Getting audited by the Canada Revenue Agency largely due to GAS

Discussion in 'Guitars in General' started by vortexxxx, Aug 12, 2019 at 3:29 AM.

  1. Guitarfool

    Guitarfool Supporting Member

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    Stories like this REALLY piss me off

    They have nothing better to do than go after little guy

    Super curious how this turns out, it sounds like your getting fully vested in this, (obvious reasons) please keep us posted and good luck
     
  2. Declassified

    Declassified Member

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    Did you read the posts? he hasn't filed taxes in YEARS. That is the reason for the audit, he's using gas and paypal as an excuse.
     
  3. TwoHandsTenThumbs

    TwoHandsTenThumbs Silver Supporting Member

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    Yep. The audit was almost certainly triggered by a failure to file. They probably first checked to make sure you were alive, if you stopped filing after years of routine filing. Once your mortality was confirmed, the failure to file for a number of years triggered an audit.

    Honestly, your buying and selling habits had nothing to do with triggering an audit.

    The volume may now be considered in light of determining income sources. Income from the sales = selling price - cost of goods. If you routinely sold for less than you paid, those particular transactions don’t yield a number that is >$0, i.e. not income, and thus don’t count toward your liability.

    Time to talk with a Chartered Accountant.
     
  4. vortexxxx

    vortexxxx Member

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    Good idea as I was wondering what to do about things I can't find a receipt or purchase listing for. Thanks!
     
  5. vortexxxx

    vortexxxx Member

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    PayPal sent an official letter to me describing what happened in the courts regarding PayPal turning over its records to the Canadian government about a year and a half ago. This was done all in one shot for canadians who had accounts that were business. Other people are dealing with this as well who have filed taxes but didn't include PayPal transactions. The government wanted to go after these extra taxes. My sales over the 6 year period that PayPal sent me were just under 100k divided by 6 years isn't really a ton of money. The fact they didn't have this info before was the reason they didn't bother me before because they are claiming I have a business. Filing taxes would have avoided this but I would have had to show loss on my transactions and should have had to list all the PayPal stuff which a large amount of canadians weren't including. There are things I could have done differently which I regret but the tax officer is seeing it still as buying stuff in order to sell them as a business would which is why I have to show losses. I knew it would be messy, which was why I thought I'd deal with it when the time came in order to prove it. At this point they do not believe it's not a business, so I need to find a good accountant and get documents and printouts prepared.
     
  6. vortexxxx

    vortexxxx Member

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    They went after kajiji and craigslist sellers too that looked like they were selling too much based on what I read online.
     
  7. vortexxxx

    vortexxxx Member

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    I never renewed my business and my business bank account was closed years ago, so if I can convince them it's true (that I'm not running a business I stopped years ago), I can use many receipts and bills I kept or see if I can get bank records.
     
    Last edited: Aug 14, 2019 at 2:16 AM
  8. vortexxxx

    vortexxxx Member

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    Just to give you an idea of guitars I lost money on during this period:
    [​IMG]
    [​IMG]
    This purpleburst is not the one pictured above. I had this first:
    [​IMG]
    [​IMG]
    [​IMG]
    [​IMG]
    I was going to post more but imageshack that has photos of some of the guitars is very slow right now. You can get an idea how they would want tax from these few that I posted as it would be a good amount for them.
     
  9. Borg20

    Borg20 Member

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    Ok, if you can now claim that you're no longer operating as a business you should be fine. As for sales while your business operated you have no personal legal liability over it (this is why it's smart to incorporate). Did you incorporate as a sole proprietorship?
     
  10. Jabby92

    Jabby92 Member

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    The worst part here in Canada is they often fail at even going after the 'big' guys. Reason being is, all the rich people store money offshore and then the government has to deal with international laws and a bunch of other stuff. So it becomes a huge mess really fast. Its very rare to get audited and if you do get audited it has to be for a pretty good reason.
     
  11. uitar99

    uitar99 Member

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    Not a tax expert but a canadian familiar with CRA audits to many of my clients.

    CRA are finding places to audit through various sources: review of other business tax records being one. Not surprising that pay pal online business activity being targeted.

    They will also audit anyone/business who has any late payment tax account

    One CRA guy told me: they will usually find enough infraction (penalty payments) to make sure their trip is covered and: in the province I live there is $16 billion in unpaid/undeclared tax.
     
    NeuromancerAI likes this.
  12. GuitarGuy66

    GuitarGuy66 Member

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    I believe it’s an automatic audit after 7 years of not filing taxes. I went 6 years and figured I better get on it. Last year I filed my taxes for:

    2012, 2013, 2014, 2015

    This year I filed taxes for:

    2016, 2017, 2018

    All caught up, refunds every year.
     
  13. KenG

    KenG Member

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    Bull. Kijiji can only identify the price your add listed at. Sales are all in cash, in person by Kijiji rules and when you close an add you can give any reason, In other words Kijiji can only show you listed something, nothing more after that.
     
  14. scott

    scott Member

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    I know guys that went ten years without filing and only got nailed when they finally did file.
    The CRA is after business PayPal accounts right now. I know several people they went after this year. The latest government is looking for income sources.
     
  15. mlj_gear

    mlj_gear Member

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    Not me; I base it on Strange Brew.
     
  16. JWhite

    JWhite Member

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    Dude you got caught.
    Time to pay the piper rather than doing the “shuckn jive”.

    My two cents.
    In any event, good luck.
     
    kookaburra likes this.
  17. Papanate

    Papanate Gold Supporting Member

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    You'll only need to got to your bank and get the records of the last 7 years - that will put an end to their belief that you are making oodles of money every year. They can't go after you for cash - as they would have to prove you have the cash.

    They are trying to scare you into saying something incriminating.
     
  18. IT'S NOT A TUMAH

    IT'S NOT A TUMAH Member

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    To the op, it is definitely time to talk to an accountant. It may hurt your wallet initially in the short term, but you will avoid big headaches like this in the future.

    Fun fact: if your net income is less than $20k, any tax software will be freely available to you by law. I personally have been using SimpleTax.ca for years. They are a non-profit organization whose online tax forms are incredibly easy to use.

    It is my opinion that the only two reasons for not filing taxes are ignorance or malicious intent.
     
  19. vortexxxx

    vortexxxx Member

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    One guy was making $200. a day on kajiji. Maybe someone called the cra that was mad at him? You never know.
     
  20. vortexxxx

    vortexxxx Member

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    I was shown a page on the Canada Revenue site today that still says you don't need to file in certain situations. Another person I know who was under the limit showed it to me. It may make one suspicious though but it's not against the law.
     

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