Thank you in advance for responding to this question. Here it is:
I am an online business that provides an advertising service, and my sole way of receiving profits is by allowing the 'Seller' to post products online for a monthly fee. Essentially, I connect online 'Buyers' (who pay nothing to browse and buy products) and 'Sellers' who are trying to push their businesses.
I am an LLC
and provide a unique Escrow Buyer Protection platform. This means I receive payments one-by-one from the 'Buyers' first and the corresponding 'Sellers' do not receive these payments until it is confirmed that the Buyer has received the product. This confirms that there are no fraudulent charges or scams on my online store. Thus, buying on my website is 100% safe.
I want to ensure that the IRS
does not charge me high taxes
thinking that my holding of these high funds is my profits. Because, remember: I am taking $15 of funds that belong to the 'Seller' and then release those funds to the 'Seller' after the 'Buyer' has confirmed receipt of these goods. I do not want the IRS to think that this is my profit. It is not. My only profit is the monthly fee I charge these 'Sellers' for posting their products online (advertising fee).
What agreement do I need to make with my cooperating business, or in other words, what IRS forms
or tax forms do they need to sign in order to do business with me so that I do not run into any problems?
A Proud Nebraska Business in the Heartland