organizations. The proposal applies to returns for calendar
years beginning after December 31, 2010. Back-up withholding provisions
apply to amounts paid after December 31, 2011. This proposal is estimated
to raise $9.802 billion over ten years.
Some have pointed out that the
"exception" appears to negate the inclusion of transactions
under $10,000 but judging by eBay's response this is not the case.
eBay spokesperson Kim Rubey issued the following statement
in response to the proposed legislation.
We believe that IRS proposals to collect additional
information about electronic payments, including the "merchant
card reporting" provision recently attached to legislation being
considered in the House and Senate, should be crafted in a manner that
does not discriminate between payments models and should not burden
the smallest entrepreneurs with new tax compliance demands, nor inappropriately
raise reporting requirements on persons who are not merchants.
We are actively conveying our views to congressional
leaders so that legislation does not overreach and negatively impact
individual Internet users, the growth of small businesses, and entrepreneurial
and economic empowerment.
We join together with other activist groups
in urging anyone who cares about the privacy of their transactions as
well as a retailer's right to not have the government sifting through
their business records to call Congress and tell them to oppose the eBay
reporting provision in the Housing Bill. Call 1-866-928-3035.
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