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… why are these businesses not paying taxes? Is it a lot of small-volume hobbyist merchants who might not legally have to pay taxes? Is it people who should be

• throwaway5678i 4y ago
  It's a mix of both, but the "hobbyist" portion is a quite bit larger. From what we gathered from our data and speaking to some customers directly, we have the belief that their profit margins are thin enough to the point where they will either pay nothing or nearly nothing in taxes anyway... but the idea of simply being on record is terrifying to them. Both groups generally have issues with taxes, they usually take payments using Venmo, Paypal Friends and Family, or even direct bank transfer just to get around the reporting. They pretty much use and abuse any form of electronic payment that they can get away with without presenting themselves as a business. As for monetization, we keep track of the "non-monetized" transactions and it's in the low 7 figures. It's not a crazy amount of money, but it's nothing to sneeze at either.