Posts by George Price10

urbanwalker72 said:Regarding that deal with the Italians, were you meant to be providing services to them or receiving services from them?

If that was the case, you really should have requested to cancel your sales tax ID once the deal collapsed.

Only then would the ID be removed, preventing others from applying the reverse charge mechanism and ensuring you wouldn't be hit with sales tax obligations until you actually cross that $75,000 threshold $0.00.

As it stands, they likely checked the database, saw you had an active ID, and were legally obligated to shift the liability onto you.

I am not entirely sure what your options are now, other than perhaps reporting the liability on a tax form and paying it. If you don't, the IRS will probably reach out to you in six months or a year to settle up. Or maybe they won't; it all depends on how far those data exchange lists go. Knowing how these agencies operate, it might actually be in your best interest to just wait and see if they even notice.

I was the one providing the service to them. I had no idea I wasn't supposed to have a tax ID. The whole system for small business owners in the US is incredibly confusing. It's almost as if we aren't part of the same unified system.
I'll just wait for them to call.🙂 Thanks!

urbanwalker72 said:It is mandatory. I find myself wondering how such a coincidence occurred—why would you possess an EIN if there is no functional need for it? Furthermore, one must consider whether this equipment is intended strictly for professional use or for personal enjoyment.

I was supposed to be working with some Italians, but the deal fell through. During that time, I was checking with the IRS because I needed a way to get paid, since there was no other option. Eventually, the job was postponed and then canceled entirely, leaving me with an active tax ID. I assumed everyone had to have one, but after reading the discussions here, I realized the system messed up—I have a legitimate tax ID despite not being registered for sales tax. It’s confusing because I thought if I owed anything, the IRS would just handle the calculations when they sent my tax assessment, given how everything is integrated within the US system. The items I bought were intended as business equipment.

I am operating as a sole proprietor. By chance, I was assigned a tax ID by the IRS. I recently purchased some music gear online for up to $16667 and used my tax ID when registering for the online store. My shipment arrived with a tax-exempt invoice. Since the total is under $77,000, am I exempt from reporting this, or is it mandatory regardless?