Lack of tax knowledge could be costing Quebecers: C.D. Howe Institute reports

I came across this article from the Montreal Gazette;

I strongly recommend that you take the time to read it.  It is brief, but very informative as it tells the story that I have been trying to tell for the past 20-plus years!  There is that there is a significant percentage of, not just Quebecers, but Canadians who leaving money on the table because they don’t understand the tax system, according to a report released by the C.D. Howe Institute last week.

The report — which bases many of its conclusions on a survey of 1,000 Quebecers — suggests that lack of knowledge is one of the reasons many people don’t take advantage of credits and savings vehicles, like RRSPs, which could reduce their tax burden.

“People might be missing out on benefits that they’re entitled to,” said Antoine Genest-Grégoire, a tax policy researcher at the Université de Sherbrooke and one of the authors of the report.

“It can take various forms, people can simply not know about the existence of the credit … sometimes, they know it exists but they don’t know how to use it or they find it too complicated.”

Survey participants were asked a series of questions about how the tax system works and the average score was just 55%.

It wasn’t just tax credits that left participants stumped. Respondents scored poorly on questions about progressivity — the idea that people with higher incomes pay a higher tax rate, a core principle of the Canadian income tax system.

While almost 90% of respondents knew that income tax rates differ based on how much people make, many struggled with the concept of bracketing — when different segments of an individual’s income are taxed at different rates.

“We hear a lot of people thinking that once you reach the top income brackets, you essentially pay close to 50% of your income in taxes,” Genest-Grégoire says, when in reality, it’s only the income above the cut-off for the highest tax bracket that’s taxed at the highest tax rate.

Only 26% of survey respondents were able to answer a question about that correctly.

While survey respondents generally had a good sense of whether they pay sales tax on everyday purchases, like groceries, prepared food and clothing, there were some exceptions.

For example, Quebec provincial sales tax doesn’t apply to books, a decision made to encourage literacy and support book publishers in the province. Only 21% of survey respondents knew that.

The result, Genest-Grégoire said, is that the public policy objectives of the tax exemption are unlikely to be realized.

The lack of tax literacy doesn’t just affect individuals pocketbooks, Genest-Grégoire said.
“People who don’t understand taxes tend to have lower trust in the tax system.  The Canadian tax system, even though you’re obligated by law to produce a tax return, works on trust.  The government doesn’t audit everyone,” he said. This lack of trust “makes tax avoidance, tax evasion more probable.”

Genest-Grégoire said the provincial and federal revenue agencies have taken steps to put more information online, but the system itself remains complex. One solution would be to make benefits that are currently provided through the tax system more accessible and for government to automatically enrol people, as is already the case with many benefits for children.

Warren Orlans, a former CRA Collections Employee turned Taxpayer Advocate has been saying for over a decade that the CRA needs to continue putting out information on the Internet, however it needs to be available in many different formats in order to be most effectively accessed by Canadians everywhere.  “Not everyone learns the same way, so having a concept explained in text, showing steps, and possibly with an example and even with little videos would expose the greatest number of Canadians to the message at once.”

“Every day, I deal with Canadian taxpayers and corporations of all sizes as they try to understand and interpret the CRA.  My 11-year’s experience at the CRA and 10-years outside the CRA have afforded me the ability to diagnose and resolve even the most complex of tax matters”, Orlans said.

If you need help understanding the CRA, or interpreting their letters or actions, contact the best, at inTAXicating.  Email: info@inTAXicating.ca. Or call us at 416.833.1581.

Toronto-based, Coast-to-coast tax liability expertise.

 

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Common GST / HST Questions asked this past week

Below are some common GST/HST questions ask by readers of this blog through either email, Facebook comments, Tweets, or search queries.  I wanted to share the question, and provide the answer to save readers some time.

Q: Can you charge HST without an HST number?

A: No.

Q: Collecting GST when not registered?

A: Don’t.

Q: When do I have to start charging GST?

A: When you register or when you earn more than $30.000.00, or $2500 in HST.

Q: Do I have to charge HST under $30 000?

A: Yes, if you’re registered.

Q: Can you charge HST without a HST number?

A: No.

Q: What is the GST $30000 threshold?

A: It is the threshold that the Canada Revenue Agency (CRA) states determines when you must register for the GST/HST.  Under $30,000 in taxable sales, registration for GST/HST is voluntary.  Once you hit $30,001, then it is required.

Q: Do I charge HST if I make less than 30000?

A: Earn, not make, and you don’t have to, but I strongly recommend it.

Q: What are the CRA invoice requirements?

Better worded as what are the invoice requirements if I am registered for the GST / HST?

A: To have your GST / HST number clearly displayed on the bottom of your invoices so people who pay you GST / HST know you are actually registered.

Q: How does GST or HST work?

A: Basically, if you sell or provide goods and services in Canada, you must charge customers the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) unless your business qualifies as an exception.

If your Canadian business fits one of the exceptions, it won’t have to charge, collect and remit GST/HST.
The two possible exceptions are:
1. You sell or provide a good or service that the CRA has classified at being “zero-rated” or “exempt”
2. You are a small supplier

Zero-rated goods and services, such as exports, medical devices or basic groceries, are charged 0% HST. Exempt goods and services, such as golf or music lessons, child care, etc., are exempted from GST/HST, so they are not subjected to the tax.

A small supplier is one who has total taxable revenues before expenses from all your businesses of less than $30,000 or less in the last four consecutive calendar quarters and in any single calendar quarter.

Q: Any industries or professions have to apply for GST / HST right away?

A: Yes. Taxi and limousine operators and non-resident performers have to charge GST/HST even if they are small suppliers.

Q: Do I want to register for GST / HST even though I’m considered a small supplier?

A: Yes

Q: How do I register for GST/HST?
CRA makes registration easy for Canadian’s. You can register by phone (call the Canada Revenue Agency at 1-800-959-5525), online, by mail or even in person at a tax office.
(Note that if your business is in Quebec, you need to contact Revenu Quebec instead at 1-800-567-4692 as they deal with GST/HST in that province.)

If your small business starts out as a small supplier and you make more than the small supplier limit ($30,000) you’ll want to register for GST/HST right away; in the eyes of the Canada Revenue Agency, you are now a GST registrant and you:
1) have to collect GST/HST on the supply that made your revenue go over $30,000;

2) have to register within 29 days of the day that you made the supply that made your revenue go over $30,000.

What causes problems for small businesses is they don’t realize they’ve gone over the limit until some time later when they’re doing the books and then discover they didn’t charge the GST/HST when they should have.  Small suppliers must watch their revenue carefully.

Q: What is a BN?

A: When you register, your business will be assigned a business number (BN); this is the number that you and the CRA will use to identify your business. (You’ll be using it on all your invoices, in your accounting system, and in all your tax-related correspondence with the CRA.)

Q: Do I need to charge the GST/HST?

(Answers the question whether or not you need to charge GST/HST on your sales of goods or services.)

A: Sales of zero-rated or exempt goods and the small supplier exception are discussed later.

Q: Shipping Out of Province: Should You Charge GST/HST?

A: Yes.  Depends on the province you are shipping to.  They pay the applicable rate in their province.

Q: What’s the difference between zero-rated and exempt goods and services?

A: These are two special classes of goods and services that the customer does not pay GST/HST on but in the case of zero-rated goods you, the provider of goods or services, can still claim input tax credits.

Hope this helps!

If anyone has any questions, concerns or comments about the GST/HST and need additional assistance, please contact us at info@intaxicating.ca

 

 

Don’t Forget The T3’s!

Are you a Canadian resident who also has an obligation to file in the US?  Before you send in your US taxes to meet the April 15th filing deadline, make sure to remember there is still one more tax slip on its way.

If you are set to receive a T3 for a Canadian trust, you have a little more time that your dual-filing counterparts.

T3 slips, otherwise known as the Statement of Trust Allocation and Designations (RL16 for Quebec residents), are being prepared and mailed – copies to the CRA – by the end of March.

A T3 slip reports how much income you received from investment in mutual funds in non-registered accounts, from business income trusts or income from an estate for a given tax year.

If you have not received your T3 tax slip – get in touch with the relevant financial administrator or trustee but make sure to file your income tax return by the deadline anyway to avoid late filing penalties.

You can find more information from the CRA website, here.

If You Can’t Beat Them or Join Them, Copy Them! Tax Law Firm Copies inTAXicating Winning Tax Solution Model

Imitation is the sincerest form of flattery.

If you can’t beat ’em, join ’em.biz name official

 

If you are fighting a losing battle, find your most successful competitor and do what they do!

If you are one of the many people who have paid tens of thousands of dollars to a prominent tax lawyer because they told you a lawyer was absolutely required to save you from the “taxman,” you are going to be really disappointed to learn the firm itself no longer feels that way.

As a result of a drawn-out and very public dispute with the Law Society of Upper Canada over their retention of client retainer fees to keep them from the reach of the Canada Revenue Agency (CRA), DioGuardi Tax Law has been forced to reinvent themselves into our firm, inTAXicating, by saying when people owe tax to the Canada Revenue Agency, a lawyer is no longer the most effective choice for ending the problem.

Oops.

From their press release, Philippe DioGuardi is reported to have said “People who owe tax are vulnerable to the Canada Revenue Agency’s aggressive collection tactics. They need fast and affordable ways to fix their tax trouble before the CRA comes after them with bank and wage garnishments or liens against their home and other property.”

Something I have been saying for the past 10 years!

In an effort to possibly save their business, the press release goes on to explain that hiring lawyers for CRA collections matters is time-consuming (read: expensive for clients) and slow: “They know what I know about fighting the CRA. And because they’re not lawyers, they can work more quickly to end people’s tax debt trouble for less than a lawyer would charge. Frankly, when the trouble is that you owe tax, you don’t need the hassle of hiring a lawyer to fix it.”

Unfortunately, the aggressive negotiation tactics DioGuardi’s firm is known for and which the CRA despises are still at the centre of their campaign.  They also boast a network of resources to assist people who need help with financing, and to slide people into bankruptcy when they cannot get financing.

DioGuardi’s previous radio advertising warned Canadians against searching for Tax Solutions on the Internet (so you will not find answers or firms like inTAXicating) and against so-called Tax Solutions firms, which are really Bankruptcy firms offering to “help” you with your tax debt by plunging you into bankruptcy after drawing out your tax file to incur more fees.

So inTAXicating now has a little competition … kind of … in the field of tax solutions and assistance with CRA issues.  You can either choose 17 years of tax experience – 11 of which were spent recently working in and managing CRA collections – or you can choose a firm which used to believe only lawyers can solve tax problems, but now tells you lawyers are not needed to solve tax problems, and oh, hey, they also used to work somewhere in the CRA 25 years ago.

Once this model wears out, watch for them to morph into Tax “Brokers” so they can do the work, and get paid after the fact, all in an effort to “protect” your money from the “Tax Man”.  It’s all the same everything, just dressed up in different clothing.

For us, nothing has changed.

If you have a tax question, issue, lien, or concern with the CRA, or RST, or need help regarding an audit or Taxpayer Relief, or just want to ask a tax question, then send an email to info@intaxicating.ca and you will have your answers.  If you need to hire us, we’ll tell you.  If you can handle it yourself but need a little guidance, we will tell you.

Our reputation is as important as your reputation.

inTAXicating Tax Services.  Canada’s only Tax Solution option!

Find us on Facebook, Twitter and check out our credentials on LinkedIn.  Our blog is always at http://www.intaxicating.wordpress.com

 

inTAXicating Is 6-Years-Old! Happy Anniversary. Let’s Share Links!

I received a surprising message from WordPress on Sunday, September 21st that this blog, inTAXicating,has celebrated it’s 6th anniversary!

Time flies!

Happy Anniversary inTAXicating.keep-calm-and-happy-6th-anniversary-1

That means it has been 6-years since I have been posting suggestions, tips, and recommendations surrounding the ins and outs of the Canada Revenue Agency (CRA), the IRS, Revenu Quebec and the WSIB.  I have written about these government organizations based on my practical work experience at the CRA and in private industry working closely with all of them.

I have posted some great stories and have so many more to come!

Compliance, Collections, Cross-Border issues, FATCA, Assessments, Liens, Director’s Liability, Audits, Negotiations, Accounting… I’ve done it all, and I’ve shared a lot of inside information that no one else hears about, or knows about.  Having all of this knowledge and wanting to share it is the driving reason behind maintaining this blog, and opening up a tax solutions business at www.intaxicating.ca.

I am also always looking for great Canadian tax content to read and discuss, so if you are a tax blogger, or if you have a different go-to site for Canadian tax information, please either post a comment on this post, or send me an email at info@intaxicating.ca and I will add the site to my blogroll.

The more Canadian tax information we can get together as a community, means we can help Canadian taxpayers that much better!

 

The Elevator Pitch! How Important Is It?

The elevator pitch, otherwise known as your ability to tell someone what you do for a living in 15-20 seconds without leaving out any critical details.

Wikipedia calls it this; “An elevator pitchelevator speech, or elevator statement is a short summary used to quickly and simply define a person, profession, product, service, organization or event and its value proposition.”

The name “elevator pitch” reflects the idea that it should be possible to deliver the summary in the time span of an elevator ride of around 30 seconds.

The term originates from a scenario of an accidental meeting with someone important in the elevator where after the brief pitch, the other party is interested in learning more. thus continuing the conversation after the elevator ride or through en exchange of a business card or smart phone details.

As a tax consultant, I thought I had the perfect elevator pitch that went something like this; “I help people who have problems with the Canada Revenue Agency (CRA).  I worked in the CRA for over 10-years – pretty much out of university – and worked my way up through the collections division until leaving for the private sector.”

I found it to be too long, and open for interruption so much that I would add details, such as that I completed 3-years of my accounting (CGA) designation and a 3-year MBA before leaving, or that I spent a significant part of my time at the CRA training the staff, handling the most complex accounts in the office and helping improve processes.

Then it became an elevator pitch for a 65-story building ride… To the top and all the way back down to the bottom.

Then I found an article in Forbes magazine which provided 6 alternatives to the elevator pitch so I tried them out to see if they worked better for me.  The list is below:

1. The One-word pitch – for me, it is “TAX”.  Then I watch their eyes gloss over.

2. The Question pitch – “Have you ever had (or have clients who had) problems with the Canada Revenue Agency (or Revenu Quebec, or the IRS, or WSIB, or the CRTC?)

3. The Rhyming pitch – Could not even try this.

4. The Subject line pitch – like sending an email to someone – mine would read something like “Former CRA collections officer helping people with CRA problems.”

5. The Story form pitch – I have thousands of stories… Literally.  I usually break into one of these after my introduction.

6. The Twitter or 140 character or less pitch #WhatIAmAllAbout.   I like this because it’s like using Twitter except that you really cannot tell someone that you “hashtag” Help People.  But it does give you the opportunity to state your case in a brief number of words.

So practice your pitch – no matter which method you choose – and practice them out on people to see if it gets across the message you want it to.  If not, maybe you would benefit from a different pitch or by adding or removing information to your existing pitch.

As for me… “I’m a former CRA officer who knows the CRA collections process, policy and procedures better than they do.  I help people with a variety of tax issues including but not limited to negotiation, payment arrangements, liens, RTP’s assessments, and getting them current and out of debt.  If there is a CRA issue, I have already seen it, and I know how to fix the problem.”

#x-taxer

Others make promises.  I fix problems.

If the conversation continues I explain my services are for individuals, businesses, and professional organizations who cannot proceed further with a client due to their tax issues – ie/ getting a bank loan, renewing a mortgage, confirmation of actual amounts owing before filing for bankruptcy, wage garnishments on employees, or cleaning up past tax issues for separation agreements or divorce.

#inTAXicating

Free consultation.

info@intaxicating.ca

416.833.1581

 

 

 

Unfortunately… Business is Booming!

Business is booming!

BOOM

I’m of two minds as I write this post.

First off, I am very excited that business is booming!  Emails never stop coming in, social media questions, posts, inquiries roll in, and my phone does not stop ringing, but on the other hand I’m a bit disturbed that business is booming because it means that there are a lot of people in tax trouble with the Canada Revenue Agency (CRA), and they ALL need my help.

With that in mind, here are the 13 things about my tax solution business – and any other business offering tax services – that you need to know so that you can make an informed choice.

13. If you have a Revenue Canada collections problem, would it not make the most sense to take advice from a former Revenue Canada Collector?  Someone who collected taxes, knows the ins and outs of the policy, procedures and legislation?  How about if that person also served as a resource office whose job it was to prepare accounts for assessments and produce them to the Department of Justice?  And what if that person also led teams and managed staff and projects in Collections?  Then you would have the best possibly option representing your interests.  Welcome to inTAXicating.  That is what we do!

12.  Accountants are awesome, and they are busy and you hire them to do accounting work, so they may not have the time to spend on the phone with the CRA negotiating your arrangement or trying to remove a garnishment.  Or, they may get to a point where the CRA refuses to budge and you have no bank account to use.  That is simply not acceptable!

11.   I worked for the CRA for almost 11-years, and I started as an entry-level collector, worked my way up through collections and along the way I led teams, trained staff, and handled some of the most complex files in the Tax Office. I was the resource officer for 5-years, and the Employee of the Year in 2002.  I was their go-to guy, and I still am. I’ll tell you like it is, and I’ll tell the CRA like it is.

10.   If you have a tax / collections / CRA question, you can and should ask it here.  I can tell you what the CRA is doing, and most importantly what they are going to be doing in the near future.  Email me or send it through social media, and I’ll answer it personally.

9. Respect. Given… and Earned. I treat you with respect and I treat the CRA with respect, because nobody wants to work with a representative who calls them “taxman”.  Trust me.  Talk about starting a relationship off on the wrong foot…

8. I do not prepare tax returns. I will not recommend you go bankrupt, and I do not pretend to have an office of “former CRA agents” armed at your disposal.  What I do have is a wonderful relationship with the best tax lawyer in Toronto, the best mortgage broker, CA’s, bookkeepers, financial planner, trustee plus my actual network of former colleagues at the CRA at your disposal.

7. You can hire me for an hour-long meeting after which I will give you a written report of our discussion along with my recommended course of action and the CRA’s probable plan of action. I will also tell you if you can handle it, and at what point you need to circle back to me.

6. I will not take you on as a client if you do not need my services.  I have a reputation to uphold.

5. You can take advantage of my fixed fee service for the entire length of the tax problem(s) so that you have the piece of mind your matters are being dealt with and that when we speak that you are not on the clock. Questions need to be asked and answered, and resolving your tax problem is the only priority, not padding your bill.

4. Areas of expertise include; Collections, Enforcement, Liens, Director’s Liability assessments, S160 assessments, RTP’s, debt management, negotiation and not just limited to the CRA. I’ve fixed tax problems relating to Revenu Quebec, the IRS, Workers Comp (WSIB) and the CRTC.

3. My website sucks! Yes, it does because I’ve been too busy to provide the content to the web developer for correcting. I’m okay with it too, but I will be changing it, soon.   My thought is that it’s better to have an adequate static website and spend my time solving tax problems, than spend millions of dollars a month on advertising then having to increase my fees so that you can pay my bills.

2. Some of the terms used to describe me and the services I perform are; x-taxer, priceless, unbelievable, compassionate, and informative, just to list a few descriptions of me and my business.  I care.

1. I’m really good at what I do. I know the CRA better than they do, and I certainly know what the collectors can and cannot do.  I fix tax problems and I enjoy it.  I am passionate about tax.  You might say I’m slightly inTAXicated.

 

So whether you just received a tax notice that you are not 100% sure about, or if you have a long history of being in Collections at the CRA, I can help you understand what you need to do.  I can navigate you through a Director’s Liability assessment where I have saved firms hundred of thousands of dollars, or negotiate the removal of a lien so you can finalize a house sale or divorce.  I can have your tax returns re-filed with correct figures to reduce balances, or bring your payroll up-to-date.

Two weeks ago a phone question resulted in a corporation not having to pay a $350,000 liability due to statute of limitations, and last week an hour long meeting uncovered 10 plus years of fraud being committed on a business by their CA.

inTAXicating

http://www.intaxicating.ca

416.833.1581

info@intaxicating.ca

@intaxicating

http://www.facebook.com/intaxicating

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Toronto-based but Canada-wide!