the IRS ruled that third-party payment processors such as EBay’s PayPal service do not need to collect taxpayer identification numbers or withhold taxes from sellers who have 200 or fewer transactions in a year.

Here’s the IRS notification…

A large number Ebay sales folks were about to have to try to unload their products on another platform like Craigslist as a result of this ruling and, of course, that could hurt their business and Ebay’s. If the items were personal use items, they might not have even been subject to tax, but the broad ruling made no such distinction (how could Ebay know for sure anyway?).

At 200 transactions a year, you’re selling about one item per business day on average. Unless y0u’re making $500 to $1,000 profit per item, it’s probably a nice little side income or part of a larger business mix. It may not be “net income” at all actually but the law made no distinction. Having to move from Ebay to Craigslist would have definitely reduced the odds of linking to customers in my opinion and hurt these businesses. Thankfully everyone got a reprieve!

Related Item (affiliate link): Want to sell your ebay items on Facebook? Here’s how….

The IRS has plans to tax all that money you’re making online! Of course. This was prompted by an IRS agent who got caught selling designer accessories on ebay and failing to report tens of thousands of dollars in transactions that the IRS said was “income” and she said was essentially a perpetual garage sale of things she bought, tired of, and resold.

Beginning next year, a new law “requires the gross amount of payment card and third-party network transactions to be reported annually to participating merchants and the IRS,” according to an IRS summary. For their 2011 tax returns, “taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions” will receive a new IRS form, known as 1099-K, reporting the proceeds, said a spokesman for H&R Block, the nation’s largest tax preparation company.

I personally wonder how many people are making that many sales per year (about one per business day) and not running an actual business, but it’s another way to generate more paperwork and make it harder for solo entrepreneurs and small businesses to get business done.

One solution for all this paperwork this would be to enact the Fair Tax that abolishes the personal income tax and only charges the federal sales tax on new items, not used items. It’d be far easier to collect a sales tax and pay the proceeds monthly than generating more 1099′s.

They are pretty cool. In fact, they allow you to create – do it yourself, no fee auctions!

Here’s an example of how that was done for a local seller on a popular classified ad website.

Because it’s local, people can actually see the product before paying. It may not work so well for online transactions – it just depends.

You can learn more about it from Google themselves here…

A pretty slick concept!

Depending on the geographical location of the site where you put the ad, there are either a host of self appointed whiners – or competitors – standing ready to eliminate any ad they find that is not to their liking.

On the other hand there are some sites where the job boards are littered with scams and things that aren’t jobs and you could work full time just deleting that stuff. It’s obviously not “work”.

I’m not saying people still can’t get great results on the site. But it’s popularity will create a market for folks like the ones who created Alaska List to serve those who are hounded off Craigslist for real or imagined infractions – or unscrupulous competitors.

Maybe you’re one of those frustrated people and you need to start your own site?

I was recently checking out the service again as part of a periodic review and found that they are now requiring telephone verification before accepting advertising… AN EXCELLENT MOVE! It will increase the validity of the ads being placed – hopefully cut down on spam.

(I assume most of the spam was from non US sources and unless they have a US number, perhaps that will cut down on some of it!)

I’m glad they have added this process.

If you haven’t placed a Craigslist ad recently, you’ll notice the phone verification when you log in to your account and try to place an ad. Before going further, you’ll have the opportunity to verify your ad by receiving a voice mail or text message. After receiving the message, you’ll be able to type in the code you receive, click “verify” then proceed as usual.

Back in the real world of consequences for lending money to people who can’t prove they have a job that won’t land them in jail, Craigslist CEO: Our Real Estate Listings Are Booming Housing sales ads are up over 85% and rentals up 120%.

Amber Herbert, 28, of Medford, and her husband, Brandon Herbert, 29, were arrested and charged with conspiracy to commit burglary and conspiracy to commit a computer crime.

Police searched a computer that they owned and found evidence that linked them to the case, according to Sheriff Mike Winters with the Jackson County Sheriff’s Office.

He said the couple had stolen saddles and other items from a garage on the Jacksonville property a few days earlier and created the Craigslist posting on March 22 as an elaborate plan to cover up their crime.

Oregon man’s property ransacked after Craigslist hoax

The ads popped up Saturday afternoon, saying the owner of a Jacksonville home was forced to leave the area suddenly and his belongings, including a horse, were free for the taking, said Jackson County sheriff’s Detective Sgt. Colin Fagan.

General note to the world “Please take all my stuff – really!” is most likely not a legitimate ad when  the stuff has some actual value and is not the equivalent of what’s left over after a yard sale.

Living creatures that cannot be picked up for free at the humane society shelter should be included in the above indicator of a hoax… a horse definitely meets that criteria.

In all honesty, it isn’t Craigslist’s fault, of course, that crazies hang out there any more than it’s a bus station’s fault that they hang out there. It’s just that one had hoped that having an internet connection and the ability to read might be an indicator of a slightly more humane human status than this story indicates. They sound like the creatures Will Smith’s character battled in I AM LEGEND. Except these didn’t wait till dark to come out.

From Online Media Daily 

In a ruling that has implications for all companies that publish consumer-generated content, a federal appeals court found Craigslist not responsible for discriminatory ads that were placed by users of the online classifieds site, and stated that the federal Communications Decency Act doesn’t allow people to “sue the messenger just because the message reveals a third party’s plan to engage in unlawful discrimination.”

“An online service could hire a staff to vet the postings, but that would be expensive and may well be futile: If postings had to be reviewed before being put online, long delay could make the service much less useful, and if the vetting came only after the material was online the buyers and sellers might already have made their deals,” the court wrote.

Let’s start by taking a look at some of the reasons why the “systems” you read about in those expensive books do not work well for many of us. First, many of these guides or strategies are written by people who do not have direct experience with a REAL online business. Things are different in the actual Internet trenches, as you can probably already attest to. I am sick of reading claims that sound too good to be true, because it wastes my time and money. I am not knocking people who write good books, but no matter how well written a strategy is the only thing that counts online is (traffic & sales) per (cost & time of doing it). Second, most online marketing strategies are geared for the “big guys”, websites and online businesses with the deep pockets and specialized personnel needed to implement effective, large scale marketing and sales campaigns.

The reality is that most of us starting online products and websites have real strengths and passions that we follow, and that is what drives us forward. We also are often trying to bootstrap an operation on very limited funds, alone or with a small team, with a laser-like focus on getting the online product, e-book, website, or other “tangible” finished. If you are like me, you may have “finished” your website only to find that you are getting just a dribble of people finding it – this is very demoralizing. That kind of web traffic is not going to generate enough product sales or Google Adsense advertising revenue to even breakeven on your hosting service costs, let alone bring in the riches all the books seem to describe.

How is the small business team or independent webmaster/entrepreneur to get customers to the typical specialized website? I found that what I needed was a way to convert my sweat equity (writing about what I am passionate about) into a marketing strategy that reached real people interested in the lessons and materials I was providing on my websites. I found that the best vehicle was craigslist.org, which for years has been one of the fastest growing websites on the Internet, and which provides almost the ideal environment for viral marketing. I say almost because there are some “limitations” (these turn out to be critically important strengths) which have to be understood before you wade into this vast sea of potential website visitors/customers.

Craigslist.org is not a single, unified national or international website. It is intrinsically a local resource only. It is designed to do one thing and that is to provide each craigslist market city or town or region with a local classified ad system. In fact, if you spend any time reading about craigslist.org or about its creator Craig Newmark, you will see that it actually limits you to posting “local” ads only. You can’t go to tampa.craigsist.org for instance and find a way to post your information to all 289+ cities across the US or world with one click. I will advise you right now NOT to waste your time and money on the automated posting software that is available out there. It blatantly violates the craigslist.org terms-of-use, and will ultimately get your posts banned. People like you and I that use craigslist.org sites to buy things or find out information are in general extremely savvy about ignoring anything that looks spam-like, and they will quickly flag spam-like postings for deletion, ultimately wasting your time and effort. So the first thing you have to do is to understand these 289 “local” markets – where are they located, how many people use them, how do you reach the most people with the demographic “profile” you want to reach out to, with the least effort?

I happen to have over 15 years of experience using Geographic Information System (GIS) to analyze things like population changes, so I used that knowledge geolocate each website and to mine for data I could link to each of them. It turned out to be a tough project, but I ended up with a unique series of maps, reports, and data files profiling each of the 289 US craigslist.org market areas. I began using these materials to focus my own posting efforts to reach the most potential customers for my open source website, and it worked. Slow but sure is how I would characterize my campaign, always being respectful of other craigslist users and the system that runs it. I learned how to use the built-in craigslist.org account to manage my posts, and honed some simple techniques to make professional, but not over-the-top posts. I started sharing my materials with my friends, and then decided to offer this all as its own e-book. You can learn more about these on my website http://www.aMillionPlaces.com .

There is one important indirect benefit for using craigslist.org as a primary marketing tool – increasing traffic from Google searches. Now a lot of material is out there on Search Engine Optimization or SEO, and you should follow every recommendation you reasonably can to make your product pages and websites look enticing to all the search engines; however, that in itself can be an overwhelming project for the average webmaster. I do not know if my craigslist.org posts, which are essentially links back to my website, directly boost my page rankings, but I do see those posts appear as first page search page results in many cases. It is amazing how fast Google and the other engines pick up on new posts. I have experienced that using craigslist.org in this way has been more effective for me than paying for Google’s Adwords system. Using Google Analytics, I can see the traffic coming from my various posts. I can’t guarantee that you or anyone else will have the same experiences as I have, but the fact that my original websites are still generating visitors and revenue means that I am still out there, like you, fighting for my piece of the Internet’s exciting and enticing web traffic. My final advice is to never give up, but be very flexible and keep trying new techniques and ideas. Some of the best things in life are still free, including posting on craigslist.org. Good luck with your project.

Jamie Robe is the author of the e-book “Craigslist for Entrepreneurs”, available from his website http://www.aMillionPlaces.com. You can also visit his website http://www.InSmallSteps.com to find about his real passion as a computer engineer, website development using free, open source software.