This is a common question among at-home eBay sellers. What kind of taxes do I have to pay, if any, on my eBay sales? Is it the federal government's business if I sell on eBay?
The general rule is that if an item originally belongs to you, and has been in your posession for a period of time, then no, you don't have to pay taxes on income from selling this item. If you have purchased items with the intention or plan to sell them on eBay, then yes, you do need to report the income from these sales. You could be subject to income tax, employment tax, excise tax, or may need to 
report ordinary business income.
Many sellers see their eBay selling as a fun hobby, that is none of the IRS's business. The IRS disagrees. If you call yourself an eBay seller, have a Paypal account that shows funds in and out, have an eBay account showing sales and seller payments, Paypal or USPS.com account for shipping - all of this activity is trackable and the IRS can easily figure out what you are up to. It is best just to report the income. Usually, your home business expenses will offset most of your profit and the taxes will only be a small amount.
Visit this page on IRS.gov that addresses online auctions for more information.
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