A Statement Regarding the Future of the Forum

[James R Gordon]

Sandy said:
“There is a new IRS rule (for 2022) that requires PayPal to notify the IRS if an account has collected more than $600 during the tax year. That's the bad news. The good news is that rule only applies to payments for goods and services that you are selling.
When you send money to a PayPal account, you need to specify whether the money is for the purchase of goods and services, or if it is a personal payment to a family member or friend. The latter would be used in our case. In fact, it is common practice for a person who paid for dinner to ask friends to reimburse him through his PayPal account. “

Sandy I have nowhere near the understanding of IRS regulations as you do. If we are to use the Paypal account to collect monies to pay for a service - and the subscription is paying for a service from Invision. We are monthly paying Invision the cost of hosting the EF site - then I am puzzled how that would qualify as personal payment to family member or friend.
You know the code far better than I. But the function of this account appears to run against what I imagine is implied in the meaning of personal payment to a family member or friend.

By the way the jump from $70 to $120 is all about bandwidth: the number of users on line and posting and searching.  As pointed out we are coming close to the $120 bandwidth.

James

 

[Sandy Larsen]

On 8/1/2022 at 2:07 PM, Jean Paul Ceulemans said:

Another issue is the history on EF, I hope for that price there is a way that can be preserved ? Is it in the contract ?

 

Jean Paul,

I checked, and yes the forum data belongs to owner of the Invision account.

I also found that the data is stored in a standard format (mySQL) and can be ported to another forum site.

 

[Guest]

21 minutes ago, Sandy Larsen said:

 

Jean Paul,

I checked, and yes the forum data belongs to owner of the Invision account.

I also found that the data is stored in a standard format (mySQL) and can be ported to another forum site.

 

This was a major issue, so that's really good news, thanks !

[Sandy Larsen]

3 hours ago, James R Gordon said:

Yes there is a Paypal avvount attached to the EF, The account linked to Invision is actually a bank account. I use the paypal account as a collection account.

 

James,

I'm a bit confused. Here is what you write, and the way I understand it:

• James says:  Yes there is a PayPal account attached to the EF
  (Sandy hears:  The PayPal account is linked to the Invision account.
• James says:   The account linked to Invision is actually a bank account.
  (Sandy hears:  No, it is a bank account that is linked to the Invision account.
• James says:   I use the PayPal account as a collection account.
  (Sandy hears:  James uses the PayPal account to collect money.

Those first two statements seem to contradict. Please clarify.

 

[James R Gordon]

Sandy,

The references to the Paypal account was not the central point of my post. You announced to the forum that the new paypal would be desinated one for contributing funds to friends and family.

Although I do not know all the details of US financial laws, I questioned that if the paypal account is a means to collect funds to pay a commercial organisation bills - and indeed we would link that account with that very commercial organisation whose bills we are paying - I am curious why the authorities would not question how such an account could be defined simply as a means to raise money for friends and family.

James

[Sandy Larsen]

3 hours ago, James R Gordon said:

Sandy I have nowhere near the understanding of IRS regulations as you do. If we are to use the Paypal account to collect monies to pay for a service - and the subscription is paying for a service from Invision. We are monthly paying Invision the cost of hosting the EF site - then I am puzzled how that would qualify as personal payment to family member or friend.
You know the code far better than I. But the function of this account appears to run against what I imagine is implied in the meaning of personal payment to a family member or friend.

 

I got the phrase "personal payment to a family member or friend" (paraphrased) from a PayPal press release announcing the new IRS rule. It's just a friendly of saying that the transfer is unrelated to business and therefore there are no taxes involved.

When a forum members send a donation to the forum owner's PayPal account, they should mark it as a "Personal" transfer because they are not buying anything from that person. That way the owner of the PayPal account won't have to pay taxes on the money collected.

Now, when Invision receives the money, they will be the ones who pay taxes. Because they are the business that sold a service. (Theoretically speaking, in America businesses pay taxes on profits.)

 

[James R Gordon]

Sandy,

I am not sure that “the transfer is unrelated to business and therefore there are no taxes involved.“ That may be your view, I am not sure the IRS will see it that way. We rent this site from a commercial bussiness and we collect monies in order pay a subscription to that same business

You say when a forum members send a donation to the forum owner's PayPal account, they should mark it as a "Personal" transfer because they are not buying anything from that person. But is it personal? The funds being raised are in order to pay a business its rent. Will the IRS see a point of interest in members labeling funds as personal when those same funds are specifically to pay the business from whom we rent this sit???

James.

[Bob Ness]

Well as best I can figure we're supposed to donate $5 which is what I did. Let me know if that is wrong.

Edited August 6, 2022 by Bob Ness

[James DiEugenio]

So did I.  I guess we are waiting to see who is going to step up and take the reins. 

[Sandy Larsen]

6 hours ago, James R Gordon said:

Sandy,

I am not sure that “the transfer is unrelated to business and therefore there are no taxes involved.“ That may be your view, I am not sure the IRS will see it that way. We rent this site from a commercial bussiness and we collect monies in order pay a subscription to that same business

You say when a forum members send a donation to the forum owner's PayPal account, they should mark it as a "Personal" transfer because they are not buying anything from that person. But is it personal? The funds being raised are in order to pay a business its rent. Will the IRS see a point of interest in members labeling funds as personal when those same funds are specifically to pay the business from whom we rent this sit???

James.

 

James,

If it gives you any confidence in what I say about taxes, I owned a business (New Wave Instruments) for 33 years and I did my own financial accounting and filed my own income tax forms with the IRS every year. I understand the fundamental principles of business and personal taxes.

For the most part, the only situations where an American must pay a tax is:

1. If we own certain property, we pay a property tax to a local authority.
2. If we make a profit on the sale of something, or earn a salary or wage, we pay income tax to the U.S.  government (IRS) and to our State government if they impose an income tax.
3. If we sell a good or service to an end user, we must collect a sales tax and give it to a local authority.

#1 doesn't apply to us because there is no property involved. #2 doesn't apply to us because we are not making a profit and are not earning an income. #3 does not apply to us because we are not selling anything.

Only Invision has to be concerned about taxes. They will (#2) make a profit from the money we send them, so they have to pay income taxes on that. And they are (#3) selling a service to us, and so will be required to add a sales tax to their monthly fee and collect that from us.

The bottom line is that we  won't owe any taxes at all. (After Invision collects the sales tax from us, which is done automatically).

 

Edited August 6, 2022 by Sandy Larsen

[Sandy Larsen]

27 minutes ago, Sandy Larsen said:

The bottom line is that we  won't owe any taxes at all.

 

And if donors mark the Personal (Family & Friends) check box when they donate with PayPal, everything will work out right. That is the proper thing to do.

If instead all the donors mark the Business (Sold Me a Good or Service) check box, and the total amount collected that year is over $600, PayPal will send a 1099-K notice to the IRS telling them what the total amount is. This tells the IRS that the PayPal account owner has a business and might have earned a profit on that >$600. This, of course, would be wrong.

 

Edited August 6, 2022 by Sandy Larsen

[Sandy Larsen]

8 hours ago, James R Gordon said:

The references to the Paypal account was not the central point of my post. You announced to the forum that the new paypal would be desinated one for contributing funds to friends and family.

 

James,

The reason I wanted to know if your PayPal account is linked to the Invision account is because I can't see any way of doing that.

I've looked through my PayPal account, and it appears that I can link it only to bank accounts and credit card accounts. I can't see a way to link it to a service provider or merchant. So I'd like to know how you did that. (If you did do it.)

 

[James R Gordon]

Sabdy,

As I explained to you my paypal account is a collection account.

It was Invision who said the monthy subscription could be linked and the monthly payment could be taken from that account.

I never linked my paypal account I linked the bank account.

James

[James R Gordon]

On August 1st I initiated this thread. The burden of being responsible to Invision had got me down. I was asked by Ty Carpenter did my statement mean I was open to someone else taking ownership of the forum. I answered Yes and pointed out the financial obligations that would result.

As well as being exhausted and depressed at that point, I also misunderstood Ty’s question.

If my answer on the 1st - as well as subsequent comments - have allowed members to believe that new ownership of the EF is now a possibility I have to make clear that is not going to happen.

I have no intention of resigning and I bitterly regret that my responses have given rise to such speculation.

The ownership of the EF will remain with the present admin team.

James

 

[W. Niederhut]

1 hour ago, James R Gordon said:

On August 1st I initiated this thread. The burden of being responsible to Invision had got me down. I was asked by Ty Carpenter did my statement mean I was open to someone else taking ownership of the forum. I answered Yes and pointed out the financial obligations that would result.

As well as being exhausted and depressed at that point, I also misunderstood Ty’s question.

If my answer on the 1st - as well as subsequent comments - have allowed members to believe that new ownership of the EF is now a possibility I have to make clear that is not going to happen.

I have no intention of resigning and I bitterly regret that my responses have given rise to such speculation.

The ownership of the EF will remain with the present admin team.

James