Amazon bans reviews based on free or discounted products

[meeera]

Originally Posted by Fbone

The market value of the book would mostly likely be it's full retail (non-zero) price. The author has to determine what the market value is for a non-professional book review. That could potentially add up if you give out several ARCs.

Most ARCs these days, I believe, are time-limited eARCs. I don't see how they could be worth anything like the retail price. They're much more akin to borrowing than to any sort of gift or payment. As a low-volume hobby reviewer, the only paper ARCs/books I've ever received have been unsolicited. I call those gifts.

[HarryT]

Originally Posted by DiapDealer

Thanks for investigating. I knew about gifting, but I also know that rarely affects the giftee (the gifter is usually responsible for any taxes owed). I'd forgotten about barter, however. Like you, though, I'm not certain that applies here, either.

It's not a gift, though. If you receive a copy of a book in return for undertaking to write a review, that's "payment in kind", and at least under British law is taxable income.

[DiapDealer]

Originally Posted by HarryT

It's not a gift, though. If you receive a copy of a book in return for undertaking to write a review, that's "payment in kind", and at least under British law is taxable income.

I understand it's not a gift. We were just looking for areas in the US tax code that might cover "free book in exchange for a review." I'm still not satisfied it IS declarable income in the US (though the barter form might be a possibility). I'm waiting to hear from someone who declares free ebooks given in exchange for a review as income. There has to be someone doing it if it's legally required (in the US).

[HarryT]

This seems pretty clear-cut:

https://www.irs.gov/uac/four-things-...ut-bartering-1

A book in exchange for a review is clearly a barter transaction.

[DiapDealer]

Nothing about US tax law is "clear-cut."

[HarryT]

The IRS say:

If you conduct any direct barter – barter for another’s products or services – you must report the fair market value of the products or services you received on your tax return.

Where's the ambiguity in that? The "fair market value" of the product you received is surely the retail price of the book, isn't it?

Similarly the author must also declare the market value of your review.

[DiapDealer]

Originally Posted by HarryT

Where's the ambiguity in that?

There is no ambiguity in the statement itself. But until I hear that author's/publishers are valuating amateur reviews as barter income (and that amateur reviewers are doing the same for books received), then I reserve the right to believe that "free book in exchange for honest review" just might not be considered barter (for the purposes of taxes) in the US.

[HarryT]

I honestly can't see how an undertaking to write a review in exchange for a book can't be considered a barter. But that's probably why I'm not a tax lawyer .

[ApK]

Originally Posted by HarryT

I honestly can't see how an undertaking to write a review in exchange for a book can't be considered a barter. But that's probably why I'm not a tax lawyer .

The questions might come in, off the top of my head, in one of two places:

1. Was the book REALLY given as payment for a service? Or was it a gift, or some other type of low-value promotional item, maybe with the unofficial hopes of getting a review? Even if the reviewer says they got the book "in exchange for the review" that may not be how the publisher, or the IRS sees it.

2. Is there 300 pages of obscure exceptions, exemptions, exclusions and etc. buried in the tax code somewhere that effectively trickles down to the typical tax preparer as "you don't need to declare that."

Unfortunately (or fortunately depending on your point of view) , when the amount is so small as to be really questionable, it's also too small to be worth anyone researching an authoritative answer.
People will either declare it, because it probably amounts to less than the price of a cup of coffee in taxes, or the don't declare it because they figure it's unlikely to flag an audit since it involves less than the price of a cup of coffee....

[HarryT]

Originally Posted by ApK

Was the book REALLY given as payment for a service? Or was it a gift, or some other type of low-value promotional item, maybe with the unofficial hopes of getting a review? Even if the reviewer says they got the book "in exchange for the review" that may not be how the publisher, or the IRS sees it.

To my (admittedly over-literal) mind, if someone states "I received a free copy of this book in exchange for this review", that is an explicit statement that it was a barter arrangement, and thus taxable. As opposed to "the author gave me this book as a gift and I liked it so much that I spontaneously decided to write this review", which would not be barter.

[ApK]

People make explicit statements that are wrong all the time.

Think of all the "copyright disclaimers" people post, explicitly stating how their blatant copyright infringement is not copyright infringement.

Or the statements in spam email explicitly stating that the email is not spam.

(though I suspect those are more willful lies, than someone simply not knowing the intricacies of the tax system, or what their misunderstanding of their eARC offer might imply.)

Anyway, this is just musings, apropos of nothing, so I won't fill more space. I have reason to think any of this is so, just that's a possibility.

[HarryT]

Originally Posted by ApK

People make explicit statements that are wrong all the time.

Whether the statement is right or wrong, though, if the reviewer themselves considers it to be barter (i.e. that the review was provided in exchange for the book, rather than the book being a gift), the IRS requires them to declare it on their tax return on the basis of that belief.

[ApK]

Originally Posted by HarryT

Whether the statement is right or wrong, though, if the reviewer themselves considers it to be barter (i.e. that the review was provided in exchange for the book, rather than the book being a gift), the IRS requires them to declare it on their tax return on the basis of that belief.

I don't think so. That's why people sometimes get professional help with their taxes...so someone can tell them they are wrong, and do it the right way instead.

I cannot imagine considering a person at fault if:

1. The arrangement was not a taxable barter deal
2. The person didn't know that it would be taxable if it was barter
3. The person misstated the arrangement in a review in a way that made it sound like barter
4 The person didn't include it on their taxes.

[DiapDealer]

There has to be some kind of subjective wiggle-room when it comes to declaring barter income. It only makes sense. To believe otherwise suggests that the IRS wants to know about every meal offered as payment for some quick handyman work--some homegrown tomatoes in exchange for cleaning your elderly neighbor's gutters. Ever give a guy some beer in exchange for him and his chainsaw helping you to clear a fallen tree?

There are tons of barters the IRS doesn't want to deal with (or know about). How am I to know this is not one of those?

[HarryT]

I would imagine that every one of us has paid a handyman in cash, knowing full well that it'll never be declared to the tax man, but I was under the impression that we were having a hypothetical discussion about whether "review in exchange for a book" arrangements were theoretically subject to taxation rather than whether anyone actually did declare them. If you're asking the second question, I strongly suspect the answer to be "no".