Getting audited by the Canada Revenue Agency largely due to GAS

vortexxxx

Supporting Member
Messages
10,026
The Canada Revenue Agency recently won a court case that forced PayPal to show them my transactions among many others. They want to do all 7 years and are digging deep. They dont believe I'm buying and often selling gear because it doesn't suit me, I need to pay for something else etc. They assume I'm buying and selling them for a profit. I doubt I can find paperwork on all my stuff including what I bought or traded elsewhere. They are making me feel like a criminal even though I lost money on almost everything gear wise that I had to sell. With the kind of digging being done, I'm worried they'll assume something that I can't prove and I'll be paying more money than I have. After speaking to that agent and being pressured, I ended up feeling bad for almost a week. He even suggested I get a lawyer which would likely cost more than I could afford in itself.
 

GiorgioV

Member
Messages
1,592
This sucks. I think that proof that you consistenly paid more than what you sold the gear for should be enough, but I really can't give you any solid advice becuse I live in a completely different jurisdiction than yours so whatever is relevant for me does not apply.

I can only give you best wishes.
 

Jayyj

Supporting Member
Messages
6,954
I'm really sorry you're going through that.

Do you personally keep any accurate records of what you've bought and sold? If not, it might be worth putting something together: make a spreadsheet of everything you can remember, then start looking for receipts, PayPal confirmations etc to substantiate each one. Paypal might be able to help, screenshots of listings in the instances they're still live, even just days of when you paid money into your bank account or, if you kept cash in hand for future purchases, try to link them up and show that you didn't spend money out of Paypal/bank funds that time.

It may well be that their investigation will simply bare out the reality and it won't go any further, but at least doing something proactive will help protect you from stress and anxiety getting the better of you and at least if things do go against you you'll have a starting point with which to unpick any case they bring against you.

Are their any recourses for free legal advice in Canada - Citizens Advice, lawyers that might give a free first consultation etc?
 

AlanH

Member
Messages
1,788
Your posting history on this site could be decent proof that this is a serious hobby maybe. I dunno. I accept no liability in weird legal matters.
If you've posted new gear day messages and pictures this will back what you may have bought, non PayPal.

This does highlight a problem with eBay and other auction sites that use PayPal for someone like me who often buys new or locally used with cash. When I sell stuff buyers quite often immediately pay by PayPal to finalise the deal.

I can see why some sellers say "no PayPal - all such payments will be immediately refunded and the transaction cancelled"
 

don carney

Silver Supporting Member
Messages
1,298
You ought to go see a lawyer in your area. Many lawyers will meet initially for free or for not much. A one hour meeting will provide you with some suggestions, some idea of how the game is played, and some confidence in resisting the revenue agent.
 

TonePilot

Supporting Member
Messages
3,782
The Canada Revenue Agency recently won a court case that forced PayPal to show them my transactions among many others. They want to do all 7 years and are digging deep. They dont believe I'm buying and often selling gear because it doesn't suit me, I need to pay for something else etc. They assume I'm buying and selling them for a profit. I doubt I can find paperwork on all my stuff including what I bought or traded elsewhere. They are making me feel like a criminal even though I lost money on almost everything gear wise that I had to sell. With the kind of digging being done, I'm worried they'll assume something that I can't prove and I'll be paying more money than I have. After speaking to that agent and being pressured, I ended up feeling bad for almost a week. He even suggested I get a lawyer which would likely cost more than I could afford in itself.
They've given up on the corporations who have the money and lawyers to fight back. They now appear to be focusing on the little guys who have very little in the way of resources. They denied my GST claims for a little business I have running on the side (non-music related) and clawed back $2500.00. I've given up and shut down the business.
 
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Bluzeboy

Gold Supporting Member
Messages
7,856
The Canada Revenue Agency recently won a court case that forced PayPal to show them my transactions among many others.
This begs the question of how many “others”?
I have no advice other than lawyer up. At least temporarily.
 

Jabby92

Member
Messages
3,392
Last I heard this was only for business accounts on PayPal and the course case was years ago.
 

sitedrifter

Gold Supporting Member
Messages
2,560
I do not know the OP so please bear with me. I would like to know what caused the Canadian Government to come after the OP? Pretty scary they are tracking private sales in Canada and went to the extreme of suing Paypal for the OPs records. Crazy and sad at the same time.
 

Jabby92

Member
Messages
3,392
The Canada Revenue Agency recently won a court case that forced PayPal to show them my transactions among many others. They want to do all 7 years and are digging deep. They dont believe I'm buying and often selling gear because it doesn't suit me, I need to pay for something else etc. They assume I'm buying and selling them for a profit. I doubt I can find paperwork on all my stuff including what I bought or traded elsewhere. They are making me feel like a criminal even though I lost money on almost everything gear wise that I had to sell. With the kind of digging being done, I'm worried they'll assume something that I can't prove and I'll be paying more money than I have. After speaking to that agent and being pressured, I ended up feeling bad for almost a week. He even suggested I get a lawyer which would likely cost more than I could afford in itself.
Did you have a business account on PayPal? Because as far as I read, that is who the CRA went after. That or you have moved literally $1000s worth of gear over the past few years.
 

Surgeon

Member
Messages
1,144
Canadian here: I have a good buddy who went through the same thing (he's a sneakerhead, not a guitar player). He bought and sold but to him it ended-up being a good money-making endeavour so he just ended-up paying taxes on what he earned through it and everything ended there.

I think the key here will be to find ways to prove that you don't turn a profit from that nor is it a front for illegal activities (which may be more difficult, considering that a smart criminal usually hides his wrongdoings well). Being audited sucks indeed. That lawyer may not be a bad idea, as expensive and sucky as it sounds.

Best of luck!
 

Tootone

Member
Messages
5,321
The Canada Revenue Agency recently won a court case that forced PayPal to show them my transactions among many others. They want to do all 7 years and are digging deep. They dont believe I'm buying and often selling gear because it doesn't suit me, I need to pay for something else etc. They assume I'm buying and selling them for a profit. I doubt I can find paperwork on all my stuff including what I bought or traded elsewhere. They are making me feel like a criminal even though I lost money on almost everything gear wise that I had to sell. With the kind of digging being done, I'm worried they'll assume something that I can't prove and I'll be paying more money than I have. After speaking to that agent and being pressured, I ended up feeling bad for almost a week. He even suggested I get a lawyer which would likely cost more than I could afford in itself.

Paypal records are a good thing in your case. They will either show a loss or very slim profit... in which case you wont get taxed and they'll leave you alone.

They are probably turning over stones looking for undeclared retailers.... whether they consider it a hobby or not, if they are making a profit... the IR will want its cut.
 

Mikeroesoft

Supporting Member
Messages
1,686
Are they coming after you for income tax (money you made on transactions) or taxes (importation taxes/duties) that that weren't paid on the items themselves as they crossed the border? If you've been up front with the cross boarder stuff and have already paid the taxes, they'll have a record of all of that stuff too and you should have nothing to worry about. They're not looking to steal from people, just recoup money that should have been paid when you brought the good into Canada.

If it is for income tax purposes, then I am not sure. Seems anyone buying and selling gear these days isn't making much if anything at all.
 
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