The U.S. Treasury Department wants to crack down on Internet businesses like eBay and Amazon.com and require them to share their customer's personal data with the Internal Revenue Service.
The proposal is an effort to collect unreported income generated by online sales.
It would require online "brokers" to file income statements for all customers who use their sites and have 100 or more separate transactions that total $5,000 or more per year.
The information that online brokers would have to collect includes customer's names, addresses and Social Security numbers or taxpayer identification numbers.
The proposal would go into effect on January 1, 2008.
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Ari Schwartz, deputy director of the CDT says that while the IRS only wants income statements from businesses that earn $5,000 from 100 transactions, most online sites will record personal information from everyone who uses their site. The CDT raises the issue of what this proposal could do to ecommerce. While no lawmaker has come out in support of the proposal, it is in the President's 2008 budget and the fear is it could slip into a larger legislative package. It would seem companies such as
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The reason for that is the sites would be liable under the proposal.
"Forcing businesses to collect SSNs could have a chilling effect on legitimate e-commerce if consumers balk at providing their SSNs for simple transactions -- something most people are not accustomed to doing."
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