eBay Canada Forced To Disclose More Sellers' Records To Tax Man

by Mike Godfrey, Tax-News.com, Washington

02 October 2009

The Canada Revenue Agency (CRA) has broadened its clampdown on the tax affairs of online sellers, issuing eBay Canada with a court-authorized requirement compelling the company to release the account information and sales data of Canadian resident eBay members who have made significant transactions via the site.

According to the requirement, eBay must divulge the full name, user id, mailing address, billing address, telephone number, fax number, email address, and the selling prices of items sold. The court order applies to eBay users fulfilling the following criteria:

• Users with sales of more than CAD20,000 and at least 24 sales transactions in any of the calendar years 2006, 2007 or 2008, (irrespective of membership in eBay’s PowerSeller program); or,
• Sales of more than CAD100,000 in any of the calendar years 2006, 2007 or 2008, regardless of the number of sales transactions.

eBay is only required to release sales information for the year(s) in which a seller met the above sales thresholds.

This is the second court order of its kind that eBay has received from the Canada Revenue Agency. EBay Canada was forced to provide the agency with the names and account information of eBay sellers, together with their merchandise sales records, as a result of a previous Federal Court of Canada decision. Despite an appeal in November 2008 (on a case that had been ongoing for two years), ebay was required to divulge information on high-volume traders (PowerSellers) during the period 2005-2006.

The CRA will be able to match the information provided by eBay to the records it already holds, to detect whether eBay traders have filed all the required returns and correctly declared their total business income. If the CRA determines that an individual or a business did not comply with the tax laws, it was confirmed that the CRA will take any necessary action, including, if necessary, in-depth audits.

“We recognize that this matter is of concern to our members. While eBay strenuously objects to this violation of our members’ privacy, we are obliged to comply with the court-ordered requests. eBay is alerting all members who are affected by the court order prior to disclosing their account information to the Canada Revenue Agency,” eBay Canada said in a statement.

“We remind all eBay members that they are responsible for ensuring that they are in compliance with all laws and regulations relating to their activities online.”

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