Tuesday, October 6, 2009

Adding to the Gov't. Coffers?

Yesterday, the FTC released its revised Guides, effective December 1, 2009, regarding reviews stating that when products or money are given to bloggers by merchants, the bloggers must reveal the "material connection" or face a fine up to $11,000 for each post in violation because such reviews are no longer consumer reviews, but endorsements.

Conceivably, the main groups that will be affected by this change will be those like the gamers, who review gaming software and hardware, mommy bloggers, who review goods and services for parents and children, and celebrities who tweet about what they use. The FTC holds that people like them are acting as advertisers who aren't truly independent from the merchants and that consumers need to be apprised of any material connections since bias may exist.

Now, truth-in-advertising and all that is fine, and I'm thinking that honest bloggers won't take issue with the change, which is the first in 29 years, since I read blogs that already have been thanking merchants for providing them the goods they've been reviewing.

What I anticipate may be surprising to some of them is that the IRS considers it as income and expects taxes to be paid just like for bartering, sweepstakes, gambling winnings, and the cars that Oprah gave away. The revised FTC Guides will make it easier for the IRS to go after any unreported income which, for some bloggers, may add up to tens of thousands of dollars' worth of goods and services received.

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