Getting audited by the Canada Revenue Agency largely due to GAS

KenG

Member
Messages
1,460
OP do you have a job and income otherwise, receive T4s etc? If you have no visible income it would rightly flag CRA that you must earning money in some other undeclared way.
Our current Fedral Government gave CRA a mandate to get more creative 4 years ago in sourcing taxable income. They quickly did away witha $2000 deduction for folks who are diebetic to assist with the costs of testing /treating.
 

Gibson Dog

Silver Supporting Member
Messages
1,399
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"
Is there a PayPal alternative that you know of? Everyone knew sales tax was coming & would be strongly enforced on NEW out of state gear. I was surprised that didn't happen 10 years ago.

@vortexxxx You can get a record of every pPal transaction, that along with some other easy to get info should be enough for them. This is a bunch of BS - this is a hobby I opened my eBay & pPal acct in Feb of 1999 & have been active since then.

In the big picture most people loose money doing this (but it's fun) if you need any supporting docs let me know. First of all it's BS to start going after people for this second it should be easy to show that this is not a money making venture, generally the opposite.
 

Borg20

Member
Messages
166
So CRA forced Paypal to hand over all your transaction details? Paypal Canada or Paypal USA?
 

PurpleJesus

Moderation is key
Staff member
Supporting Member
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8,653
I was gonna sell a lawnmower. Maybe I should just donate it. Lol. I’d hate to pay taxes on it twice.
 

dachshund

Member
Messages
791
I was gonna sell a lawnmower. Maybe I should just donate it. Lol. I’d hate to pay taxes on it twice.
Taxes on pre-owned things that were already taxed is confusing as hell to me. If youre going to tax it again, at least make it some kind of re-sale tax at a lower rate right? It should be 0 in my opinion, but at the most maybe 25-50% of the tax rate in that state.
 
Messages
1,093
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!
Be sure to get a fret dress if there are any signs of playing “Breaking the Law” by Judas Priest... if there’s any evidence of the progression on the frets. Haha. Seriously, I hope this goes well for you.
 

AnthonyL

Silver Supporting Member
Messages
3,442
OP do you have a job and income otherwise, receive T4s etc? If you have no visible income it would rightly flag CRA that you must earning money in some other undeclared way.
Our current Fedral Government gave CRA a mandate to get more creative 4 years ago in sourcing taxable income. They quickly did away witha $2000 deduction for folks who are diebetic to assist with the costs of testing /treating.
I lived in Vancouver as an expat back in the mid 2000’s. One day I was talking to my neighbor about payroll taxes as well as GST/PST - just general questions. He stopped me and said, “Don’t you know you now live in the land of tax?”
 
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3,857
burden of proof is theirs. my position would be simply- these were all personal purchases and sales- prove they weren't.

also this should be a wake up call that your behavior could be perceived as senseless.
 

BdaGolfer

Member
Messages
164
Did you ever close the business accounts with CRA from your original video activities? Sounds like you are conducting transactions on that account but not filing paperwork, from CRA'S perspective. They hate missing paperwork.
 

DreamTheaterRules

Former Lyricist for Calhoun Tubbs
Silver Supporting Member
Messages
4,400
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.
This totally sucks! Maybe your only way out is to get the guy to sign up at TGP and see what gas is really like, and how the compulsion fuels the constant sales for the next great thing. I'm sure you could find at least a few thousand threads proving one guy had a "this new pedal/amp/guitar I just bought is the greatest pedal/amp/guitar ever" followed three months later buy a "I hate to sell this but need to fund XXX" thread. That should prove it to him. :D
 
Messages
41
So CRA forced Paypal to hand over all your transaction details? Paypal Canada or Paypal USA?
Yeah, I have never been audited for any kind of online purchases and have been doing so on an on-and-off basis for the past 14 years. Something about this comes across as somewhat suspicious and I feel we are only getting the convenient parts of the story.
 

Dasein

Member
Messages
4,389
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.
Everything has a cost of goods attached to it..... what the OP has failed to tell us is if this is a personal income tax audit or if it’s a GST business audit. If it’s income tax, his income is net of cost of goods.....
 




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