Don’t Mess With the IRS- Web Hosts May Be Inadvertently Hosting Illegal Sites

April 11, 2005
April 11, 2005 - (HOSTSEARCH.COM) - Web hosting providers may want to take a lesson from notorious crime boss, Al Capone. In the roaring 20’s gangster Al Capone was untouchable. The FBI, the police, the CIA couldn’t lay a finger on this underworld crime Cappo. That’s when they called in the IRS and Al got sent up to the big house. To avoid a similar fate web hosting providers should check and make sure they are not in violation of tax laws when hosting sites that provide cigarettes.

The ATF has recently requested credit card companies to no longer accept payment for tobacco products bought online. Visa, MasterCard, American Express and eBay's PayPal service have stopped accepting payment from online cigarette dealers last month after being told by a coalition of U.S. states and representatives of the U.S. Bureau of Alcohol, Tobacco and Firearms that virtually all such sales were illegal.

Largely, this has caused Internet cigarette merchants to shut down as they have effectively lost the means to do business.

Now, most merchants are reduced to accepting electronic or paper checks, and fewer customers may be willing to wait for those checks to clear before their orders are shipped. Meanwhile, some online merchants say they have been wrongfully singled out by authorities.

Still, beyond the illegality of selling cigarettes to underage purchasers New York state has begun a crackdown on sites trying to avoid paying taxes on cigarettes by purchasing them online. Web hosts would be well advised to boning up on particular state’s laws before continuing to sell cigarettes online or brush off those dusty off-shoring plans and call up that Indian friend of yours.

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