The Globe and Mail reports that the Canada Revenue Agency has won a federal court order requiring eBay Canada to turn over the names, addresses, phone numbers and e-mail addresses of all high-volume sellers on the popular website. The CRA wants to find out whether those individuals or companies are reporting the income they made from online sales in 2004 and 2005.
The court's view of the ease with which data crosses borders is certainly noteworthy. It comments that:
"information cannot truly be said to "reside" only in one place or be "owned" by only one person. The reality is that the information is readily and instantaneously available to those within the group of eBay entities in a variety of places. It is irrelevant where the electronically-stored information is located…"
While the court is technically right that eBay has access to the data, this raises significant privacy concerns given that many privacy policies are based on the premise that it does matter where information is located. This decision provides a sobering reminder that when law enforcement or government authorities demand personal information – wherever located – companies will often face little alternative but to comply.
“This decision provides a sobering reminder that when law enforcement or government authorities demand personal information – wherever located – companies will often face little alternative but to comply.”
To a degree, certainly. However, if eBay had no physical Canadian presence (the court order lists the applicants as “eBAY CANADA LIMITED and eBAY CS VANCOUVER INC.”), it wouldn’t be nearly as simple a procedure, I’d guess.
bob
I think the very scarey part of the ruling is that the Federal Court has given permission to the Canada Revenue Agency to go fishing. The Canada Revenue Agency has a right and an obligation to go after tax cheats – But do they have a right to presume that ALL citizens and businesses are involved in tax fraud ?
There is no mention in the G&M article that the Canada Revenue Agency tried to use other means to get the information (like contacting the sellers directly through their eBay accounts) before applying to the Federal Court for the information.
The Federal Court should have made the Canada Revenue Agency contact ALL of the eBay sellers notifying them of the application and inviting them to ask for standing at the hearing.
I cannot find the original ex parte decision from November 6, 2006, in Court file No. T-1868-06.
The Federal Court review decision can be found here: [ link ]
War Tax
BIG ED says: Before the War we had no taxes and were told we wouldn’t pay taxes after the War.
Leave Ebay alone , the church doesn’t pay taxes. BIG ED out.
This is an utter outrage and breach of privacy..does our government officials have nothing better to do?
What rule of law & civil Society!!
As far as privacy goes in Ontario it does not apply at least for the low income people nor is it enforced…Ontario Government is breaching it everyday and the IPC has no teeth to enforce anything so they say…it holds true with the Feds IPC so how can they apply these laws when it only serves their whims???
How is big brother going to determine what someone paid for an item .Flea markets / garage sales and the non-business owners , don\’t give out receipts. Many times at large auctions they sell everything in a room or everything on a table as a lot. Also many times at an auction all your receipt states is \”Lot 123\” , it doesn\’t state what you actually purchased. What about all the items sold in newspapers (besides cars & realty) is Big Brother going to go after these sellers also ????? In the past 15 years , ever since the introduction of the FREE Trade Agreements by the Conservatives , 70% of all jobs in large industries have left Canada as the factories have closed their doors and went south. No factories , no jobs — no jobs , no money — no money more crime ……. WAKE UP
Both shocking and reassuring
I have just read the decision and find reassuring that the Court asserted jurisdiction on the information event though it was kept in a foreign country; otherwise anyone could evade the law by simply keeping his information on a server located anywhere but in Canada. It is good law.
However, the sort of fishing expedition authorized by the order appears to me to be in violation of Section 7 of the Canadian Charter insofar as it attacks the privacy rights of all eBay Powersellers – whoever they are and whatever they may have done, or not have done. The legislator might as well ask eBay, and every enterprise doing business in Canada, to send it monthly transaction reports.
HORRIFIED
This is an outrage. I just read the Canadian Crharter of Rights and Freedoms. I think 2 of our rights would be violated if this goes ahead.
7. Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
8. Everyone has the right to be secure against unreasonable search or seizure.
To tax people selling used items is unheard of. Little old ladies etc trying to supplement there pensions. Why don’t they just CANCEL the WAR on Drugs, and save billions there. Then they can TAX Drugs, and think of the Billions they can make. The war on DRUGS is a BIG waste of Taxpayers money fighting a War that will never be Won.
taxation: its the damn law
wow. such resentment towards paying tax here? last time I checked, paying taxes was the essence of a nation, and also the law.
It\’s good to see that laws have been clamped down to ensure that those selling taxable goods are indeed charging / paying the tax, and that people are disclosing their real incomes. As power sellers probably use ebay as a means of full-time employment there are probably quite a good handful that have chosen not to declare their proper tax information.
Another point to mention, in rebuttal to the constitutional points, is the section on legal rights. While section 7 entitles one to be free of actions that restrict their freedoms etc…, this must be noted as a constitutional right more fit for your rights if convicted as a protection against unnecessary government harassment. One would have to prove that you have lost your liberty and security because of the governments request for your transaction reports in regards to tax evasion.
Second, section 8 is inappropriate for this argument. That is a protection designed so that officers of peace or those of authority cannot use their powers against your rights without justified reasons. Tax evasion I think is an appropriate reason to begin investigating
I recommend checking out the full legal rights of taxation in the Income Tax Act, with emphasis on sections 239.
From an individuals standpoint who does declare all taxes, the CRA would be violating their \’taxpayer bill of rights\’ which promises that the law will be applied consistent [to all]
My $0.02
I think this is only the first step in what will appear to be greater governmental inquiry into online sales tax evasion. Ebay may have been targeted rather than other sites, but the rationality could be argued that the sheer size of the company user base acts as a good starting point in clamping down on those that choose not to declare.
My 2cents
Since when does being a power seller on ebay justify suspicion of tax evasion.
Good
I think it was a good decision. We are not talking joe blow who sells once and a while on ebay, it is power sellers which can mean millions of dollars. I pay my fair share of taxes and it is verfied through submission of T4 slips by my employer to the CRA. What is the difference? I do not like paying taxes, but I also like having social benefits and health care. The reactions on this blog are funny. Contacting every company would take forever and does not make good business sense.
HORRIFIED+
I paid taxes when I bought the item the first time, why do I have to pay taxes on the item when I sell it. I sell used goods, not NEW items. I can understand taxing people selling New items on eBay, or running a business. How can we that purchase at Garage Sales/Flea Markets or out of our Attics provide a receipt to show what was paid for the item. If I was to ask for a receipt it would get snatched out of my hands and sold to someone not requiring a receipt. I think they should have some clear rules set out before they go on this WITCH HUNT. Also was this not bought the first time with tax paid dollars, never mind having had paid GST and Sales Tax the 1ast time around. I could always collect welfare, instead of supplementing my megar income with a few sales of used goods. Besides once I do all the paper work, claim my gas, part of the house I use for eBay, and claimed what paid (although I can’t prove that and it will probably not be allowed) I will have lost money. It is just cause it is all documented and they want to hire more CRA workers to go through this mass of paperwork. Then farm it out to collecters who get 50% of any money they can collect. MAKES PERFECT SENSE TO ME. WITH THE SURPLUS AND ALL!!! Why don’t they just install a meter on all mattresses and we can pay tax each time it BOUNCES too!!!!
Malcolm
Read the decision and know your tax law. This is not a Witch Hunt and I agree with the decision and Hoss above. You do not have pay GST on used goods. CRA does have the auditors or the time to focus on small fry’s like horrified. The government is a funny thing, if you do your job well (like the CRA) people crap on you, and if you do it bad, like HRDC, people crap on you as well. Do not take it out on the CRA employee(s), put the blame where it belongs, the politicians, they make the tax law, the CRA enforces the law, and does a pretty good job (as the decision is indicating). There is no fishing when it comes to taxes and it is an overused and undefined word. Enforcement of the Income TAx Act covers off everything.
Am I mistaken, or isn’t that what a ‘company audit’ is for. Why is a court needed to allow Canada Revenue Agency to go “fishing”? I stongly resent the backhandedness of the government in this.
awesome
awesome…….pay ur taxes!! i do
ebay
quote: Why don’t they just install a meter on all mattresses and we can pay tax each time it BOUNCES too!!!!
that is what will happen…a screw tax..when they download all your so called “used goods” and hobby sales you have not claimed…you will be screwed..
pay your taxes and do the paperwork like the rest of us…you use the system when you need it like the rest of us.
it will level the playing field for sellers who pay tax and run a legit business.If you are in it you pay…simple!!! When you want health care do you bitch about it? It is only fair that we treat it as a business and pay our share.
It was coming sooner or later and computers just make it so much easier.I say go get em rev Canada!!
ebay tax
I hope they get them all!!! I have paid enough friggen tax on my ebay sales.Time for the rest to pay up.You all use the system when you need it…pay your taxes like the rest of us!!
Front Line Confrontation
Until there are enough individuals to say enough – the Fascist bullies at the CRA, DoJ lawyers and Fed Court will step on you cowards.
These Fascist Civil Bullies are the most dangerous people to our Freedom in Canada. Our democracy is already a ONE PARTY state, and if you doubt this -show us the alternative.
Get your act together people and stand up to this FASCISM in Canada. Show us the truth if it’s NOT true.
I’ll give the CRA , Federal Court, DOJ lawyers ALL of my information to bring me to justice. What a crock. Tell the Federal (fascist court) and the jerk off lawyer/judge to piss off.
Come on CRA – PICK ON ME. Please. Reg R Dahl . Bring it on you FASCIST scum!!!