As a result of a Federal Court of Canada decision, eBay Canada has provided the Canada Revenue Agency (CRA) with the names of eBay sellers as well as their contact information and sales records

by HART (1-800-HART) on July 30, 2009 · 5 comments

in Government and Big Brother - Canada

Yes .. I thought that would get your attention .. (the title of this post) .. the audits begin at the end of the summer of 2009!

The following information is available on the CRA Web site.

“eBay sellers must declare all income for tax purposes,” states Minister Blackburn

News release

Ottawa, Ontario, July 30, 2009… The Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture and Agri-Food), advises Canadians that the income they earn online is taxable.

“Taxpayers should know that the tax laws that apply to traditional commerce apply in the same way to electronic commerce, like eBay selling,” said Minister Blackburn. “I strongly encourage eBay sellers, and for that matter, any taxpayer who has not already done so, to correct their tax affairs as soon as possible to avoid penalties or prosecution.”

As a result of a Federal Court of Canada decision, eBay Canada has provided the Canada Revenue Agency (CRA) with the names of eBay sellers as well as their contact information and sales records.

The CRA can therefore use this information to determine if the eBay sellers properly reported the income they earned from sales made on eBay. If the CRA determines that an individual or a business did not comply with the tax laws, the CRA will take any necessary action. In addition to paying any outstanding taxes plus interest, consequences may include penalties, as well as legal actions that could result in fines and other imposed sanctions.

“To avoid paying these fines and penalties, taxpayers who have failed to file income tax returns for past years or who have not reported all their income can voluntarily correct their tax situation,” stated Minister Blackburn.

In fact, under the Voluntary Disclosures Program (VDP), taxpayers who take the initiative to correct or disclose any information will not be penalized or prosecuted if they make a full disclosure before the CRA starts any audit or other compliance action.

The CRA expects that the audits, based on the information received from eBay, will begin at the end of the summer of 2009. The CRA will then begin contacting eBay sellers to ensure that they have filed all required returns and accurately represented the full scope of their business income. If necessary, it will conduct an in-depth audit to ensure that all taxpayers and businesses pay their taxes.

The CRA will continue to vigorously enforce the provisions of tax laws to ensure that all Canadians pay their taxes, thus ensuring a level playing field for taxpayers who comply with Canada’s tax laws. For more information on the VDP, visit the CRA Web site at www.cra.gc.ca/voluntarydisclosures.

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{ 5 comments… read them below or add one }

1 McLaughlin July 31, 2009 at 1:50 am

I was visiting the tax man with a friend and was told that France has started paying attention to online sellers, although I was not told how they got the names. It sounds like they may have done the same thing because Mr. TaxMan wants his cut too.

2 HART (1-800-HART) July 31, 2009 at 9:00 am

There was actually a report on the CBC Late news last night that implied that there were EBay sellers here in Canada that make over $100,000 and not report their income ..

Myself, I kind of find that hard to believe that ‘big’ ebay businesses would risk that. I can see the local hobbyists maybe pocketing up to $1000 per month to cover expenses or utilities or mortgage payments though .. but $8,333/month??

But – just in case it’s true – it would be worth AMENDING their income tax to report it now – at least for the last 3 or 6 years before an audit comes.

I’m not sure about ebay France – but, since early 2007 ebay in general has been working with governments so it is highly likely that is happening over there or, will happen soon as well.

3 Sadsac August 1, 2009 at 7:57 am

I have had a ebay account for almost 7 years. I do not think you could hardly accuse me of operating a business with ebay. I have only sold things, that I purchased with after tax dollars. Small ticket items like books, DVD’s audio books. In fact if truth be known, I think I’ve barely broke even when you factor in the ebay fees, paypal fees and the fact that many items I’ve listed didn’t sell but still cost me to list. I can’t wait to retire so I can move to Belise.

4 HART (1-800-HART) August 1, 2009 at 2:51 pm

Sadsac .. I think you are missing the crunch of this news .. Nothing has changed to convert non-businesses or hobbies to be converted to a business. Stuff as you say, are not considered a business. If, on the other hand you were going to stores, garage sales and selling the odd DVD’s and books for resale and claiming expenses against the revenues and in fact, operating a business .. you would not want to ignore ebay transactions just like you wouldn’t ignore other transactions.

One of the main points of this news release is .. “in the case you were doing it wrong or omitting it from your prior income tax returns” … you can amend previous years income tax returns to include this income at no penalties or interest or questions asked. If CRA decides to audit you, obtains the information and makes a decision that you were operating a business .. all of that could be costly for the taxpayer.

But, despite all that .. Belise would be a nice place to retire :) Be sure to send us a postcard :D

5 stupid person August 30, 2009 at 2:39 pm

good! time to level the playing field and make them pay.We all work hard and pay taxes.Why should someone who retails online not have to pay?

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