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The Taxman is Watching: Canadian Social Media Influencers Being Watched by the Tax Office For Unreported Income

Pro tip: If you are lying about your income on your taxes as a social media influencer, don't post about it on social media:

 

Via the National Post:

 

https://nationalpost.com/news/politics/the-cra-is-watching-you-auditors-scouring-social-media-for-unreported-income-from-influencers

 

Quote

OTTAWA – Every time Kylie Jenner — a massively popular American social media influencer and member of the Kardashian family — posts an advertisement for a product on her online accounts, she reportedly earns over $1 million from the brand.

 

Canada also has its fair share of social media influencers. Take Evan Fong, a Toronto area videogame commentator and streamer better known as VanossGaming, who reportedly raked in US$17 million in 2018 by attracting eyeballs to his social media channels such as YouTube.

 

Another influencer, Laval-raised video game streamer Félix “xQc” Lengyel, reportedly earned nearly US$2 million in 2020 on Twitch, an extremely popular live streaming service online. His job? Playing video games in front of tens of thousands of fans, who often pay money to subscribe to his channel and can even donate money to him.

 

Fong and Lengyel (who is now based in the U.S.) are just two random examples of the breathtaking revenues that some Canadians are earning through online platforms. And numbers like those have caught the Canada Revenue Agency’s attention.


The CRA is jumping on hundreds of Canada’s top social media influencer’s pages, parsing their content to spot any obvious signs of wealth or gifts. Then, they open up the individual’s tax filings and compare what they see online with what the person previously declared as earnings.

 

I suppose what they say is true about social media; if you choose to make a public post on social media, don't expect any privacy.

 

Obviously, people need to pay their taxes, but it's something interesting when the government is going through one's social media posts to look for any clues that you are not reporting income, and thus cheating on your taxes.

 

Per the article, the Canada Revenue Agency has about 60 people dedicated to a task force devoted exclusively to auditing people making money off the platform economy, doing a mixture of preventing non-compliance through something like e-invoicing, and then education, and then traditional audit. They've also conducted 40 exploratory audits of people and reassessed roughly $500,000 in total suspected unpaid taxes. There are another 200 audits currently underway.

 

They are also using two tools to also audit cryptocurrency transactions to help estimate what is the actual income flow so that they can compare that to the tax return the person filed to look for discrepancies as well.

 

The CRA is saying that right now, they are primarily focused on education over enforcement, but as time goes on, they will start using more traditional tools, such as tax audits to ensure compliance.

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Good. I know a few people who are dodging tax and it really pisses me off because i work full-time and have to pay tax to the full extent i am required to, but there's people taking advantage of a system that has not caught up to the times.

 

 

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It's one thing to not report that Candle you sold on Etsy - but if you're making significant income from any source - be it from Tips, or Instagram brand deals, you should be reporting that in your taxes.

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3 hours ago, dalekphalm said:

It's one thing to not report that Candle you sold on Etsy - but if you're making significant income from any source - be it from Tips, or Instagram brand deals, you should be reporting that in your taxes.

Ebay isn't taxable before $20,000 IIRC.

 

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19 hours ago, Andreas Lilja said:

Ebay isn't taxable before $20,000 IIRC.

 

That highly depends on the nature of what you’re selling. 
 

If you’re selling your own stuff used? Yeah that’s fine. 
 

If it’s obviously a business of some kind, it’s taxable income you should report. Especially if you have another job and that income could push you into higher tax brackets. 

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19 hours ago, Andreas Lilja said:

Ebay isn't taxable before $20,000 IIRC.

 

 

4 minutes ago, dalekphalm said:

That highly depends on the nature of what you’re selling. 
 

If you’re selling your own stuff used? Yeah that’s fine. 
 

If it’s obviously a business of some kind, it’s taxable income you should report. Especially if you have another job and that income could push you into higher tax brackets. 

selling at a loss, at lest in the US would get you around from paying taxes on ebay sales too.

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13 minutes ago, small guy64 said:

 

selling at a loss, at lest in the US would get you around from paying taxes on ebay sales too.

Sure but if you're selling used goods, you're probably not selling at a loss. You have to prove that with documentation.

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5 minutes ago, dalekphalm said:

Sure but if you're selling used goods, you're probably not selling at a loss. You have to prove that with documentation.

if you even report it. I'm willing to bet the most folks don't report sales of their old junk they sell online, ebay or else ware.

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4 minutes ago, small guy64 said:

if you even report it. I'm willing to bet the most folks don't report sales of their old junk they sell online, ebay or else ware.

I don't disagree that most probably don't.

 

And if you're just selling your old stuff, not a big deal.

 

But if you're buying and reselling goods (used or otherwise) for profit? That needs to be reported.

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1 minute ago, dalekphalm said:

I don't disagree that most probably don't.

 

And if you're just selling your old stuff, not a big deal.

 

But if you're buying and reselling goods (used or otherwise) for profit? That needs to be reported.

agreed.

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So when are they going to cross reference airbnb with tax evasion

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