Internet Marketing and the Law – What YOU need to know
To put this out front right now: I am not a lawyer and this is not legal advise! You are highly encouraged to seek your own legal and tax advise from qualified professionals. This is so you don’t try to sue me later if anything I say here could be wrong in your situation 
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For many people trying to make money on the Internet, you are probably ignorant of the laws pertaining to anything you do on the Internet. Taxes, copyrights, PLR, MRR, and the rest. If you are not sure on what these are – you need to find out and fast! Let us take them one at a time and no this is not going to be the ‘be all- end all” guide. You need to get your own information that properly relates to your situation in each of these cases. Ignorance of the laws is not an excuse and will get you into BIG trouble.
INCOME TAXES:
Everyone in all parts of the world are taxed in one way or another. I can only give you some information on what is required here in the United States. You will need to get familiar with what is called a 1099 form.
Companies based in the US are required by the IRS to give out a 1099 form to you at the end of the year that states what you have made for the year. You are required to give your social security number in order to the company (or EIN number) to receive a 1099. Now just because you have received a 1099 doesn’t necessarily mean you need to file the income on your tax forms. The rule currently is you have to make over $600 per year (this is total income from all your 1099s if you deal with multiple companies) to be required to file.
What this means to YOU:
This should be a ‘no brainer’ but unfortunately is not for the majority of people. The program or opportunity you signed up for and has paid you ANY commission is REQUIRED by the IRS to have your 1099 information on file. If you have not received a 1099 from an opportunity and made over $600 for the year – you can be arrested and fined for income tax evasion or worse. You are breaking the law even if you don’t know it.
If you are involved in a ‘cash gifting’ type thing – you better do some research on pyramid and ponzi schemes. Both of these are illegal and they will NOT want anyone to claim the income. Being involved with one of these will not only get you into IRS trouble but usually fall under the RICO laws also.
Go the the IRS website to find out about the whole deal. If you are involved or are planning to sign up for a program and they DO NOT have you enter anything but your Paypal or Alertpay info – you may be in trouble. There are ONLY 3 possibilities for this:
1. They have no expectations of you making over $600 in a year.
2. They are not going to file anything themselves and don’t want you too either.
3. They are ignorant of the laws.
In any of these cases, it spells trouble for you. This is why you need to do your due diligence of ANY online opportunity. YOU will have your butt in a sling and YOU are responsible. Look at Willy Neslon; his ‘people’ were supposed to take care of his taxes. That didn’t stop the IRS from taking everything he owned and he still owes them. Don’t let this happen to you!
You should also be filing and paying quarterly taxes if you are self employed (which you are) or you will have a nasty surprise at tax time. In the US, social security will take around 20 – 30% or your gross income and there is usually not a way to get around that. The actual income taxes will be ABOVE this amount. You will need to forget about getting a refund for anything unless you have overpaid your quarterly taxes. Please consult a good tax adviser for what is required for your situation.
My take on this:
When I look at joining an opportunity and they either have no provision to give them a social security number or do not even ask for 1099 information – I RUN!! This is not that I have concerns about giving my Social Security number out, that is where the due diligence comes in. If I get screwed it is MY OWN FAULT for not investigating the opportunity!
If they have no way to give or ask for this information is that no one in the group has EVER made over $600 a year, they are STUPID, or they are crooks. Do you really want to be involved with ANYONE who falls into the previous three categories? As an old friend of mine used to say, “DON’T BE STUPID!!”
OTHER TAXES:
In some communities (cities, counties, states) you are required to get a business license and pay local taxes on what you do from home – even if it is an Internet based business. These may be sales taxes, income taxes or just ‘fees’. This again will depend on where you live and the local laws.
What his means to YOU:
This is where the ‘plan’ comes into play. You need to do your research and consult a professional to make sure you are compliant with the laws of your area. Even if you you are not aware about a law or zoning restriction it won’t stop you from getting fined or worse. If it cost you a couple hundred dollars to see what EXACTLY you need; isn’t it worth it?
The IRS doesn’t play games! Whatever you are found to owe you MUST pay it ALL before the next tax year. I found this out the hard way one year. Local government can take your house and belongings in some cases. There are also fines and jail time associated with all of this. Find out NOW or regret it later!
My take on this:
I have known people who started a business in their homes. These were professional people who did things like accounting and tax preparation from their homes. In one case the home was not zoned for a business and they were severely fined and had to cease to do business from their home.
In other another case they did a mail order (eBay mostly) business which they mostly drop shipped items but did have some stock. They were slammed by the city and state for failure to file sales tax information to the tune of around $20,000. Don’t be caught with your pants down, make some phone calls; do some research.
INTERNATIONAL LAWS:
There are international laws that are also to be considered and in some countries what you are offering may be illegal for the people who live there to participate. Even having your website being seen in these countries can get YOU into trouble. There are some states that have laws against certain types of websites being seen by minors (not porn either) that can get you into hot water. This goes for products also. For people seeing TV commercials and the fine print says ‘not applicable to these states’ is why they are there.
There are also copyright laws to protect content owners. If you own a website you must make absolutely sure that you have the right to display everything on your site and if not to give credit to whoever owns the rights. This is why you see pictures with a “@copyright so and so” on them in small print. Everything that is on a website and has the “@copyright” somewhere on the site make it ALL copy written material. There is also the GPL license that is even more complicated as it has different levels on what can and can’t be used freely.
If you are using PLR or MRR (Private Resale Rights or Master Resale Rights) items – make sure you have read and understand what the license is and what you can do with the material. If you sell something, give something away, or change something that you have no rights to do; you can be in BIG trouble. Each item is different an you only have the rights specified in the license that you got with the material. Don’t think that you have had this item and the company is no longer in business that you can just give it away.
If you are using a picture, a ‘likeness’, or ‘name’ in your website make sure that you have paid the appropriate fees to be able to do so. This is the same for music, video, or anything else. You are only safe with your own ORIGINAL works in anything…if you can prove they ARE your original works and you have gone the the appropriate measures to secure your rights.
What this means to YOU:
DON’T USE anything that you are unsure that you CAN legally use. If it is a copy written work you can be fined and go to jail! If in doubt you need to do your research and make sure what you need to do to be in compliance. An example is if you see a small crappy site that has a picture of a famous person, movie, or something similar you usually have to pay a licensing fee to be able to LEGALLY display it on your site.
If you are not sure – FIND OUT!
Email the owner for permission or follow the legal guidelines for whatever type of material you are using. Again ignorance of the law is no excuse and won’t stop you from being destroyed in a lawsuit. Again you need to consult with legal counsel to keep your butt out of hot water. It can only take one person getting a lawyer to sue you out of existence for using something you have no rights to use. You need to know the DMCA also; so you don’t inadvertently do something to get you in trouble with it.
My take on this:
Copy written and licensed materials are the biggest things to worry about. I have had some of my articles (which my whole site and everything on it is copy written by the little statement at the bottom of the page) copied without my permission or been given the proper links back to me.
Though I do like to write, the articles on my site are mine and I do use them to generate traffic as every other person who is in Internet marketing does. The whole purpose of article directories is for people who need content to use these with ALL links intact. This brings traffic to the article owner. If you put even a portion of any copy written material in your articles you are toast for plagiarism.
Some are of the mindset that, “If they didn’t want it copied; they wouldn’t put it on the Internet”. This is the same as saying, “If you didn’t want your car stolen, you wouldn’t park it in the open”, or “If you didn’t want your house broken into you wouldn’t have nice things”. To me this is a criminal mindset any way you slice it.
It shows NO respect for other peoples property.
There are people and companies out there just waiting to sue the crap out of anyone who uses their stuff without permission; look at the news if you don’t believe me. Even if it is an original work of art made by you of a famous person – they may have copyright on the image and/or likeness and you can be in trouble.
If you play media on your site there are usually licensing fees associated with this also. Whether it be music, videos, pictures or most anything. Someone owns the right to it somewhere. If you get it from a ‘free’ site, hopefully they have done their homework and it is truly ‘free to use’. I have even heard of people using their own legal names for businesses and being sued by famous people with the same name – the famous persons name is not even their REAL name!
I personally know a gentleman that used an image that was part of a famous image for his business logo. It was a small town and his business was not even on the Internet. He used it for years and then was sued for using it without permission for the entire time he was in business. So don’t think, “I am small and no one will notice”.
I have also gotten “bonus’ material that is not the original work of who I got it from and stated in the material that is CANNOT be given away as a bonus. You need to READ the material as it is usually stated in the beginning what you can do with it if the separate license is missing. All it take is for the owner of that material to be on your list or sign up for your list and get their own material as a bonus – you can be toast.
Conclusion:
Hopefully this has enlightened you a little on some items you need to look at while running a business. I just glossed over these as they are much too complex to go into detail on any of them. The only real difference between and online business and an offline business is the overhead of the building it is housed. It will either be your home, office space, or a store. All the same rules and headaches apply to either.
Be prepared – Get a plan – Be safe!
Until next time!
