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February 7, 2006

Written by Bob Meyer, Editor of BarterNews

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From the desk of Bob Meyer...

Last week I talked with one of the top exchange owners in the country. He told me he spent almost four hours going over the various sections of the BarterNews.com web site, reading articles and so on.

And conversely, another well-respected person in the industry candidly admitted to me that she had never visited the web site. Two examples, obviously, at extreme ends of the spectrum, but indicative of the world we live in today where so much is happening.

We hope everyone, everywhere will check in on a regular basis as we report on the news and happenings in the world of barter. As you can see by the story on the bartering of automobile fuel, below, exciting events are occurring in the world of barter!

Also, received this note via e-mail...

“I’ve been running into situations over my 25 years in the barter business that could have been easily avoided by having been forewarned about the people or organizations reneging on debt repayment, not fulfilling deals, etc.

“I’m not sure there is an organized element in either NATE or IRTA to share information regarding deadbeat accounts, vendors or even other exchanges (barter companies). And I do not expect your publication to be the clearinghouse for such information.

“To your knowledge, has anyone else expressed a similar interest in establishing some kind of roundtable (on line?) forum to discuss these types of problems?

“Would appreciate your comments.”

Kind regards,
Steve Singer, Sr. VP
National Commerce Exchange
Jericho, NY 11753

 

Dear Steve:

I’ve had people within the industry suggest that BarterNews maintain such “a master list.” Others have suggested that IRTA and NATE do so. I don’t see any of these entities moving forward with such a service. Nor do I envision any online roundtable exchange taking place, because of our highly litigious society. What will continue, however, will be the sharing of information among peers...one of the many benefits of belonging to a national association.

Most exchanges and big traders will have their “Don’t work with these traders!” list, so it really involves taking the time and making the effort to create your own master list.

Whether you’re a trade exchange operator or an independent trader, if you haven’t done business with someone it’s prudent to check them out and ask for several referrals...then call the referrals! If the referrals are not entities you either know or trust, then seriously consider walking away.

Other options might include dealing with them by demanding upfront performance, or opening up an escrow account wherein the exchange takes place upon completion by both entities.

From my perspective, there are two reasons why unscrupulous business-people (whether using cash or barter) exist: Greed—which is a common human characteristic, and slothfulness—being too lazy to pick up the phone and make some calls to check them out.

 

Trade Exchange Owners...
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BizXchange Lauded By Bay Area Barterers

Chris Haddawy, one of BizXchange’s owners and manager of the company’s Bay Area office, and Account Manager De De Wentz have received acknowledgment in the local press about several outstanding businesswomen who are members of their trade exchange.

The following excerpts are from Bay Area BusinessWoman magazine:

Shari Woolridge joined BizXchange shortly after she opened her stylish East Bay shoe shop, Steppin’ Out. One of her first expenditures on trade was a large ad in the glossy Oakland Magazine, which Woolridge said “paid off immediately.”

RSVP Postcards owner Melinda Manley exclaimed the BizXchange service is the best she’s experienced. “I’ll send them a list of items or services I’m looking for (on trade), and within 24 hours they’re back to me telling me which ones they can provide. I always know where I stand with these guys!”

Irene Ralston, owner of SelectFreshCusine.com, relishes the exchange’s services because it provides her with another network...one that promotes her business outside of the local region.

BizXchange, headquartered in Seattle, recently was No. 16 on the Puget Sound Business Journal’s list of Washington State’s 100 Fastest-Growing Private Companies. For more information: www.bizx.bz.


IRTA 2006 International Conference Slated For Florida

Krista Vardabash, executive director of the International Reciprocal Trade Association, has announced that the organization’s 2006 International Conference will be held at the Island Grand Resort in St. Petersburg Beach (FL) from September 14 through 17. Vardabash noted that the Island Grand is a spectacular property and easily accessible globally.

Additionally, she reported that IRTA will be maintaining a focus on core values through standard setting and unity...using the same theme from last year, “Uniting People and Standards In a Cashless Trading World.”

Vardabash explained the program IRTA built around this theme in 2005 received high marks, and created tremendous excitement for the future of credit-clearing through various means. For more information: www.irta.com

Get New Money-Making Ideas And Valuable Contacts!

You can obtain useful, informative ideas and contacts in every available back-issue of BarterNews.


Ron Whitney’s Unstinting Efforts On Behalf Of U.S. Commercial Barter Industry

Kudos to IRTA board member and lawyer Ron Whitney, president and founder of Barter Network (www.bniusa.com) in Chadds Ford  (PA), who has taken considerable personal time to write a position paper on Form B Notices for tax withholding.

His position asserts that trade exchanges (barter companies) should be excluded from having to send Publication 1281 B-Notice back-up withholding letters to barter clients as a matter of fact and law.

Recently he traveled to Washington, DC, on behalf of IRTA. There he attended a special IRS reception for the agency’s partnerships, which included IRTA. While at the reception Whitney was able to meet and talk with IRS Commissioner Mark Everson, Small Business Commissioner Kevin Brown, Chief “E” Officer Phyllis Grimes, and key members of IRSAC (IRS Advisory Council).

Whitney’s unstinting efforts, as well as his attendance at this special reception, established good relationships for IRTA’s continual work on behalf of the commercial barter industry. Below is a copy of Ron Whitney’s actual “position memo.”

Date:   January 25, 2006

Re:      Applicability of Back-Up Withholding Requirements of Publication 1281 To the Organized Barter Exchange Industry

PROBLEM:

Publication 1281 – “Back-Up Withholding for Missing & Incorrect Name/TINS”, requires organized barter exchanges to back-up withhold on accounts with non-matching TINS/SSNs.  Such requirement is impossible to comply with since barter exchanges do not maintain or control ANY cash accounts of their clients from which back-up withholding could take place. As third party record keepers, barter exchanges maintain trade accounts, (not cash), for their members.                    

NEGATIVE RESULT: 

The aforementioned internal IRS systemic problem causes undue hardship to the barter industry in the form of unjustified fines, penalties, and appeals.

BACKGROUND:

Pursuant to the TEFRA of 1982, barter exchanges file annual information returns with the IRS verifying the total amount of barter sales for each of  their member clients.  The members also receive a 1099B form to be included with their tax returns.  Incorrect SSNs/ TINs on file with the barter  companies may arise from clients’ misrepresentations or disappearances. Publication 1586 – “Reasonable Cause Regulations & Requirements for Missing & Incorrect Name/TINS” was the controlling standard for decades on the issue of non-matching SSNs & TINs.  It required barter exchanges to show “the failure was due to reasonable cause and not willful neglect.”  The 12-2004 Revision of Pub. 1586 now requires barter exchanges to send “B-Notices” to non-matching clients threatening to back-up withhold pursuant to the dictates of  Pub. 1281, and abatements are granted or denied based on an exchange’s compliance with “B Notice” solicitation rules. Theresa Spillett, IRS Tax Specialist, Holtsville, NY office recognized the impossibility of barter companies complying with Publication 1281 in her 3/15/05 penalty abatement letter, (attached), to Barter Network Inc.: “You also established the fact you are unable to by law comply with back-up withholding as these payees’ accounts are not cash accounts.  They are paper accounts, as they barter their individual services for other services.”

SOLUTION: 

The back-up withholding requirements placed on barter exchanges as codified in  Publication 1281 must be removed, since compliance by barter exchanges is impossible as a matter of fact and law.


Trade Exchange Industry First...Automobile Fuel On Barter!

BarterNews has learned that members of the EBanc Trade Network (www.ebanctrade.com) can use their trade dollars to buy automobile fuel in Australia on a 50%-50% basis!

EBanc is working with FUELbanc (www.fuelbanc.com) to provide this service to their members. The FUELbanc gas card works at all fuel outlets across Australia, including major chains and independent retailers.

eValues Expands Online Technology Services

Gary Lasater, CEO of TeleTrade International and eValues, has provided online technology processing services to the barter industry for decades. Lasater’s eValues is now expanding its services, offering local community based service centers the opportunity to set up a private branded Community Finance Service Center (CFSC).

According to Lasater, this private branded CFSC allows local service centers to use their own logo and business names within each web site, thus enhancing the financial health of their local community. For complete details on establishing a Community Finance Service Center go to www.evalues.net, or call Gary Lasater (303) 840-7172, ext. 1.

 

The Growth and Use of Secondary Capital (New Money) Creates Unprecedented Wealth In Today’s New Age Of Possibility

There are many forms of secondary capital—which can be defined as any financial instrument that measures and communicates value in a common language. Would you like to see and learn more about the many forms of secondary capital?

 We have 70 free, informative and inspiring, articles for you in our “Secondary Capital Section.” Check it out... www.barternews.com/secondary_capital.htm.


Unusual Barter Agreement Struck Between Russia & Bulgaria

Under a 1998 barter arrangement, Bulgaria receives gas from Russia’s state-owned Gazprom in return for allowing transit through its territory to a number of other countries including Turkey, Greece, and Macedonia.

The barter agreement has been extended 10 years. Bulgaria will be provided gas at a fixed price, which after the latest hikes in fuel is among the lowest in Europe.

Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.


New Suburbanism Growing In Southern California

The suburbs, long derided as cultural wastelands, are experiencing a renaissance. No longer just sprawling residential tracts fanning out from nominal downtowns, the reinvented suburbs are pedestrian-friendly villages featuring vintage architecture mixed with new designs, mom-and-pop stores next to national chains, plus jobs a lot closer to home. They also have museums, theaters, art galleries, concert halls and restaurants.

Unlike the idealized suburb of your parents’ generation, the lots are small and close together, and some feature so-called rear-loading garages behind the homes, entered via attractive, landscaped lanes rather than alleys lined with garbage cans.

Many of the homes lack traditional yards, so families enjoy the 20 acres of parks scattered through the development, most of which serve as central green zones and are surrounded by residences that face them.

The parks are open to the public, but are maintained by homeowners’ fees. The large residential streets have landscaped round-abouts to slow auto traffic. Narrow side streets accommodate wider sidewalks for pedestrian safety.

One of the most striking features of “new suburbanism” is the dramatic shift from cars to walking. Especially in the refurbished downtown areas, residents are parking their automobiles in city lots off main streets so they can stroll along gussied-up avenues chock-full of restaurants, shops and clubs. They can people-watch in central plazas and run errands on their lunch hours.

As suburbs have shifted from industry-based hubs to more eclectic businesses—new media, biomedical and technological, for example—they are attracting a new mix of people who desire a variety of amenities. The mix of ages, ethnicities, and immigrants has brought new culture and restaurants, as well as capital, in some cases from the old country. They bring multiple generations, too, which is what any healthy community wants to have.

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Here & There...

  • The accounting firm of Grant Thornton revealed that 65% of bankers surveyed nationwide are pessimistic or neutral about the nation’s economy for 2006. (Last year 31% were dour or neutral.) Concerns are threefold: The impact of last year’s hurricanes which bid up building materials, Fed Chairman Greenspan’s January 31 retirement, and an end to the housing boom.
     

  • Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up!
     

  • China’s economy, having grown 9.9% in 2005 (GDP now $2.26 trillion) is the world’s fourth largest economy, following the U.S., Japan, and Germany in Gross Domestic Product.
     

  • The government disclosed it costs them 83-cents to produce, mail, and process a paper check. That’s about 75-cents more than it costs to deposit the funds electronically, according to the Treasury Department.
     

  • Intel has more than $4 billion invested in nearly 1,000 companies in some 27 countries, making the computer-chip giant’s venture capital program one of the most expansive in the corporate world. (Last year Intel invested $265 million in start-ups; 67% of those were based outside the U.S., up from 37% the year before.)

We welcome your comments, questions, and observations.
© Copyright BarterNews 2006. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.

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