Ebay, Send to me EXACTLY what you send to CRA

[eurotin]

My sales were of 2 types. First, antique collectables, mainly toys and trains, owned by my company and second, commission sales of items like automotive sales brochures and train collections. All revenue and expenses flowed through my company and income was reported fully. However, I'm sure I sold enough that CRA will come calling. So ebay, I need to get prepared for this. It would be a huge advantage to know just what CRA is looking at so I can start assembling documentation on enough of these sales to put their minds at ease. There was nothing in the ebay agreement that anticipated this situation and I'm assuming that ebay can provide this info to all affected powersellers in a vastly more efficient manner that the individual sellers could. If ebay is handing out my account information I have a right to know exactly what information this is. Its worth noting that when my company purchased collectables, I was audited and challenged by CRA. Looks like selling them is going to draw the same sort of time-consuming, distractive and expensive attention.

[pierrelebel]

To get a copy of the information sent by eBay.ca to CRA, you need to make the request at:

powersellerinfo@ebay.ca.

It will be the same information you already have through your monthly eBay invoices for 2004 and 2005. .

[eurotin]

Thank you Pierre. (Are you monitoring this board full time?) I tried that email and got an "undeliverable" message. Any suggestions? Cheers, Bill.

[nibor2dooh]

You can also request full disclosure of CRA information on your account you are entitled to all the information or correspondence an auditor has access too. This is always wise to apply for once and audit is initiated it protects you from errors in the government files

[lina-mallows]

nibor2dooh- while asking for ALL information, which includes an auditor's working notes, is an entitlement; in practice getting these notes is not likely the case.

EXAMPLE- according to CRA the application of rules is uniform, yet when the SAME auditor returns TWO completely different results- ALL requests for the working notes to determine where the error arose from were refused!

So- while you can ask for EVERYTHING, and you should, don't expect it to be so easy, and straight forward.

[pierrelebel]

" got an "undeliverable" message. Any suggestions? "

Try again:

powersellerinfo@ebay.ca .

[nibor2dooh]

Hi lina yes I agree but once audit has been initiated you can do a formal access to information. I did not personally handle this but my lawyer at the time was a GST specialist he initiated the formal request in my files somewhere. The respondent is entitled to these records and audit was delayed final rulings were delayed until these records were recieved. This was during the Gst roll out when my companies had proportional GST requirements based on calendar implementation of a service fee that extended into the new tax.

[lina-mallows]

nibor2dooh- for the record- requests were made formally through an accountant.
AND THEY WERE DENIED!
Rights are only as good as enforcement- and yes, the final request for payment decision was escalated, and ultimately an appeal was won.
HOWEVER- the auditors notes that brought about the woefully incorrect assessment records WERE NEVER provided!

As well, internal communication between the auditor, and the supervisor who REFUSED to provide another auditor- WERE NEVER PROVIDED.

I worked on this audit, for a friend, and it took almost a FULL YEAR to get through all of it.

OFF THE RECORD- it was intimated that the JUNIOR AUDITOR had no clue what she was doing- however- as this ALL would be appealed anyway, it was better not to have another auditor involved.
So much for the right to have another auditor appointed when one is totally inexperienced in the field for which they have been sent to assess.

[jakeeangel]

Well, you don't already have them if your computer crashed & you lost them. 😞 Then on top of that, Rogers spam filter ate the copies they sent me so I still don't have them.

[pierrelebel]

"So much for the right to have another auditor appointed "

I frankly do not think taxpayer have such "right". .

[lina-mallows]

pierrelebel- in this case I absolutely positively agree with you!

FOR EXAMPLE- when an auditor comes to a conclusion that you owe AN ADDITIONAL $100,ooo having reveiwed the records, and applying the rules as applicable-
THEN- comes back a month later stating that having REVIEWED he EXACT same set of books- and presumably applying the SAME set of rules- you now owe AN ADDITIONAL $50,ooo-
ONE has to questions the glaring discrepancy of the two RESULTS!
This was not the case of an overlooked item or two, but a total lack of comprehension of the situation.

So- asking for another auditor makes sense. Asking for the notes of the Auditor makes sense. And all was done properly, in writing.
AND both requests were refused!

At the end of the day- after the lengthy appeals process, the amount ACTUALLY due was not AN ADDITIONAL $50,ooo, or $100,ooo, but ZERO!
The taxes declared, as filed, were correct, and the taxes PAID were correct-
ONE YEAR_ LOTS of aggravation, and a NET ZERO result!

WARNING TO EVERYONE- TRY NOT TO EVER TAKE CASH OUT OF AN ITEM AND THEN PAY A BILL (like a credit card) WITH IT. Even though there is a paper trail- CRA may look to the payment as UNDECLARED CASH INCOME!
This is most likely when the numbers do not match.
So- if you WITHDRAW $1500 fro your chequing account at CIBC, and have dinner spending $50, then deposit $1450, a half an hour later to cover your BMO MASTERCARD bill- you may have a problem.
Try to never pay a bill with cash- even with a paper trail. Write a cheque, do it online, but resist taking cash from an ATM, and paying that same bill!
(now- for fun- do this with several credit cards- over the course of a year- and VOILA!!!, the CRA thinks you have $200.ooo in UNDECLARED INCOME!!!!)

[whoscloset]

Good luck. I think ebay closed down their customer service departments.

[lina-mallows]

What ''Customer Service'' departments ?????

eBay actually had these things ???

And until now........ WOW !


From any of the responses I have received - 'Customer Service'' was the farthest thing from their minds!

[duujogl]

"At the end of the day- after the lengthy appeals process, the amount ACTUALLY due was not AN ADDITIONAL $50,ooo, or $100,ooo, but ZERO!
The taxes declared, as filed, were correct, and the taxes PAID were correct-"

Around 20 years ago we had our third or fourth income tax audit and a very similar thing happened to us. One big difference was that our auditor had a life-threatening illness in his family and was given compassionate time off. In the meantime, our records were held somewhere in his control and not accessible to us. When he finally got back to work about three months later, with a token apology for holding our books for all that time, he came at us with several thousand dollar deficit owing on our taxes paid. We managed to get his figures (by the way, he had used a no-tape hand-held calculator(?) for the whole thing). DH - trained as an accountant, went over the whole thing WITH a tape and showed him where he'd made his several errors and proved we didn't owe anything. He stated that he thought we should apologize to him because he'd wasted so much time for nothing!! After all that LOL doesn't seem to cut it - we need an icon for hysterical!!!!

[recped]

our records were held somewhere in his control and not accessible to us.

They can have all the COPIES of records they would like....for originals I want court approved requests.

Of course they can look, hold, smell, feel the originals just not take them away.

[nibor2dooh]

The formal request is an access to information it costs about or did then 60.00 The auditor cannot withhold the information of course they can claim they do not have it but their audit generally has to be based on facts in their report you are entitled to this information. An accountant requesting and a lawyer demanding through access to information request are two completely different avenues. My experience was many of the government auditors were woefully ignorant of the rights of the corporation or individual they were auditing. Further intimidation tactics were the normal mode of operation, my audit lasted 6 months then the auditor was removed from the case for inapropriate behavior by their supervisor I ended up owing nothing. Following a PST audit on a different account for our bar they found we owed 5500.00 tax due, through detailed scrutiny turned out the amount owed was for PST on the retail value of liquor given away at 5 years of Staff Christmas parties at our bar. Had to pay that but thousands of dollars were found owing on wine turned out we had upgraded oz size of glass but not changed price so we had collected right taxes but looked like used more wine over years than we were charging for, did not have to pay that bill but only found out due to access to their calculations.

[nibor2dooh]

OH by the way had to pay tax on staff liquor because I followed the rules and purchased all our BEVERAGES for the party through proper licensee channels! Had I gone to LCBO and picked it up there would have been no tax owed bit SCROOGEY to me

[dipmicro]

He stated that he thought we should apologize to him because he'd wasted so much time for nothing!!

He did waste time leaving with no money 😉

Seems he was more concerned with squezing some extra taxes instead of getting his math right.

We never had an audit. Started in mid 2006, all sales and expenses are neatly organized in the spreadsheet with separate columns for GST and PST, all one has to do is to select a column, or look at summary spreadsheet, which calculates all numbers needed for tax return. We have all the paperwork for expenses, sales and our invoices to customers. Some paper, some electronic.

But I do not maintain the acount balance sheets. That means we freely funds across acounts. The only trail is the statements that one bank and credit cards sends to us. My personal account bank does not send any paper statement and I never downloaded the transaction for bac kup.

But after reading Lina's posts ... should I start balancing the accounts (PayPal, CIBC business account, my personal account, credit cards, etc) ? I am sole proprietor, does it matter ?

[lina-mallows]

dipmicro- just from experience- if you are going to 'move cash around'- having the paper trails could help a whole lot.
Not many eBay sellers experience 'cash sales'- though there is some provision somewhere requiring that you keep a 'cash journal'. Much like the one used to record milage usage.

The BIG problem CRA had was money that appeared to come from nowhere. The 'assumption' on the part of the auditor that these 'payments' came from UNDECLARED income, subject to taxation, and the remitting of GST, was he problem.
It appears for easier for an auditor to 'assume' that every dollar' is UNDECLARED income- take the FULL measure, and have you the taxpayer prove otherwise.
Even thought there was a clear paper trail- the 'PERSONAL' account WITHDRAWAL was not recognized, at the time the 'BUSINESS' payment was made.

When you are the sole proprietor of a business; it doesn't matter how many different 'pockets' your pants have. Don't be surprised when CRA starts poking around in ALL of them.

[craftycatsattic]

"To get a copy of the information sent by eBay.ca to CRA, you need to make the request at:

powersellerinfo@ebay.ca.

It will be the same information you already have through your monthly eBay invoices for 2004 and 2005."

Pierre. It's my understanding that eBay will only be providing information for the time period that powerseller status was held.