Getting audited by the Canada Revenue Agency largely due to GAS

Discussion in 'Guitars in General' started by vortexxxx, Aug 12, 2019.

  1. Jabby92

    Jabby92 Member

    Messages:
    1,542
    Joined:
    May 14, 2019
    Location:
    Halifax, NS
    It doesn't work this way. Its not like buying/selling stocks or real estate, its a transaction that counts as income no matter if you take a loss on it or not. Any money hes made from buying/selling gear is seen by income by the CRA, thus its technically required to have taxes on it. The CRA sees it as 'oh heres a guy selling guitar gear out of his basement, thats a business', etc.
     
  2. Tootone

    Tootone Member

    Messages:
    3,314
    Joined:
    Sep 24, 2016
    Exactly. If you are trading 500 units a week, and clearing $6000/month in profit... the IR will be all over you like a cheap suit. That's an undeclared business.

    If you buy and sell a few guitars, maybe some old video games and a couple of pedals over the course of year... they aren't gonna start rocking your boat.

    They're after pirate businesses basically. I don't think OP has anything to worry about. Unless he's flipping 400-500 units a week for profit and was hoping nobody would notice.
     
    Last edited: Aug 12, 2019
    M. Gregory, HERSCHEL and Jabby92 like this.
  3. Jabby92

    Jabby92 Member

    Messages:
    1,542
    Joined:
    May 14, 2019
    Location:
    Halifax, NS
    Yeah, I'm thinking he must have moved some big numbers to get audited.. if you're moving like $10K+ worth of gear I can see why they could be interested.. or if you have a PayPal business account which it sounds like that is the lawsuit CRA won but that was over 2 years ago now.
     
    HERSCHEL likes this.
  4. Borg20

    Borg20 Member

    Messages:
    163
    Joined:
    Jun 1, 2013
    Location:
    Québec, Canada
    I don't get it. Do you operate as a sole proprietorship or small business? Why is CRA auditing you in the first place? Just because you buy stuff online is not a reason for an audit unless you claim revenue / losses from online sales.

    Something's missing here...
     
    stratmaniac, Sailindawg and MikeFM like this.
  5. madhermit

    madhermit Supporting Member

    Messages:
    419
    Joined:
    Dec 22, 2006
    Location:
    Toronto, Canada
    :p Close to 9000 posts on TGP for the OP. He likely has severe G.A.S.
     
    RCCola likes this.
  6. nowhere

    nowhere Member

    Messages:
    431
    Joined:
    Nov 17, 2018
    Actually, they do... and pepper spray... and 9mm pistols... and, sometimes, 12 gauge shotguns and AR-15's.

    I know a guy who claimed he was not subject to tax here in Canada because of his religion. Never went to jail, but that was only because he passed away before the trial was completed. Otherwise he likely would have got five to ten. Fortunately I've only had one close-up and personal encounter with CRA (the non-profit music school I offered to be treasurer for hadn't sent in a tax return once in the seven years since they were founded) and in that case the CRA agent was very helpful and professional.

    Find a good lawyer. Good luck.
     
  7. big mike

    big mike Plexi Loving Admin Staff Member

    Messages:
    10,686
    Joined:
    Oct 31, 2003
    Location:
    Here, there and everywhere
    Posts deleted, warnings issued

    1) no hate speech. be civil and use decorum
    2) if someone breaks the rules, report and move on, don't engage and start a bickering match
    3) don't quote rule breaking posts. it creates a ton more work for the mods to clean up, and we don't always see them all (#1 reason for thread nukage...one post easy to clear, multiples take much longer)
    4) the mods dont 'patrol' the forum for things to moderate. If you see something that breaks the rules, it's likely it hasn't been reported and/or not seen.
     
    PurpleJesus and madhermit like this.
  8. fjrabon

    fjrabon Member

    Messages:
    2,307
    Joined:
    Dec 20, 2010
    Stating you are a sovereign citizen doesn’t work here.
     
    stanshall and HERSCHEL like this.
  9. JWhite

    JWhite Member

    Messages:
    82
    Joined:
    May 26, 2019
    Get a lawyer. The jig is up.
     
  10. derekd

    derekd Member

    Messages:
    37,307
    Joined:
    Sep 10, 2007
    Location:
    In a van down by the river
    Yeah, that's the joke.

    Since all the other posters provided solid advice, I thought I'd toss in a little levity.

    Apparently, I missed.
     
  11. fjrabon

    fjrabon Member

    Messages:
    2,307
    Joined:
    Dec 20, 2010
    Oh, gotcha. Yeah... after being on enough guitar forums, I wouldn’t be surprised to see an actual, wildly misinformed “sovereign citizen” poster on here, so yeah, I took it as serious, lol.
     
  12. JWhite

    JWhite Member

    Messages:
    82
    Joined:
    May 26, 2019
    You know there’s more to it than just a handful of guitars. They didn’t go to PayPal on whim or they that had nothing better to do.
     
    hobbyplayer likes this.
  13. twoheadedboy

    twoheadedboy Member

    Messages:
    9,924
    Joined:
    May 23, 2005
    If they're going to accuse him of operating an undeclared business, then that business is going to have expenses and sales. He would have to pay sales tax, but if the expenses exceed the sales, there's no income to tax.
     
    madhermit likes this.
  14. scott

    scott Member

    Messages:
    4,364
    Joined:
    Jan 31, 2002
    Location:
    Canada Eh?
    Actually I know a guy that does it and he’s mastered it to the point where he doesn’t even pay house taxes, insurance, traffic tickets (including impaireds) the whole deal. They are constantly after him and he somehow manages to evade it every time. He is also obsessed with it and it’s all he talks about to the point where I stopped talking to him years ago.

    Anyway, i had a GST audit a few years back. They wondered why I got my GST back but I wasn’t sending any in. It was because I never sold to anyone Canada. They wouldn’t listen and sent a guy. They made me show him my shop and house. I had to prove I was actually a business. In the end they owed me money. LMAO!! Never heard from them again.
     
    superstratjunky, derekd and madhermit like this.
  15. vortexxxx

    vortexxxx Member

    Messages:
    9,120
    Joined:
    Apr 9, 2009
    Location:
    Toronto, Canada
    I used to run a business in the 90s to the early 2000s. My PayPal account had that name on it as well as my name as I didn't think it would matter since no such business exists any more. No bank account in that name no ads like I used to run. I used to sell rare videos but it's doubtful that I sold any videos of any kind during this period.
    I dont know to much about the rules but if I can prove the business doesn't exist can I get them to stop harassing me and stop the audit?
     
  16. Suave Eddie

    Suave Eddie Member

    Messages:
    9,975
    Joined:
    Dec 25, 2012
    Location:
    Ask your doctor if lobotomy is for you.
    How did you initially catch the attention of the CRA?
     
  17. vortexxxx

    vortexxxx Member

    Messages:
    9,120
    Joined:
    Apr 9, 2009
    Location:
    Toronto, Canada
    I had single guitars that I bought for 7 or 8k and sold at a loss of 2 or 3 I each so it adds up.
     
  18. vortexxxx

    vortexxxx Member

    Messages:
    9,120
    Joined:
    Apr 9, 2009
    Location:
    Toronto, Canada
    Payal sent a list of people who had business accounts to the Canadian government after the government went to court to get the list. I lost money in general based on what I originally paid for things, so I didn't declare it.
     
  19. vortexxxx

    vortexxxx Member

    Messages:
    9,120
    Joined:
    Apr 9, 2009
    Location:
    Toronto, Canada
    It is income tax but I often sold other things I owned in order to support buying a guitar I really wanted for example, so I was selling alot of stuff various things on Ebay to afford the collection I had. At some point I ran out of money and had to sell most of my collection. I've since started a new collection but that may need to be sold (and more) if I can't prove losses.
     
  20. Suave Eddie

    Suave Eddie Member

    Messages:
    9,975
    Joined:
    Dec 25, 2012
    Location:
    Ask your doctor if lobotomy is for you.
    Does your "business" involve buying and selling guitars? Why do you have a business account?
     

Share This Page

  1. This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
    By continuing to use this site, you are consenting to our use of cookies.
    Dismiss Notice