Canadian Taxman Goes After eBay Power Sellers

About two years ago the Canada Revenue Agency (CRA) launched a probe into eBay Canada "Powersellers" to ensure that they were claiming all of the income that they earned. A PowerSeller receives various benefits from eBay Canada, there are varying levels and it takes about $3000 in annual sales to qualify. The probe focused on sales in 2004 and 2005 and involved about 10,000 people. The CRA now says that it is expanding it's investigation to include 2006 and 2007.

The CRA has been hampered by eBay's unwillingness to provide information, saying that the data is stored on eBay's servers in the US where CRA has no jurisdiction however last week the Federal Court of Appeal dismissed eBay's arguments.

"We're just alarmed by this," Andrew Sloss, eBay Canada's manager said in an interview yesterday. "I think everyone who values their privacy should find this alarming. This is a slippery slope. I mean, who will be the next people who will be the product of a government fishing expedition and have their privacy rights compromised?"

IRS Workers Charged For Snooping

Five workers at the Internal Revenue Service (IRS) return processing center in Fresno, California, were charged with computer fraud and unauthorized access to tax return information on Monday for allegedly peeking at taxpayers' files for their own purposes. "The IRS has a method for looking for unauthorized access, and it keeps audit trails, and occasionally it will pump out information about who's done what," says assistant U.S. attorney Mark McKoen. The number of such incidents is apparently on the rise, or the IRS is getting better at sniffing out the perpetrators as there were 430 known cases in 1998, and 521 last year. In these recent charges 13 taxpayers were compromised with each worker allegedly peeking at one to four tax returns, the incidents are from 2005 through 2007. Wired's Threat Level blog suggests "The age of some of the incidents suggests the Inspector General's office is breaking out new algorithms to find anomalies in audit trails going back years."

Canada's taxman gets win in court, e-bay to provide member sales data

The Globe and Mail is reporting that The Canada Revenue Agency (CRA) has won a court case seeking information about people who qualified for eBay's PowerSeller program in 2004 and 2005. According to the court filing e-bay members qualify for the PowerSeller program if they sell $1000 a month or more. There are 5 levels to the program with Titanium members selling in access of $150,000 a month and benefits include prioritized customer service, special promotions and sales tips. “The CRA is seeking to verify compliance with the obligations and duties under the Income Tax Act of certain Canadian taxpayers selling goods in an online marketplace,” said an affidavit filed in court by the CRA.