Possible Tax Problem

[ginzokid]

I received this yesterday: "In November 2006, the Canada Revenue Agency (CRA) applied for and received a Federal Court Order requiring eBay Canada to release account information and sales data of Canadian PowerSellers for the 2004 and 2005 years. Our records show that you are among this group. In February 2008, the Federal Court of Canada affirmed its ruling in favour of the CRA. Subsequently, eBay launched an appeal of the decision which is scheduled to be heard on October 8, 2008 before the Federal Court of Appeal. Please know that eBay takes user privacy very seriously and is contesting this Order. If, however, eBay loses this appeal, it will be required to release the requested user information to the Canada Revenue Agency. As yet, no information has been released to the Canada Revenue Agency. We will advise affected members by email if we are forced to release their information. However, because we know this matter will be of concern to our members, we felt it was important to provide you with this advance update. Additional information and the answers to some commonly-asked questions are posted at www.ebay.ca/powersellerinfo. If you have additional questions about this situation, you may email powersellerinfo@ebay.ca. We remind sellers that they are responsible for ensuring that they are in compliance with all laws and regulations relating to their activities online. Please note that a change in PowerSeller status at this time will not alter our information disclosure requirements, if we lose this appeal. Protecting our users' privacy is of the utmost importance to eBay, and we continue to vigorously defend your rights through this appeal. As more information becomes available, we will keep you updated." Now this might mean that I would have to pay income tax on the money I received from the sale of all my used N scale equipment. I don't have any proof of the original cost and of course most of the stuff was sold at a loss. Then I would have to figure in the cost of operating a business out of my home; postage, electricity, employee salaries, etc. In other words, this is just plain nuts! I hope none of you have to face this BS. Canada Revenue is just getting more greedy! X-(

[dl85vette]

I would go and change my account info to some bogus address. Lets see Canada Revenue go after someone that doesn't exist. What's next, go after the people that sell stuff at flea markets week after week. hat is no different than what ebay is. Should be going after just those with an ebay store. O Canada, our home and native land. We are taxed to death and put up with all sorts of BS. Waiting to win the lottery so we can relocate to New Mexico. ]:)

[ginzokid]

Maybe an address in the middle of Conception Bay would do it. We just voted today, early, and it is funny to see the old mark an X on the paper ballot. Yes we still count the ballots by hand and tally them up on the blackboard.Something the US should go back to soon. It's more honest and would keep the talking heads from predicting the outcome before the people who don't live on the east coast could vote. What a stupid system! Revenue Canada will have a fight on it's hands to get any money out of me. I'm disabled, remember. I'll just go on the dole. B-)

[ginzokid]

It's official.....I'm screwed! Ebay lostthe appeal and now it is required to send the Power Seller info to CRA. I wonder how fast they will get around to wanting back taxes from me and how I'm going to prove I didn't make a profit. Do they tax garage sales? Hmmmmmmmmmm...... B-)

[dl85vette]

You should be ok pete. If they just passed it, then it isn't right to be going after someone for something years before when it was legal. Plus beings you didn't file anything at tax time then how can they have an accurate record?

[ginzokid]

Here's what I received this morning. "Thank you for your request. The Canada Revenue Agency (CRA) has requested information concerning your Powerseller account for the years 2004 and 2005. Attached are your invoices for your Powerseller account during this time period. Please keep in mind that we have not provided the CRA these invoices. Pursuant to the Court Order, we have provided the CRA the sales information (high bids) for items that you have sold that have gone through the check out process." So the CRA has the info they need to show a source of income that I never reported at tax time. I will have to print out the invoices from ebay which do show high bids on sold items and then go back to my inventory to see what I originally paid for the item. There's a lot of stuff I sold. This could be a nightmare! B-)

[barrysfp45]

so do you know if it is total sales amount or profit margin, depends, maybe you sold all at a loss then there is no income to speak off. ]:)

[ginzokid]

It's a sales tax and unreported income thing with CRA. You are even supposed to collect sales tax on yard sale items. Believe it or not they (CRA) have people checking out yard sales and flea markets just for this kind of thing. So with what appear to be thousands of dollars in sales @ 15% sales tax and the income generated also, I'm screwed! If I can show a loss, maybe I'll get away with no income figure, but the sales tax will have to be paid. Trouble is some of the information eBay sent me is incomplete and I don't know what the item was that sold, just the dollar amount. I have asked for more help from them. Meanwhile, I have a lot of figuring and hunting to do. B-)

[dl85vette]

get a receipt book and make out some receipts in our name showing you paid 50 bucks more for a loco than what you sold it for,etc...

[dl85vette]

Maybe if we didn't get taxed to death in Canada, then maybe some people would have gotten honest jobs instead of earning extra money selling yard sale and old children clothing on ebay. Meanwhie some exec that makes $200K has more frikken loopholes for his investments and income. Beauty of lotto 649 in canada...don't get taxed on the initial winnings.

[ginzokid]

Dave, I need receipts for about $10,000 worth of stuff. Feel like writing? I just hope my inventory list is sufficient. After all, am I supposed to keep receipts from 1972? A lot of the stuff is that old. Kim and I willbe spending today comparing the purchase price to the sale price for income tax purposes. As far as the sales tax is concerned, I am screwed. That amounts to almost $1,500.00 in sales tax. And next year CRA will start taxing my Social Security from the US. Death and taxes.....sure things in life. B-)

[dl85vette]

This is BS. How can they pass something to be in effect and then go after people for something they did 2 years ago when it was legal?? I'd be tempted to spend a grand on a lawyer and challenge it then to pay double that in taxes. Like you said, who keeps receipts? If you have your car up for sale in the driveway, you don't pay income tax on that. so what's the diff if it's a model train. I know what they are getting at for present/future sellers but trying to retroactively tax someone when it was legal? Sounds like a lawyer.

[ginzokid]

The good news is that there is no way I made a profit on the stuff. I sold most of it for less than retail cost, so no income tax will be due. What they are after is the sales tax I didn't pay. And Dave, you are supposed to pay sales tax on your used car in the driveway when you sell it. This is not a retroactive law at all. It has been on the books since God (The CRA) invented the sales tax and income tax laws. I spent about 10 hours yesterday compiling the sales vs cost figures for just one month. It's like trying to create the books I should have kept on a business in the first place, after the fact. It's time cosuming and hard with a lot of the data missing. I'm using both my inventory records, which I admit were not always all inclusive, and the Walthers catalog to get retail pricing from 2004 and 2005. Good thing I keep the old Walthers. I have also had to refer to the Micro-Trains Shortline monthly news letter that I have subscribed to since the year one it seems. This is a lot of research. Bottom line, I'm still going to have to pay sales tax on the money I received for the items sold. Result, I'm now going to charge and collect sales tax on everything I sell through eBay. You know that once they, the CRA, lock on to you that they will be watching even more. And don't think that Paypal is at fault either. Money orders are not the answer either. It's eBay's records of sales that tell the story no matter how you are paid. So my sad tale ends for today. Back to the heap of paper today and maybe I'll be able to get more done this time now that I have a system to the price searching. My advice to everyone is to stay under the radar. Don't sell too much at one time and become a power seller.

[dl85vette]

I guess what did it was people that became power sellers from the volume that they sold. I've heard of people's wives go to used clothing place that some of the clothing is brand new that (guess was picked up at govt auction)was confiscated at border,etc. anyhoo some of it would be ralph lauren golf shirts, etc and the wife would sell it on ebay and make profit. So some of them made their spending money that way...or even income...

[taz-of-boyds]

Pete, Sounds like you should be able to offer your skills and knowledge to others from Canada caught by the (da-daa-du-daun) CRA for selling train stuff. You will be helping recreate their missing records. I guess you will have to collect sales tax on your services though. Do you get to deduce the losses in the sales from your income so you get some taxes back? Charles