Respectfully addressing some of the statements made:
1) Whether or not Vine activities are self-employment income remains to be seen. I'd argue that for those who actively engage in reselling the products they receive, it absolutely is. This is what the IRS says about it: "To help simplify things, the IRS has established factors taxpayers must consider when determining whether their activity is a business or hobby.
These factors are whether:
- The taxpayer carries out activity in a businesslike manner and maintains complete and accurate books and records.
- The taxpayer puts time and effort into the activity to show they intend to make it profitable.
- The taxpayer depends on income from the activity for their livelihood.
- The taxpayer has personal motives for carrying out the activity such as general enjoyment or relaxation.
- The taxpayer has enough income from other sources to fund the activity
- Losses are due to circumstances beyond the taxpayer's control or are normal for the startup phase of their type of business.
- There is a change to methods of operation to improve profitability.
- Taxpayer and their advisor have the knowledge needed to carry out the activity as a successful business.
- The taxpayer was successful in making a profit in similar activities in the past.
- Activity makes a profit in some years and how much profit it makes.
- The taxpayer can expect to make a future profit from the appreciation of the assets used in the activity.
All factors, facts, and circumstances with respect to the activity must be considered. No one factor is more important than another. If a taxpayer receives income from an activity that is carried on with no intention of making a profit, they must report the income they receive on Schedule 1, Form 1040, line 8.
2) People are also expected and encouraged by Amazon to write reviews for items they buy outright. I'm not self-employed simply because I choose to write a review. Influencers on social media who receive free products? That's a business. They actively produce content, cultivate followers, likes, and views, engage in comments, etc... It's a brand. We often get grouped with them, but we're not the same.
3) The majority of the goods have no resale value. Going back to #1, if I begin to keep track of broken items received and ARV vs. inflated cost, then am I running a business and proving that point to the IRS, or am I just keeping track for tax purposes? Huge gray area.
4) You talk about audits and penalties and interest happening to Viners who classify their activities wrong. I haven't heard of that occurring and looked for but found no tax court cases. People are already scared and confused, so that comment really doesn't help. The most important thing is that people report, with the best of intentions, whatever they receive.
TLDR, Per the IRS: "...the bottom line is that a business operates to make a profit." Profit relates to income and financial gain, and financial gain relates to earnings, selling, and purchasing. It all concerns money. The majority of Viners are not running a business. Law is my area of expertise. Everything hinges on definitions. This is about income tax, earnings, and profit. All of those relate to money received. There is no money received by the average Viner who isn't reselling.
