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Tue Dec 5 2017 22:52:07

eBay Seller of Used Cosmetics Cops to Tax Fraud

By: Ina Steiner

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If you sell online, report your earnings to tax authorities - that's the lesson an eBay seller learned after being sentenced to three years' probation, including a period of home confinement, and ordered to pay a fine. 

While prosecutors focused on the tax fraud aspects of the case, we were interested to learn how the seller obtained the goods she sold. According to a US Attorney, who had urged the court to sentence the seller to jail time, the seller obtained the goods through her husband's waste-disposal business which was allegedly contracted with QVC to dispose of returned cosmetic products.

Prosecutors said this was not a small-time operation - they said the seller sold online to consumers and also had twenty-three distributors that resold her ill-gotten items.

The US Attorney said there was a known failure on the part of the seller to report $1.6 million in income selling used and returned cosmetic products from 2009 through 2014.

It seems it can be lucrative to sell online when your product costs are zero - as long as you don't get caught cheating on your taxes.




Comments (12) | Permalink

Readers Comments

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

This user has validated their user name. by: iheartjacksparrow

Wed Dec 6 12:23:34 2017

My question: Who is dumb enough to buy used cosmetics? I would think that anything touching a person's face or lips would have the potential of transmitting diseases or other contaminates.  

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

This user has validated their user name. by: Ina

Wed Dec 6 16:39:08 2017

Likely not marketed as used or even as returned goods, since the seller wouldn't have wanted to advertise the fact that she wasn't authorized to have the goods.

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

This user has validated their user name. by: LasVagueness

Thu Dec 7 00:17:02 2017

Selling used cosmetics is verboten on eBay.  

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

This user has validated their user name. by: LasVagueness

Thu Dec 7 00:21:22 2017

I feel sympathetic toward eBay cosmetic sellers but this—along with a staggering amount of counterfeits—are reasons I *do not* purchase cosmetics on eBay. The potential for contamination, improper storage, and heavy metals (lead!) are all too real.  

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

by: Barbbie This user has validated their user name.

Thu Dec 7 00:52:47 2017

Gross!
But, 1.6 million!
Wonder if the husband still has the QVC contract?

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

by: Floria This user has validated their user name.

Thu Dec 7 03:11:52 2017

I don’t buy anything other than it’s sealed and boxed. You can get very sick from contaminated cosmetic item that have been used.

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

by: bb6 This user has validated their user name.

Thu Dec 7 08:57:34 2017

She was making around $267K a year and didnt think she had to pay taxes??? If you make over $20k and over 200 transactions paypal sends a 1099 to the IRS for you. There is no way around it. This rule was put in place specifically to catch people like this.  I'm surprised it took them 6 years to catch up with her.  It's her own stupidity that got her caught.  The IRS normally gives you a little bit of time to fix any errors on taxes but when you pull stuff like this for an on going amount of time they are going to put their foot on your throat.

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

by: epuise This user has validated their user name.

Thu Dec 7 09:36:53 2017

anyone who buys cosmetics which infiltrate the body thru pores from anywhere but a reputable retailer is risking their health... any seller who does not file & pay income taxes is an idiot.

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

This user has validated their user name. by: Marie

Thu Dec 7 12:00:27 2017

Setting aside the subject of used cosmetics, I don't think that is really the point of the story.  Far too many people think that they don't need to report their income from internet sales.  Way to many people.

This was represented here back when the 1099s that PP now issues were just a rumor, then a full blown discussion and finally a reality.  OMG there were so many people extremely upset by this process.  The only people that objected to the 1099s were those that were trying not to pay their share of taxes plain and simple.

IMHO the $20.000 threshold by the IRS for money transmitters to release a 1099 is to high.  It is my opinion that this should be dropped down much lower.

This story shows that some take this seriously as it should be.  It is people such as the characters in this story that cause the shortage of tax dollars to pay for much needed federal programs and much more.  People need to be accountable for their own actions or lack of action as it is in this case.

I for one am glad the US attorney pushed for jail time.  While that didn't happen, hopefully that home confinement is for a good period of time.  The behavior of this business person was criminal.  It is not a victimless crime.  We are the victims.  All the actual taxpayers are the victims.  

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

by: Whatever This user has validated their user name.

Thu Dec 7 14:58:48 2017

1st mistake - no declaring your income -BIG nono - she probably would still be selling

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

by: mcposty This user has validated their user name.

Thu Dec 7 19:05:10 2017

Libertarian for the win, to many taxes..but..the person is really stupid for not paying taxes on that much money! The us will definitely want to get into that piece of pie.

eBay Seller of Used Cosmetics Cops to Tax Fraud   eBay Seller of Used Cosmetics Cops to Tax Fraud

by: Eagle This user has validated their user name.

Sat Dec 9 23:11:58 2017

Home confinement to an internet vendor as punishment is like a slap on the wrist? I consider being a prisoner in my own home anyway running my internet biz and it's punishment without a court order or probation?  



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