The CRA Guide for T5008’s explains how to prepare this form, to account for the Return of Securities Transactions.  This form reports purchases and sales of securities.  Transactions are reported to all persons; individuals, corporations, partnerships, trusts, or ANY other person residing in or outside Canada.

Who has to file a T5008 Information Return?

  • every trader or dealer in securities who buys a security as principal (for their own account) or sells a security as an agent or nominee for any vendor;
  • every person in the business of buying and selling precious metals in the form of certificates, bullion, or coins who makes a payment to another person for a sale of precious metals by that other person;
  • every person who, as a nominee or agent for another person, gets the proceeds of a sale or other transaction carried out in the name of the nominee or agent;
  • every person who makes a payment to, or acts as a nominee or agent for, an individual resident in Canada for the disposition or redemption of a debt obligation in bearer form; and
  • every person (other than an individual who is not a trust) who acquires, redeems, or cancels a security issued by that same person, except when the transactions involve the following:
    • exchanges of shares for new shares in the course of a reorganization of the capital of a corporation (section 86), if no consideration other than the new shares is receivable;
    • securities disposed of when a partnership ends [subsection 98(3)];
    • securities transferred when a new partnership is formed from a predecessor partnership [subsection 98(6)];
    • convertible property (section 51), that is, when a corporation’s shares, bonds, debentures, or notes are exchanged for shares of the same corporation and no consideration other than the new shares is receivable;
    • redemptions, cancellations, or acquisitions of securities made during an amalgamation (section 87); or
    • exchange of capital property that is a convertible debt obligation for another debt obligation under section 51.1.

If cash or some other consideration totalling $200 or less is received instead of a fractional interest in shares during an exchange to which section 51 or 87 applies, you do not need to report the transaction. If the cash or other consideration is more than $200, you have to report the entire exchange transaction. 

You do not need to file a T5008 information return for:

  • a purchase of a security by one trader or dealer in securities from another, other than a non-resident trader or dealer in securities;
  • a sale of a security by a trader or dealer in securities for another trader or dealer in securities;
  • a sale of currencies or precious metals in the form of jewellery, works of art, or numismatic coins;
  • a sale of precious metals if you ordinarily produce or sell precious metals in bulk or commercial quantities;
  • a redemption, acquisition, or cancellation of a debt obligation by the issuer or agent when:
    • the debt obligation was issued for its principal amount;
    • the redemption, acquisition, or cancellation satisfies all of the issuer’s obligations;
    • there are no disproportionate payments of principal and interest to any person with an interest in the debt obligation; and
    • an information return other than a T5008 information return is required as a result of the redemption, acquisition, or cancellation;
  • a sale of securities by a trader or dealer in securities on behalf of a person who is exempt from tax under section 149 (for example, municipalities, registered charities, non-profit organizations, and registered retirement savings plans);
  • transactions reported under section 202 or 204 of the Income Tax Regulations;
  • a deemed disposition of a security; or
  • the expiry or exercise of an option, right, or warrant.

When is it due?

You have to file your T5008 information return on or before the last day of February following the year to which the information return applies.  For example, if you are filing a T5008 information return for 2009, it has to be filed on or before the last day of February, 2010. If this date falls on a Saturday, Sunday, or statutory holiday, your information return is due on the next business day. Note that several provinces and territories have their own unique holidays. Therefore, due dates may be affected depending on where you reside. For a list of public holidays, visit www.cra.gc.ca/duedates.

Cessation of Business:

If you end your business or activity, you have to file a return for the year or part of the year no later than 30 days after the date the business or activity ended.

You can send recipients an electronic copy of their T5008 slips. The recipient must have consented in writing or by email to receive the slips electronically.

Send the recipients’ copies of the T5008 slips to their last known address or deliver them in person. You have to do this on or before the day you have to file the T5008 information return.

New Language – Beneficial Owner for a W-8BEN

From the IRS;

A W-8BEN must be signed and dated by the beneficial owner of the income.  If the beneficial owner is a;

Individual – That person must sign and date the form.  The capacity line should be left blank.  For a minor child, a parent or guardian may sign and must enter “parent” or “guardian” where applicable on the capacity line.

Corporation – The form must be signed and dated by the President, VP, Treasurer, Assistant-Treasurer, CAO,, or any other officer, such as the Tax Officer, who has the authority to sign.  Forms signed by a receiver or trustee in bankruptcy on behalf of a corporation must be accompanied by a copy of the order or instructions of the court signing the form. 

Partnership – A general partner or member manager must sign and date the form.  If the form is filed on behalf of a partnership by a trustee, receiver or assignee, the fiduciary must sign instead of a general partner or member manager.  Forms signed by a receiver or trustee in bankruptcy on behalf of a partnership must be accompanied by a copy of the order or instructions of the court authorizing signing of the form.  The capacity line must state the tile of the person signing on behalf of the partnership.

Estate or Trust – A fiduciary must sign and date the form.  The capacity line must state the fiduciary’s title – such as trustee, administrator, or executor.


* fiduciary – A person or institution which occupies a position of special trust and has responsibility for the money, property or financial affairs of another

CRA employees steal $300,000 in refunds from Canadian Taxpayers

The Canada Revenue Agency’s (CRA) credibility is reeling after an Access to Information (ATIP) Probe revealed that 2 senior employees in the Debt Management division were found to have been stealing from Canadian Taxpayers.

This massive fraud was detected in 2008 and had been going on for almost 8 years in both cases, which shows that it was very detailed and well thought out because no one knew about it for such a significant period of time.

At the time this fraud was brought to light, there was a belief that it further implicated the lack of quality management inside the CRA – that it’s just not up to par with the responsibilities they are required to perform.  With access to people SIN numbers, and the ability to move billions of dollars annually, the current crop of team leaders, managers and all of senior management are shown yet again to lack the competency to properly manage staff and protect the interests of Canadian taxpayers.

What makes this fraud even more appalling is that while uncovered in 2008, the CRA kept news of it from going public for more than a year, until the facts were released through a request under access-to-information law.

In the one case, a veteran male CRA employee routed approximately $300,000 generated from illegitimate returns into his bank accounts. In the other case, a veteran female employee defrauded the Canadian public of approximately $100,000 through manipulating their systems into issuing refunds and payments to accounts she had set up and controlled for this purpose.

On September 16th, 2009, the CRA refused to name the fraudsters or reveal whether they were fired or charged and convicted, saying that to identify them would violate “privacy laws”.  The CRA also refuse to confirm or deny that any or all of the stolen monies were recovered after the fraud was discovered in 2008.  CRA spokeswoman Caitlin Workman did, however, reveal that “They no longer work here,” she said.  She also dismissed the notion that this fraud would erode the publics’ credibility in the CRA and that these two individuals actions an anomaly, “We have close to 45,000 employees here, and they deal with millions of tax and benefit files on a daily basis. And here we are talking about two individuals.  Yes, we take it very seriously, but it should also be put in perspective.”  Ms. Workman said internal fraud of this magnitude is very infrequent, “I don’t have any numbers for you but they are very rare.”

The Crime

The male employee took more than $300,000 by routing bogus refunds and related Canada Child Tax Benefit and GST credit payments to his personal accounts, the ATIP documents revealed.  “For the last eight years, at least, he had filed tax returns and claimed [benefits and credits] for individuals he did not know,” the Internal Audit investigation revealed.  “Based on the information gained and the list of social insurance numbers found at his workstation, it is reasonable to believe that [he] may have had a role to play in the issuance of illegitimate refunds on more than 50 accounts.”

The female CRA employee, prepared and filed hundreds of illegitimate returns, ensuring the tax refunds and goods and services tax credits were routed to her own bank accounts.

This was made public through access-to-information requests made by researcher Ken Rubin.

An important note is that anyone is entitled to make an ATIP request into their own personal tax information at any time.

Internally, this fraud was brought to light after other CRA employees became suspicious when they tried to verify some of the claims and could not reach the taxpayers in question.  The ATIP request found internal documents stating; “After reviewing the motor vehicle records and conducting credit bureau checks … [a staffer] was unable to determine the whereabouts of the taxpayers involved and could not establish whether or not they actually existed.”

Where it appears that CRA management failed the Canadian public the most is that the internal investigation turned up that both employees had made thousands of unauthorized searches into taxpayers’ accounts, including gaining access to their own files, and members of their family.

Unauthorized access is the most severe offense at the CRA, a current employee who did not want to be named stated that, “We are required every year to sign a document stating that we will not access information that does not directly relate to our work-load and for every account we enter, we are required to fully diarize the reasons for accessing it.  We are told that if we access information that we should not be accessing, we will have our access suspended immediately pending investigation and if found guilty, suspended or fired”.  There is no way that “thousands” of an authorized accesses should have been allowed.  It just goes to show that management let down the Canadian public by not knowing what employees are doing on a daily basis, or for allowing these accesses to occur without punishment.

It might come down to the fact that these (now former) employees were part of the “old boys network” and that their transgression were tolerated until it was brought to the attention of someone senior at the CRA who would not let it occur anymore.  The contact at the CRA stated that there are others who have been suspected of carrying out similar frauds who still are employed by the CRA including putting themselves on the payroll of companies they are auditing, or by accessing information of friends, colleagues or even staff their manage.

The bottom line here is this… Your information is safe at the CRA, and the CRA employees take privacy and security extremely seriously. There are significant consequences relating to access to information which can result in suspension or termination.  Every time there is a breach, the CRA immediately steps up and puts plans and procedures in place to make sure it never happens again.

So before you start bitching about the CRA, and about taxes – which is your right – make sure you take care of your own backyard and file your taxes on time, pay your taxes, and don’t carry a balance owing at the CRA.

Random tax stuff – withholding

A dividend payment from Canadian source dividends is subject to Canadian non-resident tax at a rate of 15%.

If the corporation is registered on the United States stock exchange, then it becomes IRS eligible, making the dividend payment subject to back-up withholding at the rate of 28%,

The 28% back-up withholding amount is reduced to 15% – the negotiated US – Canada treaty rate provided the holder submits a valid IRS form W9.

Without a W9, the holder is subject to 43% withholding tax (28% + 15%)

Leadership vs. Management

It’s always good to know the difference and what to expect from your Team Leader and from your Manager, or if already in a management role, what others expect from you…

In my opinion, the biggest difference between managers and leaders is the way they motivate the people who work or follow them, and this sets the tone for most other aspects of what they do.

Many people do both.  They are in a management position, but they realize you need buy-in from everyone in order to go down a difficult road, so they lead too.

The main difference…  Managers have subordinates.  Managers also have a position of authority vested in them by the company, and their subordinates work for them and largely do as they are told.  Management style is this case is considered transactional, because the the manager tells the subordinate what to do, and the subordinate does it in exchange for salary.   Managers are paid to get things done too, often within tight constraints of time and money, thus they naturally pass along work to their subordinates.

Another interesting finding relating to managers is that they tend to come from stable home backgrounds and lead relatively normal and comfortable lives.  This generally leads them to be relatively risk-averse and they seek to avoid conflict, whenever possible.  They like their personal and professional lives to mirror each other as they aim to run a “happy ship’.

Leaders… Have followers, not subordinates, at least not when they are leading. Many organizational leaders do have subordinates, but only because they are also managers. But when they want to lead, they have to give up formal authoritarian control, because to lead is to have followers, and following is always a voluntary activity.  Telling people what to do generally will not inspire them to follow you.  In order to build a following, you have to find a way to appeal to them by showing how following them will work out for you and for them.  They must want to follow you enough to stop what they are doing and perhaps walk into dangerous situations which they would not normally consider risking.

Leaders who have diplomacy and some charisma find it easier to attract people to their cause.  As a part of their persuasion they typically promise transformational benefits, such that their followers will not just receive extrinsic rewards but will somehow become better people, and enjoy the trip.

Although many leaders have a charismatic style to some extent, this does not require a loud personality. Good leaders are always very good with people, and they almost automatically give credit to others (and takes blame on themselves) which makes them very effective at creating loyalty that great leaders engender.

Although leaders are good with people, this does not mean they are friendly with them.  In order to keep the mystique of leadership, they often retain a degree of separation and aloofness.  separating office life from home to the greater extent helps.  Not hanging out with your staff / subordinates also helps set you apart.

This does not mean that leaders do not pay attention to tasks – in fact they are often very achievement-focused.  What they do realize, however, is the importance of empowering others to work towards their vision.

Earlier I mentioned that managers tend to be risk-averse, and to that point, leaders appear to be more along the lines of risk-seekers, not to be confused with thrill-seekers.  When pursuing their vision, leaders consider it natural to encounter problems and hurdles that must be overcome along the way.  They are thus comfortable with risk and will see routes that others avoid as potential opportunities for advantage and will happily break rules in order to get things done.

A surprising number of these leaders had some form of handicap in their lives which they had to overcome. Some had traumatic childhoods, some had problems such as dyslexia, some were overweight as a child, had acne, low self-esteem, or were shorter than average.  The overcoming of this event perhaps taught them the independence of mind that is needed to go out on a limb and not worry about what others are thinking about you.

The table below summarizes the above (and more) and gives a sense of the differences between being a leader and being a manager.  This is, of course, an illustrative characterization, and there is a whole spectrum between either ends of these scales along which each role can range and many people lead and manage at the same time, and so may display a combination of behaviors.




Essence Change Stability
Focus Leading people Managing work
Have Followers Subordinates
Horizon Long-term Short-term
Seeks Vision Objectives
Approach Sets direction  Plans detail
Decision Facilitates Makes
Power Personal charisma Formal authority
Appeal to Heart Head
Energy Passion Control
Dynamic Proactive Reactive
Persuasion Sell Tell
Style Transformational Transactional
Exchange Excitement for work Money for work
Likes Striving Action
Wants Achievement Results
Risk Takes Minimizes
Rules Breaks Makes
Conflict Uses Avoids
Direction New roads Existing roads
Truth Seeks Establishes
Concern What is right Being right
Credit Gives Takes
Blame Takes Blames

CRA Filing changes coming down the pipe… Potentially…

A couple items are coming down the pipeline at the CRA – so say my sources in Headquarters in Ottawa.  Since They are a couple years off at best, here are the main 2 which will have a significant impact on the general public, especially in industries where there is a lot of filing of slips and returns to be done. 

These items were announced in the 2009 budget on January 27, 2009.

1) Mandatory Electronic Filing for Information Returns – The CRA is tired of getting paper, loads and loads of paper which they then haev to key into their systems which is why they began converting systems about 10 years ago, so they could accomodate the vast amounts of informatin tehy expect to be receiving electronically.

Yes, a lot can be filed with the CRA electronically, on CD rom, or directly through the website, but going forward the CRA will charge a penalty to those filing in any way other than electronically through their website or via XML filing.  A smart move!

2) The CRA is in the process of developing a Canadian equivalent to the US W8 / W9 forms which require residents and non-residets of the US o complete valid forms and submit them to transfer agents in order to qualify for a reduced amount of tax withholding, if applicable. 

From what I’m told these forms will go hand in hand with the NR4 form and will be a Canadian version, so light on the requirements for now, but used by the CRA going forward.    Actually, my sources tell me that these forms will only need to be completed by people whose actual residential address is unknown since the CRA uses that address (domicile) for determining the treaty rate.

Sounds like good times are coming…  Tell you friends.

Here they come… IRS Builds New International Tax Group

The IRS has started putting together a new group to focus on international tax issues, including offshore bank accounts used to evade taxes.

An IRS unit that deals with large corporations and large partnerships has posted job openings for several positions in a new group that will “focus on examinations involving the complicated business arrangements and entities controlled by the high-wealth taxpayer segment,” according to IRS spokesman Frank Keith.

It shows the agency is “taking this very seriously,” says Roy Black, an attorney at Black, Srebnick, Kornspan & Stumpf.  The IRS looks to be assembling a “more sophisticated” group of examiners for the group, judging from the job postings, Black adds.

The group was formed to follow on a pledge by IRS Commissioner Doug Shulman to beef up international tax compliance, partly through a crackdown on people who use offshore accounts to evade taxes. President Obama’s 2010 budget earmarked extra IRS funds for this purpose.

IRS spokesman Keith said it would “be premature at this time to discuss further specifics” of the group that’s being formed.


I think the IRS should open up more than one phone line for international entities and actually have their officers be patient and understanding that those who are calling from say, Canada, may not understand the IRS way of operating and may need some tender love and care.  As it is, they come across on this line, from Pennsylvania, as being pompous, arrogant know-it-alls, unwilling to take a few minutes to explain anything to the callers.

At least that is my impression in the dozens of times I have called this line and spoke to a Mr. Jones, Mr. Smith or Agent 345678.

Is it too much to ask for some customer service too… Not everyone calling is a criminal!

Understanding your Boss

It’s no secret that tough times bring out troubling traits even in bosses who seemed supportive and easy to deal with, and employees should learn to develop strategies to cope with this behaviour.  When times are bad, employees are usually much more reluctant to push back.

Bosses, too, are under more stress from their bosses and from the economy.

All this stress makes for a dangerous work environment that senior management should be monitoring, because left to fester, it can demoralize workers, reduce job performance and damage relationships which cannot be repaired.

In order to learn to cope and succeed in these troubling times, it’s time for employees to develop strategies to manage their bosses and develop ways to avoid being a victim of their leaders’ rogue behaviour.  An employee will want to make sure that they stay in frequent contact with their boss and make it clear that they understand his or her agenda and do whatever you can to help make it happen.  Act as if you are in survival mode and that your boss is not going to want to sink their only possible life raft.

Another way to look at your bosses odd behaviour in times of recession or when the company is struggling is by trying to see your uncooperative boss like an unruly kid, and use the variety of parenting tactics that work on kids to get them to play nice.  By setting limits and boundaries, anticipating their needs, creating distractions to get their attention off a tantrum, you may be able to prevent conflict, and be prepared to use good timing and humour and reward their good behaviours to encourage it to continue.

 So what are the kinds of bosses to watch out for?   Do any of these resemble your boss, or you?  Here are some stereotypical bosses found on the Internet via Google;

 1) The chronic critic

The behaviour:  Frustration over having things not go his or her way makes this boss find fault with everything you do.

How to deal with it:  Stay resilient. Don’t try to defend yourself against the corrections or you will receive more of them. Instead, smile, take notes and then walk away without taking the comments personally.

2) The pass along boss

The behaviour:  This person responds to a growing workload by passing it on to you.

How to deal with it:  Keep a careful record of the fallout you’re carrying because of your boss’s absentee behaviour. Then when you have a review with your boss, show him or her the facts and ask for a reward for handling it, or a less arduous workload in the future.

3) The spineless boss

The behaviour:  This boss tends to hide out, either due to indecision or to uncertainty about what to say about a challenging situation.

How to deal with it:  Take the lead. Decide what needs to be done and approach the boss with documented evidence of why your recommendation should go forward.

4) The rule changer

The behaviour:  This boss reacts to uncertainty by regularly changing decisions and rearranging priorities.

How to deal with it:  Remain flexible and accept the fact that plans are tentative.  Check in daily to keep abreast of priorities to avoid wasting efforts.

5) The demanding boss

The behaviour:  When over-burdened and out of control, this boss turns to you, assuming you will take on ever more of his or her load.

How to deal with it:  Set boundaries, and stand your ground. When the boss gives you more work and your plate is full, make it clear you are busy and may need more time.  A reality check lets you show you’re helping with the load but setting limits on further burdens.

6) The insecure boss

The behaviour:  Constantly checking in and asking you to revisit finished work for fear of being second-guessed or reprimanded for not being good enough.

How to deal with it:  Stroke their ego.  Express confidence that work is on track.  Avoid talking about any doubts that could provoke further insecurity.  Regularly remind bosses of their, and your, past successes.

7) The distracted boss

The behaviour:  Too many things are on the boss’s mind, creating a short attention span, so ideas get forgotten and discussions need to be repeated.

How to deal with it:  Use props, visual aids and supportive materials to hold his or her attention. Make communications compelling and to the point. Follow up with a written summary of decisions.

8) The tantrum thrower

The behaviour: Angry because something is not going his or her way, this boss panics and lashes out at whoever is being blamed for the problem – or even the nearest unsuspecting target.

How to deal with it:  Call a time out. Never fight a tantrum with a tantrum, which will only make it grow. Find shelter until the storm passes. For instance, look at your watch and say, “I’ve got an important call scheduled. Would you agree to defer this discussion until later?” When you come back to the discussion, the emotion will invariably have lessened.

9) The fickle boss

The behaviour:  Even though you got approval and your project is well under way, the boss suddenly has another prime directive and asks you to start over.

How to deal with it:  Shore up the boss’s confidence in having picked the right course to begin with to make for less flip-flopping. Offer up supporting materials and endorsements of the wisdom of the plan from others.

10) The control freak

The behaviour: Fearful of being caught off guard when so many things are changing so quickly, this boss wants constant status reports and final say on everything that is going on, which means time-wasting meetings and long waits for a go-ahead.

How to deal with it:  Provide constant updates. No matter how time-consuming it may seem to soothe the boss’s anxiety, over time it will win trust and mean less constant interference.


In other words, its better to react like an adult, even though your boss may be acting like a child.  Also it helps to know the least stressful way to discuss things with your boss.  Some bosses prefer e-mail, whereas others favour phone conversations or face-to-face encounters.

Also learn to pick up on queues for the best and worst timing.  Avoid bringing up bad news or asking for favours at the wrong times – close to lunch, late afternoon, nearing time to go home.

Communicate regularly!  Sounds like a marriage…  Make dialogue with the boss part of your routine so it becomes more natural and less stressful.

Anticipate.  See problems coming and prepare a calming, positive spin.

Avoid unnecessary conflict.  If your boss is under a lot of stress, stay out of the line of fire.  

Don’t snap back.  If caught when the boss is having a tantrum, listen calmly and react with a comment such as, “I hear you,” then walk away.

Use humour.  Laughter is a great diffuser of tension, if appropriate.  Breaking out in spontaneous laughter might not be the best remedy, unless the situation warrants it.  

Manage up.  Be the voice of reason and calm under pressure. Your boss will appreciate that and want to stay on your good side.  Also shows your boss what you are capable of in times of crisis.

Work, don’t worry.  Dreading the storm clouds or wishing for a different boss just wastes time and will distract you from doing your best work.

 With all this insight into what your boss may or may not be like, the key concepts to remember are the same in work as in play;  communicate, be respectful and work hard.

Good luck!