How many years back might the IRS go on an Ebay Sales Audit ?

[pierre-le-rosko]

 I haven't sold in 10 years,but if I do come back to active selling I want to use my old ID & Pos Ratings.Does the IRS go back 10-15 years on Ebay Sales ? I beleive legally they can,just want to get informed if I take the plunge.Thanks for any and all expert opinions,personal experiences,etc.

[stainlessenginecovers]

Usually go back 3 years and if they find something substantial, they can go another 3 years. 

[a_c_green]

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@pierre-le-rosko wrote:

Does the IRS go back 10-15 years on Ebay Sales?

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I'm not sure the IRS goes back 10-15 years on anything, but certainly not to investigate an eBay seller who hasn't sold anything since. 

Putting it another way, your starting to sell again now isn't going to trigger any kind of deep-background audit of whatever you've been doing in the past. Just sell what you can now, calculate your net income on Schedule C for tax purposes, and that's that.

[nobody*s_perfect]

To go back that far, they'd have to have strong evidence of fraud, which would not apply  in your case.

[farmalljr]

The IRS can go back as far as they want to, if they have a reason to. However, you not selling in a decade would not trigger an audit that far back. That is unless you have been hiding other sources of income that would cause them to investigate ALL of your possible incomes. 

In other words, unless you have been doing something to grab their attention, you likely have nothing to worry about. Just be honest when reporting to the IRS. No big deal.

[donsdetour]

they can go back as far as they can find recorded for.

[monroe67]

"Does the IRS go back 10-15 years on Ebay Sales ?"

I seriously doubt that the IRS has any particular focus on eBay sellers. 
Or that they would try to dig back that far into anybody's finances unless they found probable cause to do so.  

[onefootflipper]

You have zero to worry about your decade old sales. 

The IRS definitely wants sellers to pay taxes but ebay sellers are not a huge audit focus, auditing them largely isn't worth the labor cost. The audit money is in the wealthy people with complicated returns and multiple strange things going on and in the low income people who are cheating the system in some way

You see thread after thread and post after post of people worried about this both on these boards and in various reseller groups, but you hardly ever see any posts of anyone who actually got audited and the few you do see are usually not full audits but the IRS wanting clarification of something.

I know a ton of resellers, many having been full time for years and I don't know a single one who has ever been audited.

[dbjewelry]

I have worked retail management in a lot of big companies..Target, Staples, and others. At every single company the requirement was that any financial records needed to be maintained for 7 years. After 7 years the stores would securely dispose of any paperwork that they had at the location. If big box companies are only required to keep 7 year records I cant see how they would hold a small ebay seller responsible for longer.

Also found this on the audit FAQ page at irs.gov directly copied from the page.

"Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually don't go back more than the last six years."

[tarheeltreasurehunt]

I got an audit over Ebay sales.  Let me tell you...it's a nightmare.  Makes me not ever want to sell anything on Ebay ever again.

[golfingaddict]

There is no time limit if fraud or tax evasion is suspected.

[simply-the-best-for-you]

This is not specific to eBay, just audits in general.  Usually 3 years (I think it used to be 7 years), but if they suspect something is amiss, they can go back as far as they want, there is no time limit.  

I keep all my tax records forever, same with any other important documents. 

[stainlessenginecovers]

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@tarheeltreasurehunt wrote:

I got an audit over Ebay sales.  Let me tell you...it's a nightmare.  Makes me not ever want to sell anything on Ebay ever again.

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@tarheeltreasurehunt Curious; why was it a nightmare? Were there 'things' that you either didn't report or 'over stated' deductions or didn't have 'records' for? 

[dirk12955]

In General,    The ebay sales records are probably not as important than Bank records.  

The easiest way to find a tax cheat is to look at the deposit records.  Bank,  Paypal as examples.

Pretty easy to pin down the tax payer that claims 50K in income but ran 150K  (Or more) 

thru Paypal or his checking account.

Not being in a cash business,  Everything is on a computer file somewhere.   How long does 

a bank keep records?     There's the question. 

[adamcartwright]

@tarheeltreasurehunt 

Curious, what was a nightmare about it?
Were you able to produce all your receipts and documentation?

A friend of mine was audited after starting a new business.

Believe it or not -- she told afterwards that me she's no longer afraid of the IRS and has a "bring it on" attitude.