Canadian Government Brings Hammer eBay Sellers

Sellers who make use of eBay and other online sales sites will come under the scrutiny of the Canadian Revenue Agency (CRA). The CRA will begin contacting eBay sellers at the end of summer to ensure compliance.

In 2007, the federal court ruled that eBay must turn over information on its high volume Canadian sellers, and although eBay tried to appeal the ruling, it was rejected in April. Now the CRA is getting serious. In court filings, it appears that the CRA, for now, focusing on eBay Power Sellers from the years 2004 and 2005, and will continue from there.

If you fall under this category, expect the tax man to come a knockin’ in a few months at the most. As eBay is the largest target, there was no mention of other online sales sites by name in the CRA press release, but once they churn through eBay, I’m sure they’ll hit the rest.

There is an amnesty program however…

“To avoid paying these fines and penalties, taxpayers who have failed to file income tax returns for past years or who have not reported all their income can voluntarily correct their tax situation,” stated Minister Blackburn.

In fact, under the Voluntary Disclosures Program (VDP), taxpayers who take the initiative to correct or disclose any information will not be penalized or prosecuted if they make a full disclosure before the CRA starts any audit or other compliance action.

Consider yourself warned, Power Sellers!