Wonder what this will do to the high users of E-Bay up here in the Great White North? Will the US be next? From: http://www.theglobeandmail.com/servlet/story/RTGAM.20070926.wrebay27/BNStory/Technology/home
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.“In particular, the CRA seeks to verify the reporting of income by certain Canadian taxpayers selling goods via the eBay marketplace.”A lawyer representing eBay Canada declined to comment on the order, which was finalized last week.The company argued in court that it did not have access to the records because eBay Canada is a subsidiary of eBay Inc. All of the information requested by the CRA is stored in computers outside Canada, eBay's lawyers said in court filings.The company also argued that the CRA had not shown enough evidence to prove that it “was conducting a genuine and serious inquiry.”Mr. Justice Roger Hughes of the Federal Court of Canada ruled that eBay is legally obliged to turn over the information even if it is located elsewhere.However, Judge Hughes reserved his decision on the issue of the validity of the CRA investigation. That will be dealt with in a future hearing.“Good for [the CRA],” said Andrea Alacchi, a Montreal entrepreneur who launched an online business in 2004, called Distribution Online, after starting out by selling items on eBay. “It's unfair competition for people like us who run businesses fairly. If the other guy is not declaring his income, it's unfair competition.”Canadians spend about $5-billion online each year and eBay is by far the largest electronic marketplace, accounting for about a quarter of the total sales. The site was visited by nearly 11 million Canadians in August, according to company figures.The CRA said in court filings that it is targeting people who qualified for eBay's PowerSeller program in 2004 and 2005.Only top eBay sellers can qualify for the program, which provides benefits to members. Those benefits include prioritized customer service, special promotions and sales tips.According to court filings, there are five PowerSeller levels ranging from Bronze, which involves $1,000 a month in sales, to Titanium, which is for people or companies that sell more than $150,000 a month.The company does not release the number of PowerSellers but, according to court files, it keeps detailed computer records on each member.The CRA defended its actions in court filings by arguing that it has the power to ensure tax laws are followed and it offered assurance the information will be kept confidential. “The Canadian income tax system is a self-assessing system. It's integrity is dependent on the Minister's broad power to verify compliance with the Act,” the agency said in a filing.A CRA spokeswoman declined to comment on the probe or whether it will be expanded to other websites.
Well, somebody's got to pay for all that "free" health care. I own several Canadian oil and natural gas trusts and Canada always gets their 5% tax off the top of any dividends because I'm a foreign investor. That's a good way to encourage foreign investment, eh?
Assuming the IRS decided to do the same thing, I'm sure a lot of US e-bay power sellers would be in trouble too. Even worse would be if they got the records of "power buyers". Most states, including Alabama, require you report and pay income tax on any out-of-state purchases. I know I always do but I suspect that the vast majority never pay any sales tax. Could be a much larger amount of revenue to the states than what the Feds would collect from sellers.
Personally, I'm glad they're doing it, because they are targeting the cash only type of commercial businesses that evade paying any income tax at all. They aren't targeting small sellers. I pay my tax, they can pay theirs!
David
DavidH wrote:Personally, I'm glad they're doing it, because they are targeting the cash only type of commercial businesses that evade paying any income tax at all. They aren't targeting small sellers. I pay my tax, they can pay theirs! David
I agree with it as well. I am a small business owner and I pay my GST, PST and any other taxes I need to, they should as well. Maybe if we all paid our fair share, then our tax bills would go down for all. Maybe
I just wonder how they will define "high volume seller" Here in the US, I don't think they mess with things under $10,000 unless your a business.(I think)
I'm surprised govenments havn't done away with cash money and money orders. Think about all the privately sold cash items that could be tracked and taxed if everyone had to use debit cards.
loathar wrote:I just wonder how they will define "high volume seller" Here in the US, I don't think they mess with things under $10,000 unless your a business.(I think)
Well, since we have about a 1/10 of the population, we should be looking at the $1,000 sellers
Pathfinder wrote:I agree with it as well. I am a small business owner and I pay my GST, PST and any other taxes I need to, they should as well. Maybe if we all paid our fair share, then our tax bills would go down for all. Maybe
I know you said maybe, but I doubt that taxes would ever go down. I think that if everyone paid their taxes in an honest way, the government (US, Canadian, etc.) will just find a way to get more out of us. Greedy bunch aren't they?
loathar wrote: ...I'm surprised govenments havn't done away with cash money and money orders. Think about all the privately sold cash items that could be tracked and taxed if everyone had to use debit cards.
...I'm surprised govenments havn't done away with cash money and money orders. Think about all the privately sold cash items that could be tracked and taxed if everyone had to use debit cards.
I think this is happening already. Those commercials they show of the perfect running deli (or whatever scenario) being ruined by the cash paying person in the visa commercials is trying to make people feel antiquated by using good old cash. The better they (IRS) can track your finances (electronically), the better they can rip you off.
TONY
"If we never take the time, how can we ever have the time." - Merovingian (Matrix Reloaded)
loathar wrote: I just wonder how they will define "high volume seller" Here in the US, I don't think they mess with things under $10,000 unless your a business.(I think)I'm surprised govenments havn't done away with cash money and money orders. Think about all the privately sold cash items that could be tracked and taxed if everyone had to use debit cards.
If I read the earlier definition correctly, the lowest level they're checking is $1,000/month, or $12K annually. That would certainly be enough to be of interest to the Federales and all those lesser governmental entities that collect sales tax.
Governments which are accountable to the people can't do anything the people would really object to. If any politician was foolish enough to suggest an all-electronic economy, anyone who has reason to want certain transactions to remain anonymous (even things as legal and insignificant as purchases from the local porn emporium) will rise up and smite them at the next election. Politicians are fully aware of this, and none of them are likely to commit political suicide.
Chuck (modeling Central Japan in September, 1964)
TA462 wrote:Well I get most of my Ebay items sent to me as a gift so I guess I'm just as bad.
Its not the buyers who are at fault, it is the people who sell as a business but do not report their income/taxes due.
And there are lots of power sellers of MR stuff, so it is very relevant to us modelers.
UP2CSX wrote:I think we are getting pretty far away from model railroading so I'll only add to this thread once more. No matter what any revenue agency does, there will always be an underground economy that operates with no records and only for cash. Think Columbian drug cartel for a very efficient example. The way to solve this problem is to eliminate all income taxes and substitute a national sales tax sufficient to make up the difference. Cash buyers will all pay their fair share of taxes because there's no way to escape sales tax. This would apply to all items purchased, including over the internet. The money saved in dismantling the huge government agencies and their assorted hangers on, like accountants and lawyers, will be tremendous. However, this is why it will never happen. The lobbying ability of those who want to maintain the status quo and spent their time filing lawsuits to chase down e-bay sellers far exceeds that of citizens who would like a fair and understandable tax system.
My gut feel is that there are just as many cheaters at sales tax (if not more) as there are at income tax. Either is easy to avoid using an underground cash economy. Very few buyers are going to object, especially as sales tax is now pushing the 7-8% range in most localities. Personally, I'd like to abolish sales tax (a nasty, regressive tax) and go strictly to a flat income tax. 10% of gross income, period, business or individual. No exemptions, no waivers. All the tax agencies would do is have to show that you had the income and didn't pay, and slap on a 50% penalty. I would think it would be a lot easier and cheaper to enforce, and would cause economic and business decisions to be based on other than tax consequences.
But we can't stop tinkering with the tax code to try to push decision making in the desired direction, or delivering favors to lobbyists.
"Render unto Ceasar what is Ceasar's..."
Fred W
fwright wrote: .... especially as sales tax is now pushing the 7-8% range in most localities.
.... especially as sales tax is now pushing the 7-8% range in most localities.
Here in Ontario, we're blessed with %14 !!! .... and we wonder why there is a large number of people attempting to circumvent the tax by going "underground" !!!
¡ uʍop ǝpısdn sı ǝɹnʇɐuƃıs ʎɯ 'dlǝɥ
So is the FREE health care worth it? All the Democrats here in the States are touting that the Canadians love it and the English are ga ga over it.
So, are we missing something here?
tatans wrote:UP2csx: Do I take it there is no tax in the U.S??? And you think I don't pay tax on my shares on the NYSE. think again, it's almost a nightmare with all the paper work that has to be sent back, and we sure do enjoy total health care, everyone enjoys it.
Thats what I want to know. Is the FREE health care a good deal? No waiting 3 years for sprained ankel? Inquiring minds want to know.
Driline wrote: tatans wrote:UP2csx: Do I take it there is no tax in the U.S??? And you think I don't pay tax on my shares on the NYSE. think again, it's almost a nightmare with all the paper work that has to be sent back, and we sure do enjoy total health care, everyone enjoys it.Thats what I want to know. Is the FREE health care a good deal? No waiting 3 years for sprained ankel? Inquiring minds want to know.