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IRS will close in on income made through eBay, Amazon, and third party platforms

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4 million Americans use sites like eBay, Amazon, Etsy, and other third party platforms to sell things and earn an income. The IRS plans on watching this more closely.

Amazon watched by irs for income made in third party platforms

According to ABC 7, starting this year the “honor system” will no longer be in place and all third party sellers will no longer be allowed to self report their income.

These sites used to remain out of the eye of the IRS, allowing those making money to not necessarily need to report their income if they made under $20,000.


Now, all income will be required to be reported to the IRS

This means taxpayers using these sites will receive form 1099s in the mail for their earned income and the agency will be collecting taxes from that income. The requirements are for people who make over $600 during the year.

If you fail to report, you run the risk of major penalties. ABC 7 reports one person who did not share that they made $40,000 in Amazon sales in 2020. The IRS demanded $14,000 in taxes and penalties for failing to report.


Not only did they not share with the IRS that they didn’t make $40,000, but they say they have no idea what is going on. They say they did not sell anything on Amazon and now they’re forced to try to prove to the agency that they never received any income from Amazon.

In their attempted, they contacted both the IRS and Amazon. Amazon sent him back to the IRS and the IRS just sent another letter saying the same thing.

When ABC 7 reached out to Amazon and the IRS, Amazon blamed the IRS and the agencysaid they needed to file a report for identity theft. He was informed that the investigation could take up to a year but he won’t need to do anything.


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