The Canada Revenue Agency Collections Officers are Back in Business: and they’re coming for you!

October is here, and the Canada Revenue Agency (CRA) have been given the green light from the Federal government to collect money.

As a result, Collections, Audit and Appeals are all back in business and they are looking for you!

The CRA’s Collections department are officially back at work this week, able to make collections calls, send collections letters and find money. If you owe money to the CRA, or if you have any outstanding returns owing to the CRA, you can expect to hear from Collections.

Thanks in part to the massive amount of money that this Federal government gave away during the COVID pandemic, you can also expect to be contacted by an auditor, if you received any of those benefits.

If you do hear from the CRA, you might want to act fast. They have been given the orders to act fast, and collect / recover as much money as they can in the quickest manner. That means you can expect a call for a verification audit, and before the phone connection terminates, a letter will be on it’s way, giving you a week or 2 to respond and provide information. If you miss that deadline, your case will be closed, and your file passed along to collections.

If you received any government benefits via Direct Deposit, then the CRA already has your banking information which means once the amount is deemed collectible, they can (and will) just take it from your bank account.

It will be that fast.

Additionally, if you were behind on compliance with the CRA (haven’t filed returns up to date), and you failed to get those done while self-isolating, don’t expect the Collections group to have any mercy on you. You had “plenty” of time to get that done. No excuse or explanation is going to buy you more time.

If you incurred new tax debts, and haven’t made arrangements, or had previous arrears and didn’t make arrears payments while interest rates were at 0%, you have no excuse, in the eyes of the CRA, as to why you still have a balance, or are unable to pay.

The 0% interest rate on balances owing is gone, and the CRA have been given the marching orders from above to collect, collect, collect.

If you need help with anything CRA related, do not hesitate to contact us for assistance, at info@intaxicating.ca

Provincial and Federal Student Loans: Resources and Information to help you Navigate the System

You have taken out a student loan to assist you while you go to school. Keep in mind that whether you complete school, or drop out, you still have to pay back that loan, and not doing so can have considerable consequences.

In my early 20’s, I had taken a part-time job working for Equifax who at that time collected student loans. I recall a conversation with a girl in Kanata, Ontario who owed $40,000 on her loan and was paying $10/month.

Rather than yelling and her and demanding payment, I asked her what she intended on doing with the loan. She was quite sincere when she said that she was making the $10/month payments to appease the collection agency and that she felt she didn’t actually owe the loan.

I felt bad.

When I asked her why she didn’t owe it, she said simply because she didn’t go to school, thus didn’t need the loan for school.

“So, what did you do with the money you got from the government?”, I asked.

“Oh, I bought a car, a huge TV, and some new clothes… But I didn’t use it for school.”

“Oh”, was all I could think of… “but you took out a loan, and still need to pay the money back.” I spent the next 15-20 minutes answering questions and providing information.

2 days later she filed for bankruptcy.

She should have used that money and gone to school!

Regardless, there is a lot of information regarding student loans and how to get out of them. Rather than looking at it solely from that way, let’s look at them right from the begging through to the completion of the loan.

Beginning with, once you get a loan:

Make a plan to repay your student debt

1. Who you need to repay

You may have loans or lines of credit that you need to repay to the government and/or your financial institution. In some provinces and territories, Canada Student Loans are issued separately by the federal and provincial or territorial governments, which means, you could have more than one loan to pay back.

Verify your contracts to determine where your debt comes from and where you need to repay it.

2. How much you need to repay

Verify your loan or line of credit contract to figure out the following:

  • Total amount owing
  • Interest rate applied to the debt
  • How to repay the debt
  • How much to pay
  • How long it will take to pay back the debt

Contact the organization that provided your student loan or line of credit if you don’t have the information listed above.

3. When you need to start paying

Different repayment rules may apply depending on your type of student loan.

Canada Student Loans (CSL)

CSL’s have a 6-month non-repayment period after graduation and during that period, payments do not have to be made and interest will not be charged on the loan. This period begins after one of the following;

  • Finish your final school term
  • Transfer from full-time to part-time studies
  • Leave school or
  • Take time off school

Before the 6-month period ends, you’ll have to log in to your National Student Loan Service Centre account to find out your repayment schedule.

Note: You can and should still make payments at any time after receiving your loan. You don’t have to wait until after the 6-month period ends to start repaying. Paying it early and often reduces the amount of principle owing which reduces the amount of interest charged.

Find out more about the repayment schedule and options for your Canada Student Loan.

Click here to: Log in to your National Student Loan Service Centre account

Provincial student loans

The repayment rules of provincial student loans vary depending on the province or territory where you applied for your loan.

Find out about repayment rules and schedule for student loan programs in your province.

Student Lines of Credit (SLOC)

If you have a SLOC through your financial institution, you’ll have to pay the interest on the amount of money you borrow while you’re still in school.

After graduation, many financial institutions provide a 4 to 12-month grace period during which only interest payments are required to be made. This benefits the institution because they’re getting your interest payments and you are not reducing the amount of principle owing. Once the grace period ends, you’re back to paying the debt through a repayment schedule agreed upon with that institution.

Contact your financial institution to get information about paying back your student line of credit.

Having trouble paying

If you need help with repaying your CSL, you may qualify for the Repayment Assistance Plan (RAP).

Find out more about the Repayment Assistance Plan for your Canada Student Loan.

If you’re having trouble repaying a provincial student loan, contact your student aid office. For repayment assistance with a loan or LOC provided by your financial institution, contact your branch to determine what your options are.

Understand that by making your payments smaller, it will take you longer to pay back your loan. You’ll end up paying more interest on your loan.

Find the student aid office in your province or territory.

How student debt affects your credit score

Student loans and lines of credit form part of your credit history which means if you miss, or are late with, your payments, it can affect your credit score.

Your credit score shows future lenders how risky it can be for them to lend you money. A poor credit score makes it difficult to borrow money from a bank, get a credit card, and can impact your ability to get a job, or rent an apartment.

Bankruptcy

Understand that if you file for bankruptcy within seven years of finishing your studies, your Canada Student Loan won’t be discharged. You’ll have to continue paying back your loan.

Learn how bankruptcy affects your CSL debts.

Tips to repay your student debt faster

1. Make lump-sum payments

Making lump-sum payments at any time will help you pay down your loan faster. Lump-sum payments will go toward interest first and then to the principal of your loan. Paying down the principal reduces the total amount you owe, which means you pay less interest.

If you make lump-sum payments while you’re in school or during the 6-month non-repayment period, the payments go towards the principal of your loan.

Find out about making lump-sum payments on your Canada Student Loan.

2. Increase the amount of your payments

The amount you pay over and above your minimum payment goes toward the principal of your loan, which decreases the total amount you owe, and the amount of interest you have to pay.

3. Budget your payments

Build your student debt payments into your budget and make payments that are larger than the minimum payments. You can also speak with your financial institution about setting up automatic payments.

When planning your budget and automatic payments, make sure you know when your payments are due. Remember that if you have more than one loan or line of credit, you may have more than one payment due date.

Loans in Default

Rehabilitate Canada Student Loans and Canada Apprentice Loans in Default

As of January 1st, 2020, borrowers will have a new option to rehabilitate Canada Student Loans and Canada Apprentice Loans in default. The option is to add interest to the principal of your loan (capitalize the interest) and make two payments to rehabilitate your loan.

Repayment assistance

Missed loan payments? Can’t make payments? The Government of Canada has repayment assistance options that may be able to help. Contact the National Student Loans Service Centre (NSLSC) and your provincial or territorial student financial aid office to discuss repayment options.

Canada Student Loans

If you have a Canada Student Loan, one of the following measures may be right for you:

Repayment assistance

Getting your loan out of collection

If you have missed 9 months of payments, your federal student loan will be sent to the Canada Revenue Agency (CRA) for collection.

Once in collection, you are no longer able to get student aid. To be able to get student aid again, you must bring your loan up to date.

  • Contact the CRA to make a payment arrangement and bring your loan up to date.

For the provincial or territorial part of your student loan, you will need to contact your province of permanent residence.

For borrowers from Saskatchewan you may contact the CRA for both federal and provincial parts of your student loan.

Rehabilitate your Canada Student Loan

If your loan is in collection, you may be eligible to bring your Canada Student Loan up to date. To do so, contact the CRA to see if you are eligible to rehabilitate your federal student loan. Make payments equal to two regular monthly payments and choose one of the following options:

  1. Pay off all outstanding interest on your loan, or
  2. Add all unpaid interest to the balance of your loan. You will receive a new payment schedule for the new balance.

Note: The option to add the unpaid interest to the balance of your loan can only be done once.

Once you make your payments, call the NSLSC and ask to speak with a Canada Student Loans Program agent. You should receive a new repayment plan within one month.

Bankruptcy doesn’t erase student loans during the first 7 years

Be aware: if you file for bankruptcy within seven years of finishing your studies, your Canada Student Loan won’t be cancelled. You will have to continue paying back your Canada Student Loan.

Industry Canada provides a helpful resource to learn how Bankruptcy affects your Canada Student Loan debts

CRA Snitch Line Accepting Tips on COVID Fraud

The Canada Revenue Agency (CRA) have announced that they are opening up their Informant Leads (snitch) line to information regarding COVID-19 benefit program fraud.

Amid reports that people are double dipping or taking the benefits when there are not entitled to, the CRA are intent on not waiting for 2021 when people file their tax returns, but are asking for Canadians to come forward and provide information regarding the Canada Emergency Response Benefit (CERB), the Canada Emergency Student Benefit (CESB), and the Canada Emergency Wage Subsidy (CEWS).

The Snitch Line accepts information of tax cheating such as not declaring all income, accepting “under the table” cash payments or setting up a fake business to claim losses and thus reduce taxes. The information reported goes right to an audit group, who compare the information they receive with the information the CRA already has on that individual and business, and if the amount to recover is significant, will act to seek recovery.

The CRA said it is looking for information regarding people who are receiving either CERB or CESB who were ineligible, or businesses or charities who are “misusing” the wage subsidy program.

The decision to go after cheaters marks a significant turning point in the Trudeau government’s desire to take on fraud of COVID-19 emergency aid programs. In mid-April, a CRA spokesperson dissuaded Canadians from snitching on potentially ineligible CERB recipients because, at that time, the CRA said their focus was on “getting crucial (CERB) payments to those who urgently need it now.”

The CRA stated that those who received a payment to which they weren’t entitled will be required to repay the amount in due course.

Due course meant with the filing of the 2021 personal income tax return for many who applied for and received the credit, only to learn that their income did not dip below the amounts making them eligible to receive the funds. With so many Canadians providing direct deposit information to the CRA, means that with direct access to your bank account, the CRA can take those funds when they want. It also means if there are not sufficient funds in your bank account that the CRA can freeze you bank account and send a garnishment to your employer, if warranted.

With this significant change in direction, it should be noted that any business or individual who are caught receiving money they we not entitled to, will be ordered to reimburse it and it could be quite costly. In the case of the wage subsidy, a business which falsified documents, in order to claim the benefit can face penalties up to 225% of the amount received through the program.

The CRA and Service Canada have records of all individuals who’ve received payments for the CERB and CESB. What has changed is that the CRA have brought in their audit staff – presently not working on audits due to COVID – to verify payments were correctly allocated.

How to Snitch

In order to successfully provide information to the CRA through their Informant Leads line, there is information that the CRA requires.  Remember, all information provided to the CRA is anonymous.

Depending on the program they may have falsely claimed, the CRA would require details on the suspect’s work situation (CERB and CESB), their schooling situation (CESB) or their employer’s number of employees and total payroll (CEWS).

In many cases, people brag to their friends and neighbours about how stupid the government is, by providing them with benefit payments when they are not entitled, and that information is usually enough for the CRA to investigate.

The link to the CRA’s Informant Leads Program information, is here.

Filed your 2019 Personal Income Tax Return: Now what?

What an absolute crazy year 2020 has been thus far!

The tax filing deadline for individuals to file their 2019 personal income tax returns (T1) in Canada was June 1st, by 11:59pm. For Canadians who have earned self-employment income, their returns are due by June 15th, 2020. Payments for balances owing are due to the CRA by September 1st, 2020, and the CRA is currently not charging interest on exsting balances owing the them, nor interest or penalties for any late payments or filings for the time being.

New and enhanced services

Check CRA processing times – Want to find out quickly how long it will take for the CRA to process your return, or your refund? Use the Check CRA Processing Times tool on canada.ca to get a targeted completion date. The new tool uses published service standards and information you select from drop-down menus to calculate targeted completion times for various programs.

Dedicated telephone service for tax service providers – If you are still working on a tax return(s), the CRA have been offering this service to small and medium income tax service providers across Canada for the 2020 tax filing season. By using this service, income tax service providers can connect with experienced CRA officers who assist with complex tax questions.

Representative authorizations – Thank goodness, the CRA has created a new e-authorization process for online access to individual tax accounts which permits representatives to request access to individual tax accounts using a web form through Represent a Client. As a result, the existing T1013 form will be discontinued for access to individual tax accounts.

The T1013, RC59, and NR95 will be combined into one form called the AUT-01 Authorize a Representative for Access by Phone and Mail. This form will only be used to request offline access to individual and business tax accounts.

Owing Money to CRA

If you have filed, or are about to file and you owe money to the CRA, there are a couple of critically important facts you should keep in mind.

  1. If you have applied for any of the COVID-prompted benefit programs, and have done so through Direct Deposit, you may, unfortunately, be at risk.
  2. The CRA is delaying the payment of balances owing until September 1st, while not charging interest on all accounts except payroll accounts. This shouldn’t mean its okay to forget it until the fall, but rather, with no interest being charged on existing balances, its the best time to figure out ways to catch up, set aside funds, or find / earn funds to pay off the CRA
  3. Before we all know it, it will be September, and a few things will be certainties. Our year-end will be fast approaching for the 2020 tax filing season, any balances owing to the CRA will be due, and the Canadian debt and deficit will be through the roof. The Federal government will need those funds ASAP, and aside from raising taxes, they will likely begin aggressive collections of taxes owing. The quickest way the CRA can recover funds, is by issuing a Notice of Assessment (which has legal warning in it) and then taking those funds from your bank account.
  4. You have options outside of bankruptcy, consumer proposals, high-interest loans, or high-rate mortgages. Preparing in advance for this situation and working with the CRA can prevent unwanted or unexpected surprises.

 

The CRA’s collections staff have already been advised where to locate direct deposit information and how ensure it is accessible when full collections are permitted.

Don’t wait until it’s too late.

inTAXicating can assist with anything CRA-related. With over 10-years experience working in the CRA’s Collections department, we know things the CRA will never tell you.

 

Canada Emergency Commercial Rent Assistance (CECRA)

What is the Canada Emergency Commercial Rent Assistance Program (CECRA), and how does it work?

The CECRA program will provide forgivable loans to qualifying commercial property owners to cover 50% of three (3) monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.

The Program

The loans will be forgiven if the mortgaged property owner agrees to reduce the small business tenants’ rent by at least 75% under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25% of the rent.

Who Qualifies as a Small Business Tenant?

Impacted small business tenants are businesses who;

  • Pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement),
  • Generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level), and
  • Have temporarily ceased operations (i.e. generating no revenues), or has experienced at least a 70% decline in pre-COVID-19 revenues.

Property Owners

CECRA for small businesses is applicable to commercial property owners with:

  • Eligible small business tenants
  • Eligible small business subtenants
  • Residential components and multi-unit residential properties with commercial tenants (i.e. mixed usage)

 

To qualify, property owners must meet the following requirements:

  • You own property that generates rental revenue from commercial real property located in Canada.
  • You are the property owner of the commercial real property where the impacted small business tenants are located.
  • You have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants.
  • You have entered OR will enter into a rent reduction agreement for the period of April, May, and June 2020, that will reduce impacted small business tenant’s rent by at least 75%.
  • Your rent reduction agreement with impacted tenants includes a moratorium on eviction for the period of April, May and June 2020.
  • You have declared rental income on your tax return (personal or corporate) for tax years 2018 and/or 2019.

 

How Does it Work?

While it is expected that CECRA will be operational by mid-May, commercial landlords are expected to either enter into the agreement, reducing rent immediately, or, once the program details have arrived, enter into the agreement and refund the monies to the tenant.

 

What Will CRA be looking for?

In order to support the credit, the CRA will be checking to ensure revenue loss. Small businesses can compare revenues in April, May and June of 2020 to that of the same month of 2019. They can also use an average of their revenues earned in January and February of 2020. If these figures do not justify a revenue loss of at least 75%, the credit will need to be paid back to the CRA.

 

What will CMHC be looking for?

CECRA for small businesses loans will be forgiven if the property owner complies with all applicable program terms and conditions including to not seek to recover rent abatement amounts after the program is over.

 

Administering the Program

CMHC will administer the program on behalf of the Government of Canada, provincial and territorial partners.

 

The program offers assistance for the months of April, May and June, 2020.

  • It can be applied retroactively.
  • Property owners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months.
  • Property owners must refund amounts paid by the small business tenant for the period.

 

If rent has been collected at the time of approval, a credit to the tenant for a future month’s rent (i.e. July for April) is acceptable if agreed upon by both the property owner and the tenant. This can be a flexible 3-month period.

 

The deadline to apply is August 31, 2020.

 

Program Summary Details

CMHC will provide forgivable loans to eligible commercial property owners.

  • The loans will cover 50% of the gross rent owed by impacted small business tenants during the 3-month period of April, May and June 2020.
  • The property owner will be responsible for no less than half of the remaining 50% of the gross rent payments (paying no less than 25% of the total).
  • The small business tenant will be responsible for no more than half of the remaining 50% of the gross rent payments (paying no more than 25% of the total).

 

 

Owing Taxes to the CRA: Real options to consider

The Canadian Tax Filing deadlines for regular filers and for filers with self-employment income are rapidly approaching.

Due to the COVID-19 pandemic, the Canada Revenue Agency (CRA) has pushed out the tax filing deadline for regular tax filers from April 30th, 2020, to June 1st, 2020.  Canadians with self-employment income were due to file by June 15th, 2020, and that date has remained the same.

Any payments for the current tax year are due by September 1st, 2020, which applies to balances and instalments under Part 1 of the Income Tax Act due on or after March 18th and before September 1st, 2020.

If you earned significant self-employment income, for the first time, you might be in for an unexpected surprise when you file your tax return, because there will likely be a balance owing to the CRA. This balance owing is a result of having to pay the amounts that an employer would have normally deducted from your pay, including both portions of the Canada Pension Plan (CPP).

If you haven’t made other provisions to cover your tax debt at the end of the year, you could have a problem.

If this were not a pandemic year and the CRA was fully operational, I would warn that tax debt is serious and should be dealt with immediately.

As we are all aware, the collections staff at the CRA have considerable “power” to find and collect money that are owing to the Crown.

With the amount of government benefits being offered up this year, Canadians have been providing their banking information to the CRA in record numbers, and it is that banking information which the CRA can, and will, use to recover the taxes owing to them, likely in record time.

In effort to deter Canadians from not paying the CRA, they charge penalties and interest (which compounds daily) on your overdue taxes.

They can withhold payment of your Child Tax Credit and GST rebate. They can take money from your bank account or garnishee your wages.

If those methods do not result in full payment of taxes, the CRA will then check to see if you own real estate, as they can register a lien against your property.

When a lien is registered against your property it can prohibit you from refinancing or selling your property until the outstanding debt is paid in full.

You may also find that if you are non-compliant (not filed up to date with the CRA), you may not be able to secure mortgage financing to purchase a home, buy a cottage, get a loan, or access equity in your property.

Many Canadian banks and credit unions will not provide an unsecured loan for the payment of income tax debt and they generally cannot refinance an existing mortgage to cover the debt either. When they learn of a lien, they deem you a credit risk and are more comfortable walking away from you as a customer then take a risk lending you funds that you either cannot pay or that the CRA will end up taking.

 

What Can You Do

Normally, you would contact the CRA immediately – but these are COVID times – and the CRAès collections division is presently not taking collection actions or weighing in on payment arrangements.

Pay what you can, as much as you can.  Because paying anything less than the balance owing is going to result in interest accumulating.

There is no need to pay more to the CRA, unless you absolutely have to.

If these were normal times, you might be able to negotiate a re-payment arrangement covering 3-6 months, but the interest continues to accrue.

 

What NOT to do

This is important to note – filing for bankruptcy, or filing a consumer proposal, does not discharge a lien against your property. If you go bankrupt on your CRA debt, the lien remains and – even worse – accrues interest over time. Even after your discharge from bankruptcy, the lien remains in force, until you eventually sell your home. Transferring a tax problem for a credit problem is not always the best option.

Do not transfer any assets, or your property, to another person. That will not solve your problems, but rather cause other ones.

Removing assets from the reach of the CRA will result in the raising of a Section 160 (325), non-armsè length assessment, which takes your tax debt and makes it jointly and severally liable with the person who now owns your property.

Do not ignore it. Far too often, Canadians ignore the requirement to file and pay their taxes. This means a balance owing to the CRA continues to grow and grow. When the balance gets to be too high, people feel they have very few options, and consider bankruptcy or insolvency to be one of them. Worse that this scenario, is when one of the parties with a large tax debt falls ill, passes away, or becomes separated from the other, and now the ability to resolve the tax matter becomes that much more difficult.

 

A Better Solution

If you are a homeowner then having an experienced mortgage broker working for you can save you both time and money when seeking a solution to your CRA problem. If you simply can’t pay the full amount of your back taxes, consider refinancing your mortgage and using the equity in your home to consolidate all of your debts, including credit card debts, at a rate which might even be better than the rate you are currently paying.

Mortgage brokers have access to lenders that will allow a refinance of your existing mortgage or second mortgage options to pay off outstanding CRA debt.

If you have tax debt, or are going to be facing some tax arrears, do not worry. Contact inTAXicating and let us provide you with the truth around your tax options and help you find the best solution for you.

info@intaxicating.ca

intaxicatingtaxservices@gmail.com

 

Looking After Canadians Tax Interests During and After COVID-19

The COVID-19 pandemic has changed the way Canadians do business for now, for the immediate future and possibly forever. One thing, however, that has not changed forever, is taxation.

Yes, the government of Canada has pushed off some tax filing deadlines, paused Canada Revenue Agency (CRA) collections actions, and provided “benefit” payments to those in need (and those who don’t really need), but in the midst of this massive outlay of money, there are some key facts to keep in mind to keep you safe and secure.

1. File Your Taxes

Life will go on, businesses will slowly open, and people will get back to work. As of the writing of this post, April is coming to an end, and the June 1st Personal Income Tax (T1) filing deadline is fast approaching! While any funds owing to the CRA on those taxes are not due until after August 31st, if you are going to owe and your account is going to wind up in Collections, it’s best to start making payments as soon as you can.

Don’t wait until you’re back to what resembles a “normal” work day, to realize that you cannot file your taxes because the likely response from Taxpayer Relief is that you had plenty of time while self-isolating. Don’t take that chance. You don’t need to pay interest to the CRA for filing late. File on time!

2. Beware Direct Deposit

If you signed up for any of the federal government’s “benefit” programs, and in doing so, provided the CRA with your Direct Deposit information, then you need to ensure your tax compliance is a priority for you going forward.

By giving the CRA access to your bank account, and with the current deficit of $20 billion dollars set to double due to the benefit payments, the CRA is going to be in a hurry to recoup those funds. If you delay paying, they’ll issue a Requirement to Pay (Garnishment) and take the funds from your account.

3. Do NOT Ignore CRA

Once the pandemic is under some sort of control, and life goes back to “normal”, if you are ever contacted by the CRA’s Collections department there are two things you should not be do. 1) Do not ignore them – if you get a letter or a legitimate phone call – speak to them. 2) Do not Lie. With hundreds of accounts in their collection inventories, you are just a name or number to the CRA unless you lie to them. Then it gets personal… Tell the truth. They probably know it already anyways.

4. Pause Before Bankruptcy / Insolvency

Times are tough for everyone, but if you have debts which are tax-related, or if your inability to pay other creditors is based on a tax debt, then before exchanging your tax debt for bad credit, reach out to someone who knows how the CRA works with Canadians like you, and don’t jump into something just because advertising makes you think that this “government program” is available. There are lots of better “government programs” available which can help you without something negative happening to your credit in return.

5. Explore Resolution to Tax Debts / Compliance Issues

If you are behind on tax filing – personal or corporate – owe money to the CRA, or locked in a dispute with the CRA about amounts owing? Now is the perfect time to get filed up to date, apply for Taxpayer Relief, and get the truth about your tax liability and your chances of success. Take the time to invest in yourself and resolve your tax issues.

6. Questions? 

If you have questions, ask them in the comment section. If we can answer them, we will. If you leave a valid email and the question is specific, you’ll get an email. If the answer to your question requires more information, then you’ll be asked them, and if there is an opportunity to help you further, you’ll get the truth about what benefits you, not us, not the CRA.

Two Canadians Sentenced to Prison for Bitcoin Fraud in the US

Oregon’s Attorney General has reported that 2 Canadians – Karanjit Singh Khatkar, 23, and Jagroop Singh Khatkar, 24, residents of Surrey, British Columbia – were sentenced to 24 months in federal prison and three years’ supervised release for conspiring to commit wire fraud and money laundering in a scheme to steal bitcoin from a resident of that state.

According to the indictment, beginning in October 2017 and continuing until August 2018, the defendants used a Twitter account with the name @HitBTCAssist to trick victims into thinking they were communicating with a customer service representative from HitBTC, a Hong Kong-based online platform used to exchange virtual currency. HitBTC provides its customers with web-based “wallets” to store virtual currency and make transactions.

Using the fraudulent Twitter account, the defendants responded to the Oregon victim’s questions about withdrawing virtual currency from her HitBTC account and they convinced her to send information they could use to log on and take over her email, HitBTC and Kraken accounts. (Kraken is a U.S.-based online platform that offers services similar to HitBTC).

The defendants initiated transfers of 23.2 bitcoins from the victim’s HitBTC account to Karanjit Khatkar’s Kraken account. Karanjit in turn transferred approximately half to Jagroop’s Kraken account.

Two days after illegally accessing the victim’s account, Karanjit Khatkar bought a Mercedes-Benz with $56,598 in Canadian dollars. The Khatkars also traveled to casinos. Karanjit Khatkar gambled with tens of thousands of dollars while staying at high-end casinos in Las Vegas, Nevada.

On July 18, 2019, Karanjit Khatkar was arrested upon arrival at the McCarran International Airport in Las Vegas and later ordered detained pending trial. Jagroop Khatkar appeared voluntarily for his arraignment and change of plea on December 16, 2019.

On December 16, 2019, the Khatkars pleaded guilty to conspiring to commit wire fraud and money laundering. As mandated by their plea agreements, the Khatkars delivered a check of $142,349 as a prepayment of restitution to their victim at their change of plea hearing.

At sentencing, the Khatkars were ordered to pay an additional $42,162 to their victim for a total restitution order of $184,511.

The moral of this story is two-fold. Firstly, the government doesn’t take too kindly to people stealing crypto-currency, and secondly, before giving out sensitive information, make sure you know who you are talking to.

This case is akin to the CRA scam where Canadians are threatened with jail from the “CRA” but it can be “resolved” if bitcoins are transferred into a “CRA” wallet. That scam has entrapped way too many Canadians. The CRA doesn’t even consider crypto currency to be legal tender, rather, they treat it like a commodity meaning once it’s sold, taxes are due on the Capital gain.

Be Careful Who You Use for Tax Preparation: Ontario tax preparer sentenced to 4-years in jail

George Nkoke Nnane of Richmond Hill, Ontario, was sentenced in the Superior Court of Justice in Toronto to 4-years in jail for filing fraudulent tax returns, the CRA has reported.

A CRA investigation found that Nnane, the chief executive officer of Golden Capital Management Inc., a tax preparation business, prepared individual tax returns for the firm’s clients with false charitable donations credits, as well as fictitious business and rental losses.
The false claims enabled the firm’s clients to evade nearly $2 million in federal tax for the years 2009 to 2013, the release said.
The investigation also revealed that Golden Capital Management failed to report net income totaling about $500,000 on its corporate income tax returns for the same taxation years.
The firm failed to remit Goods and Services Tax (GST) / Harmonized Sales Tax (HST) totaling about $53,000 for the quarterly filing periods from 2009 to 2013.
Unfortunately, the view from the CRA is that each and every client of this tax preparer knew that their returns were being faked and thus are a willful accomplice to this fraud and thus will be re-assessed as a result.
Those re-assessments are likely (if not certainly) to include a 50% Gross Negligence penalty which is equal to 50% of the tax evaded, plus be accountable for the tax evaded. That is just the tip of the iceberg.
In its release, the CRA noted that taxpayers convicted of tax evasion face fines ranging from 50% to 200% of the evaded taxes and up to five years’ imprisonment.
If a taxpayer is convicted of fraud under Section 380 of the Criminal Code, an individual can face up to 14 years in jail, the release said.
For the five-year period from April 1, 2014, to March 31, 2019, the courts have convicted 25 tax preparers/promoters for tax evasion, resulting in a total of $2.5 million in fines and 38 years of jail time, the CRA said.

Bouclair Inc, its CEO and former VP charged by the CRA for Tax Evasion

The Canada Revenue Agency (CRA) is reporting that home-decor chain Bouclair Inc. its CEO, and former VP are scheduled to go to trial on tax-evasion charges in January 2021.

The CEO, Peter Goldberg, a Westmount, Quebec resident faces eight charges alleging he violated the Income Tax Act between 2009 and 2011. Bouclair Inc. is charged in the same case as their former VP, Erwin Fligel.

The charges were filed by the CRA in 2018 following an investigation where by the CRA alleges that the CEO and former VP willfully evaded payment of income taxes and made false statements when filing income tax returns for Bouclair Inc. and for Goldberg.

Fligel is charged with six charges while Bouclair has been charged with 4 charges. The charges do not specify the monetary figures involved.

During a hearing before Quebec Court Judge Jean-Jacques Gagné held at the Montreal courthouse on January 30th, 2020, both sides agreed to schedule a trial between Jan. 11-29, 2021.

In November, Bouclair Inc. announced it would file for bankruptcy as part of a plan to allow it to be acquired by a new investor group, Alston Investments Inc., which is also headed by Goldberg. At the time of the announcement the privately held company had 102 stores in Quebec, Ontario, Western and Atlantic Canada.

A liquidation order issued by a Quebec Superior Court judge on Nov. 15 indicated that Bouclair Inc. intended to close at least 29 of its stores.