Some years back, when I did taxes seasonally, a guy came in. He was in a panic. The IRS told him he owed on 100,000 of income! BTW - He was an E-4 in the military. I passed him on to a lady who did tax returns but who also had a masters in accounting. The IRS based it on the total sales reported on eBay.
The young airman had terrible records but over 10 hours of work made it possible to document the COSTS as well. His “income” from sales on eBay went down to $4,000.
I did enough sole proprietor type returns for industrious young people to have pointed out, many times, that these hard working people were actually LOSING money in their business. Some adjusted their business model while others quit.
A lot of wives neglected to think about their supplemental earnings compared to the child care costs AND that, since their earnings were in addition to their husband, the earning were taxes at the top marginal rate - often 20%. Many then realized they were working for less than $2/hour total gain.
But yes, there are a ton of people who sell ten thousand dollars of goods on eBay and have expenses that mean their additional income is 1-2,000. But they also won’t report ANY income until someone tells on them.
And the problem that the folks who are cleaning out their closets and selling used items on ebay have is, they acquired the stuff more than 7 years ago, and thus wouldn’t have receipts to show what they paid for it; they’d only have an aggregate value of what they sold the things for.
What do those folks do to show they didn’t make any profit and thus won’t owe any tax on the sales?