If you are a ebay powerseller and not claiming your ebay income you may be in for a really rough tax season. The Canada Revenue Agency has won a Federal Court order requiring eBay Canada Ltd to turn over its names address’s phone numbers and email address’s of its ebay power sellers and high volume sellers. The CRA wants to find out whether those individuals or companies are reporting the income they made from online sales on their taxes. In a September 18, 2007 the ruling from Justice Roger Hughes of the Federal Court of Canada affirmed that the Canada Revenue Agency (CRA) has the right to examine records on Canadians who generate monthly sales of more than US$1,000 through the online marketplace on eBay US or eBay Canada, also known as “PowerSellers”.
If your just selling some of your old junk online then you should have nothing to worry about. But if your more or less a business and doing over 1,000 dollars in sales a month and not claiming it you might be getting a call from the CRA. The key issue in this case was whether Section 231.2 of the Income Tax Act permits an order requiring a Canadian resident to provide information to which it has access in Canada, but that is stored in data facilities owned by another party outside of Canada.
So Canadians who sell a lot of stuff on eBay best beware the taxman is watching. It should be noted that this case is continuing and the issue of whether the CRA has provided sufficient evidence to demonstrate it is carrying out a “genuine and serious” inquiry is still to be addressed.
This case may require businesses to provide customer information to CRA in certain instances, it could have important implications for businesses and their customers. Information concerning clients in canada that can be accessed and used by an online commercial enterprise in Canada appears to be fair game regardless of where the information is stored or who asserts ownership over it.