No, the government expects you to tell them what your profit is. But yes, the records keeping is a must. But that's not all that complex, you just need to keep a record of everything you sell, what you paid for it, the postage you pay, and the fees you are charged. Do it regularly, and it isn't that hard. A spreadsheet is recommended.
Apart from what you report to them, the big thing for active sellers is the 1099K that PayPal generates which reports your total receipts for the year to the IRS. This only happens if you take in more than $20K AND more than 200 sales. It must be both, and is based on the total amount of money processed by PayPal, with is higher than the total sales amount because it includes shipping that the buyer pays.
International shipping can be problematical. The eBay Global Shipping Program works quite well, and helps you avoid many of the potential hassles dealing with international sales. The big advantages are that you ship the item to the processing center in the US, and once delivered there, you have no liability for non-delivery. Also, they use shipping methods that always (?) have delivery confirmation, which USPS doesn't for many countries (unless you use Express mail, which is very expensive).
Another GSP advantage is that the customs fees and taxes are collected by the processor in the US, and that means that the shipment (apparently) bypasses in in-country customs office, which is often the source of trouble (stuff damaged, stolen, or delayed).
If the package is never delivered, the buyer is refunded, and you, the seller, gets to keep the money.
I made under $20k with PayPal, combo of retail product sales and eBay sales. Upon request, PayPal emailed me a zip file of a complete spreadsheet for tax purposes. Worked well. I did have to call them when I couldn’t print out the entire year from their summary.
In over 20 years of eBay, I have experienced one very late seller (who was truculent,but not abusive; 0 scams and ONE *buyer* who ignored my “no overseas sales” and bid high on a low value item then refused all communication after buying. He was based in the Netherlands. He was mocking, but not abusive. I did not ship to him. Instead, I generated an invoice with the accurate shipping and VAT fees. eBay allowed the *successful bid* to sit on my account for 90 days (IIRC), then cancelled it, per a dispute I filed. I received 1 abusive/threatening email due to my use of wool in my product. I ignored it.
eBay sales are most successful using Buy It Now or Best Offer and free shipping. You can ignore stupid Best Offers and you can counter offer. Bidders can submit up to 4 (again, IIRC) offers. 1# from the center of the US to either coast, using furthest, most Northern points is about $7-$8 using USPS. Price it in. I will sometimes do a combo of adding 1/2 the estimated shipping to the price and listing a shipping cost = to 1/2 the actual cost. Other times, I calculate the cost, add it to the price and offer free shipping.
Look at the sold listings in your niche to see if items will sell with a fair shipping price or not. Examples I found recently indicate heavy items will sell w/a $1/lb cost, which is consistent w/UPS Store shipping. eBay will give a slight shipping discount when you ship USPS. Using the PayPal or eBay site to generate a pre-paid shipping label allows you to ship USPS from door-to-door w/o visiting the PO. The shipping can be paid out of your PayPal account, so you have a record. If your charged fee is higher than the actual cost because you want to recoup handling costs,just do not check the box that asks if you want actual postage to appear on the shipping label. You can specify the date to be shipped within 3 days.
I have never had any package/contents damaged in shipment via USPS, UPS or FedX. I have had one customer who maintained her package was not delivered. It was marked delivered. She stated this was common in her neighborhood. I replaced her item, but requested a personal check beforehand for the postage and requested she have it delivered to the PO where she could pick it up. That worked.
USPS,UPS and FedX ALL have tracking sites. UPS/FedX will note the signature on anything delivered to a loading dock. USPS will always list the scan when they deliver to a residential address. UPS and FedX will email you when a package is delivered if they have your email address.
I had one wholesale shipment that ended up at an out-of-date address the buyer had closed years prior. It was my error. I neglected to fill out the address on the shipping form from the UPS Store, the employee was young and new and they just used the first address in the UPS database. UPS & FedX never clear their databases. I had to deal with several UPS *customer service* employees, file an address change and then request the shipping department of my account purge their address listings. Shipment was delayed a week and I paid for the extra mileage, but it was my error. Most commercial accounts will not pay for extra insurance. I received detailed tracking info as the package was rerouted.
You can refuse International Sales. I do. I have an upcharge on my business site of $12-$20 for overseas shipping. Just request buyer use a US domestic address. I have had Japanese and Chinese buyers who do that as a matter of course. I had one *customer* who sent me emails and called complaining of my standard flat fee shipping charge. She wanted 1 very small/cheap item. I had 1 eBay *customer* who did the same via email only. I explained my costs to them and let it drop. They didn’t purchase and I didn’t miss them. I had one *customer* demanding to visit my workshop to choose her item. My policy is no public allowed and I will honor color requests. She emailed and called repeatedly, all for a $12 item because she was special and needed to see everything. I refused. She didn’t buy and eventually stopped hassling me.
You WILL pay 15% to sell using eBay & PayPal. You will pay a fee, use gas, pack/unpack a van, drive both ways and sit all day at a flea market with no guarantee of sales. It’s a business decision.