Comment by Phillips126 | Hacker News Reader

Comment by Phillips126 | Hacker News Reader

Parent Full thread

I wonder if she suffers from hoarding as well as she seems to be a bit in denial with her expenses. The article states:

> Almost every day, Jessica’s boyfriend of eight years begrudgingly hauls Amazon packages in from the porch. “He hates it,” she told BuzzFeed News. But Jessica proudly points to all the items she's acquired for their new house: “I got our new showerhead, shower organizer, side tables, coat rack, coat hangers. … We would have had to pay for all that stuff.”

Then it later states:

> The spreadsheet helps Jessica make sure she’s on top of due dates and getting paid on time. BuzzFeed News reviewed the document, which showed 117 open orders that hadn’t been refunded yet. A column titled “Total currently out of pocket” — or what she’s still owed — amounted to $2,282.01.

So she isn't _REALLY_ getting everything for free. According to her own records she is down $2,282.01 and it's quite possible she wont see that money. If this continues, that number will either grow into serious debt or "Jessica" will move on to something else.

Sounds like an addiction.

She's currently owed $2,282, meaning accounts receivable in accounting terms. This doesn't tell us anything about her overall profit.

That said, you're right in that there's definitely a discrepancy in the value of what she's getting, and the real dollar cost of what she has to pay for them. If she pays $100 for a shower head she didn't need and gets stiffed on the refund, she's out (almost) $100 even if she gets to keep the product.

She should be charging a fixed fee for the review itself. She has a whole bunch of things she clearly doesn't need and isn't even paid for her labour...

> isn't even paid for her labour...

The IRS considers payment in kind (goods in exchange for services) to be taxable income. [0] So, I’d say she’s getting paid.

[0] https://www.irs.gov/taxtopics/tc420

Unless I'm misunderstanding it's more straightforward. The article says she is reimbursed, so the steps are (based on my Aus understanding, US tax law may vary):

1) Buy product - taxable expense for business/work purposes 2) Write review 3) Get sent money equal to purchase price - taxable income

Net, the money cancels out to no taxable income but she has the product. It was bought with her own money and still belongs to her.

It's like if I run a blog, I bought a new PC to do my blogging (business expense), wrote about how nice it was, then the company sent me some money or a gift as thanks. I wouldn't have to pay tax on the PC if this happened.

In the U.S. a court would probably ignore the formality of the transactions you describe and simply look at the outcome. The outcome is that the reviewer has ended up with the property at no out-of-pocket cost, and would thus be considered income.

See also Gregory v. Helvering (U.S. 1935) for the quintessential example of this principle. https://en.wikipedia.org/wiki/Gregory_v._Helvering

You're probably right. We often have the legal idea of "arm's length" meaning a transaction that is coincidental or purposeful will be treated differently.

I find this interesting in your link:

"if a transaction has no substantial business purpose other than the avoidance or reduction of Federal tax, the tax law will not regard the transaction"

I don't see how that doesn't apply to all the shuffling we see from big corps these days, licensing things they own to companies they own just to shift profits. Though that's another tangent.

I'd not try that in Aus without some serious financial advice, or you'll end up with even more serious tax debt.

Can you give me some more details? I thought I had a pretty good idea of how it works but I'd be happy to look into it more.

I think I've misunderstood the structure of your sentence! My mistake =)

Sure, it's a net benefit for tax purposes, and she "gets things". But what I'm saying is that it's not a real fungible, useful income.

of 99% crap they probably don't need

Not to mention the boxes. My Wife tends to purchase a fair amount from Amazon especially around the holiday time. The amount of cardboard that I have to cut down and fit into my recycling bins can be frustrating leading to a large pile of cardboard in the garage that is slowly whittled down over time. At her scale I imagine she must be dealing with a tremendous amount of cardboard - maybe she should see if she can find a 3rd party seller of cardboard balers!

She can just return those items to Amazon for her money back... as well as the ones she's been refunded for (as per the article, she's refunded via PayPal)

While true, I wonder if this would flag her account as suspicious activity and shut the scam down.

I imagine high volume returns to Amazon paired with the deletion of reviews (or seeing all her reviews on 3rd party sellers goods have only 5 stars), one may start to unravel what is occurring.

Wonder if it would just be worth it to "eat" those costs.

Reply on news.ycombinator.com