Taxman goes browsing on eBay

[Azure]

http://www.theglobeandmail.com/servl...Story/Business

Canadians who sell a lot of stuff on eBay best beware - the taxman is watching.


The Canada Revenue Agency has won a Federal Court order requiring eBay Canada Ltd. to turn over the names, addresses, phone numbers and e-mail addresses of all high-volume sellers on the popular website. The CRA wants to find out whether those individuals or companies are reporting the income they made from online sales in 2004 and 2005.


"The CRA is seeking to verify compliance with the obligations and duties under the Income Tax Act of certain Canadian taxpayers selling goods in an online marketplace," said an affidavit filed in court by Aziz Fazal, a Toronto tax officer who heads an audit group within the CRA that is leading the probe.

[Locke]

I figured that this was only a matter of time. Just wait until you sell something to an auditor!

[Rifleman]

I avoid Ebay.ca most of the time, just because the selection isn't as large as Ebay.com.

I wonder if the government will also monitor Ebay.com.

[Dan02]

and i seem to avoid ebay.com because everyone once in awhile you get stuck with a pretty big customs bill you weren't expecting. bought something for 50 bucks once, was 20 for shipping, then it got here and it was another 35$ for some customs BS, some discount i got off buying on ebay there. Most of the other times though i haven't got billed though, but its annoying when you do.

[Locke]

Originally Posted by Rifleman

I avoid Ebay.ca most of the time, just because the selection isn't as large as Ebay.com.

I wonder if the government will also monitor Ebay.com.

Anything being shipped from Canada to the States I bet they'd monitor.

[alltherage]

I don't understand how they can do this. Ofter times product sells for cheaper on Ebay. How is that a profit and how do they know where and how much profit is being made?

[MoneyGuy]

I have a cousin who is a CRA auditor. You'd be amazed at the ways they have to find people. Just amazed.

Customs enforcers. Hint: Be careful who you're having a beer with.

[Tron_fdc]

Originally Posted by alltherage

I don't understand how they can do this. Ofter times product sells for cheaper on Ebay. How is that a profit and how do they know where and how much profit is being made?

There's all kinds of ways they can catch you. Check bank records, ask for receipts of purchase...if you can't come up with them they asess a value and tax you based on that.

I've been audited before for taxes and GST, and it sucks. We get full audits from a firm downtown every year, and they still found all kinds of stuff deemed "inadmissable" as expenses.

[Locke]

Originally Posted by MoneyGuy

I have a cousin who is a CRA auditor. You'd be amazed at the ways they have to find people. Just amazed.

Customs enforcers. Hint: Be careful who you're having a beer with.

###!

They have their ways. I'm not even going into the CRA Jihad on servers claiming tips over the last few years and their (perfectly legal) recourse should the proper amount not be claimed. Its unreal!

They have their ways.....

[ken0042]

Originally Posted by Rifleman

I avoid Ebay.ca most of the time, just because the selection isn't as large as Ebay.com.

I wonder if the government will also monitor Ebay.com.

The thing is- they are all run off the same servers. All ebay.ca does is allow you to filter by country. But then if all you are doing is buying, then you have nothing to worry about.

A few years ago I was selling a lot on eBay. I also claimed everything on my taxes too. The gov't makes it real easy to claim almost all of it, and pay next to nothing in taxes. They aren't looking for the guy who makes $75 a month selling on eBay- they are looking at the people who are not employed elsewhere, and make a regualr salary selling on eBay. If I owned a B&M store I'd have to pay taxes; why not an online store?

[Mccree]

Originally Posted by alltherage

I don't understand how they can do this. Ofter times product sells for cheaper on Ebay. How is that a profit and how do they know where and how much profit is being made?

If there is profit is should be taxed.

I once had a tax prof tell us that that if people just play follow the rules then everyone tax rate would drop 5-10 %. Not sure if that is true or not.

[Mccree]

Originally Posted by Locke

###!

They have their ways. I'm not even going into the CRA Jihad on servers claiming tips over the last few years and their (perfectly legal) recourse should the proper amount not be claimed. Its unreal!

They have their ways.....

I had a friend go thru that. nasty stuff. They when back and tracked the TIPS on Credit cards and debit and figured out the percent they earned on tips and the applied that to ALL their sales included cash. Up to the server to prove them wrong.

[Bobblehead]

The article says they are going after people in the "Powerseller program" which is at least $1000 in sales per month. If you are doing that much business then you are probably a business and should be declaring profits.


They aren't interested in people selling their old junk every once in a while.

[Dan02]

Originally Posted by Mccree

If there is profit is should be taxed.

I once had a tax prof tell us that that if people just play follow the rules then everyone tax rate would drop 5-10 %. Not sure if that is true or not.

http://www.cnn.com/2007/LIVING/perso...ref=newssearch

This article on CNN is about the states, but they "randomly" audited 46,000 returns in 2001 and found a shortfall in taxes by 345 Billion . I am really hoping someone made a typo because thats a average of 7.5 million per audit they did! Certainly makes it seem reasonable that taxes could be lowered significantly if everyone was actually paying their share

[blankall]

Originally Posted by Mccree

If there is profit is should be taxed.

I once had a tax prof tell us that that if people just play follow the rules then everyone tax rate would drop 5-10 %. Not sure if that is true or not.

Well technically you get taxed on income and not profit, but that distinction is for tax geeks....

[jolinar of malkshor]

Originally Posted by blankall

Well technically you get taxed on income and not profit, but that distinction is for tax geeks....

Does that work for a business aswell? Am I just confusing income with revenue?

[stang]

Originally Posted by Dan02

and i seem to avoid ebay.com because everyone once in awhile you get stuck with a pretty big customs bill you weren't expecting. bought something for 50 bucks once, was 20 for shipping, then it got here and it was another 35$ for some customs BS, some discount i got off buying on ebay there. Most of the other times though i haven't got billed though, but its annoying when you do.

Watch your shipping company, UPS is the worst (that I personally deal with) THe brockerage fees are ridiculous!!!

I will never buy anything that is shipped UPS.

[Mccree]

Originally Posted by jolinar of malkshor

Does that work for a business aswell? Am I just confusing income with revenue?

Busniess get taxed on NET INCOME or NET Profit.

[Maritime Q-Scout]

Originally Posted by stang

Watch your shipping company, UPS is the worst (that I personally deal with) THe brockerage fees are ridiculous!!!

I will never buy anything that is shipped UPS.

I just bought something that's USPS, at least that's what they put as domestic, I never checked international. I'm not framiliar with all the American companies, I'm assuming that's different?

[mykalberta]

I have a question, do you have to report income on items you have sold which are used?

Vis a vi garage sale, ebay etc.

MYK