CRA Press Release: Tax preparer extradited to Canada (from Italy) for tax fraud in Canada

The following news items was released by the Canada Revenue Agency (CRA) on September 8, 2015, regarding a former Tax preparer from Vaughan, Ontario, who was convicted of Tax Fraud for adding fictitious deductions to 4,200 tax returns from 2003 – 2005.  She was sentenced to 10-years in jail and fined almost $700,000.

The news release read:

“The Canada Revenue Agency (CRA) announced today that Ms. Doreen Tennina was extradited to Canada from Italy on September 4, 2015, and is now in custody serving a 10-year sentence for tax fraud.

On May 31, 2013, Ms. Tennina was found guilty in the Superior Court of Justice in Oshawa, Ontario, on two counts of fraud over $5,000 under the Criminal Code and was sentenced in absentia to the maximum period of 10 years in jail on each count to be served concurrently.  A news release publicizing Ms. Tennina’s conviction and sentence was issued on June 4, 2013.

Ms. Tennina, a former Vaughan, Ontario tax preparer, fraudulently claimed carrying charges and charitable donations totaling $58,500,000 in 4,200 tax returns prepared on behalf of her clients from 2003 to 2005, inclusive. The false claims reduced the amount of federal taxes owed by over $10 million. She was also ordered to pay a fine of $699,608 for causing her company, Executive Accounting, to fail to report income received from the tax evasion scheme.

The preceding information was obtained from the court records.

Taxpayers who claim false expenses, credits or rebates from the government are subject to serious consequences. They are liable not only for corrections to their tax returns and payment of the full amount of tax owing, but also to penalties and interest. In addition, if convicted of tax evasion, the court may impose jail time and fine them up to 200% of the tax evaded.”

Remember, taxpayers who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs if the CRA has not contacted them first for the returns.  If applicable, the Voluntary Disclosure Program (VDP) allows for filing / amended filing without penalty or prosecution provided the disclosure is full and complete.  These taxpayers may only have to pay the taxes owing, plus interest.

More information on the Voluntary Disclosures Program (VDP) can be found on the CRA’s website at www.cra.gc.ca/voluntarydisclosures.

A link to the news release is below;

inTAXicating Helpful Tax Tip: Hold Your Change!

Have you ever walked into a store, paid for something with cash, then dumped some of your change into one of the donation tins / boxes which are situated on the counter?

It feels good to give some change to those in need.biz name official

If, however, you are someone who often donates in this manner, I think you should stop doing that immediately, and here is why:

When you drop your change into those donation bins, the money goes to the charity advertised, that we know for certain, but did you know that institution that has the tins, usually turns over that money to the charity and in turn, they receive a donation receipt which reduces their tax payable.

You are MUCH better off holding on to your change and then making a donation online to a registered Canadian Charity (The CRA provides a list of registered charities you might want to bookmark, here) and claiming the tax receipt for yourself.

It might seem like an insignificant adjustment to make, however, every dollar counts and it’s better to have the money in your pocket than in someone else’s!

Plus, the receipts add up over time, and before you know it. you can have a considerable amount of credits built up to use to reduce an amount owing or increase a refund.

Do you have to report a donation in the year you receive a receipt?

The CRA says, No.

You can carry forward donations you do not claim in the current year and claim them on your return for any of the next five years. But, you can only claim donations once. Also, you have to claim donations you carried forward from a previous year before you claim donations made in the current year. For donations of ecologically sensitive land made after February 10, 2014, the carry-forward period is ten years.

inTAXicating Tax Services is a full-service Canadian Tax Solutions company which can help you with and Tax needs you have ranging from Accounting, Bookkeeping, Audits, Assessments, and we specialize in Collections and helping you understand where you stand with the CRA in an open and honest manner.  We value your hard earned money as much as you do, and we don’t want to see you throwing it away unnecessarily.

Visit us at http://www.intaxicating.ca, or find us on Facebook, Twitter, or for tax tips, come to our blog at http://www.intaxicating.wordpress.com.

If you want to see what sets us apart from everyone else, check out our LinkedIn account and that of our Director, Warren Orlans, and see what real CRA experience can do to help alleviate your fears and concerns.

Canada Revenue Agency (CRA) Auditor Convicted of Corruption

CRA LogoI came across a news article this morning that a Canada Revenue Agency (CRA) auditor from Montreal was convicted on Friday June 12th on charges of corruption for attempting to extort $90,000 from a restaurant owner in lieu of a $600,000 audit assessment.

Upon seeing the article, I went to see if I knew any of the people involved, which I did not, and it brought back my memory of the only time I was offered a bribe while working at the CRA, which I obviously declined.

I was the Resource and Complex Case Officer in a Collections unit here in Toronto and one of my accounts involved a gentleman who had a habit of opening and closing companies over a 27-year period.

He would never file, the auditors would assess his balance, he would bankrupt the company and the next day he would open a new one. He even used the same bank, but would open and close accounts over-and-over again.

It was quite funny given that he denied everything, even his $1 / year income but with a $5-million dollar house all paid off, it took me one phone call to put everything together.

He was a nice guy… Honestly. His house was built by him and his kids, on land his father bought 45-years ago, and the assessments the CRA were charging him with – prompting him to bankrupt the companies – was not even related to the business he was in.

He didn’t know why they were assessing him. He was afraid the CRA was going to put him in jail.

The CRA thought he was a criminal and kept on top of him.

One giant misunderstanding, which was quickly resolved after I taught him how to file HST returns.

But when I first met him and presented him with a list of companies that he had opened and closed year-after-year, he said this to me;

“I’m connected to the mob.”

I said to him, “Okay. That’s not my business. What is my business is finding out why you keep doing this and what the CRA can do to help you.”

He said, “If you can make this balance go away, I’ll give you Toronto Maple Leaf tickets.”

After I stopped laughing, I said to him, “Are you kidding me? I’m a huge hockey fan, and I love the Leafs, but if I were to even consider a bribe that would result in me losing my job, going to jail, and not being able to see my children, it would have to be for a hell of a lot more than Leafs tickets, and to be honest, if you have THAT much cash, you’re better off paying your debts and never falling behind on filing or paying again.”

He replied; “I was just kidding.”

I said, “Of course you were.”

I mentioned it to my Manager who, after reviewing the file, suggested I run this by the Special Investigations unit. I spoke to SI and they knew of this gentleman and that he has been suggesting his ties over the years in hopes of having the CRA back off, and only when I explained the reasoning behind the debt did the SI manager mention that he was told this many years ago but didn’t believe it to be true.

I wonder what happened to that guy…

I hope he stayed compliant!

Back to this case.

This case relates to an auditor named Francesco Fazio who, in 2005, was auditing a restaurant named “La Belle Place.” and after completing the audit, told owner Stamatis Argiroudis that he would owe $600,000 in taxes based on Fazio’s estimate of unreported revenue, according to a Montreal Gazette report.

According to testimony from the trial, Fazio told the owner that a more favourable estimate could be made for $90,000.

The owner refused to pay the money and probably words were spoken and the file was transferred to another CRA auditor. The auditor said the owner mentioned connections to organized crime, however the judge presiding over the case did not believe this to be true and ruled against the auditor.

In this day and again of recording devices in our phones and the CRA snitch line, it’s important to be careful what you say, and to whom you say it. Same goes for using social media. Be careful what you say about people and businesses when it’s not true.

I hope the CRA conducts an investigation into all the companies that this audit has audited to see if there is a recurring pattern or if this was a once-off situation.

Not All Tax Information Found on the Internet is true! Are you shocked?!?

Did you know that not all the tax information and suggestions you find on the Internet are true?

Of course you knew that!

I’ve joked with everyone from my children, to family, friends, employers, employees and even director’s and CEO’s of huge organizations that tax information “must be true!  It’s on the Internet”, no matter how absurd it might appear to be.

We all know, or should know to take everything we read with a grain of salt… and that fact-checking is critical when trying to decide if information is legitimate, completely made up, or aimed to scare you.

Sources

As we scroll through pages and pages of information, reading about situations and stories about how the Canada Revenue Agency (CRA) administers tax law here in Canada it is easy to lose sight of goal, which is to get a better understanding of what is acceptable and what is not regarding so many aspects of taxation.  The best indicator of how close to the truth an article is can be determined by the sources cited in that piece.

An article about the CRA with a link to the CRA website (which backs up the facts) is the best indicator that the author knows their stuff.

If, however, you come across an article which has no references, no supporting links to the originating source, or links from a website titled something like “I_want_to_stop_the_CRA.org” then you can be assured the information is not going to be accurate, it is not going to help you, and more likely it was written to scare you, or present a horror story to get you to contact them to help you.

Don’t waste your time on those… Ever!

When a prominent tax lawyer wanted everyone to stop looking for solutions on the Internet it was presented that the CRA could find out you have a tax problem by sneaking into your house, taking your computer, breaking in to it, and seeing that you have been looking for tax help online.

GASP.

Well, guess what?

If the CRA has to come and seize your computer, they already know you have a tax problem!  They cannot seize your computer unless it’s part of a criminal investigation.

The true intention of these ads is not to warn you about a new power that the CRA has secretly acquired, but rather this firm doesn’t want you seeing that there are options available for you online to fix the problem yourself.  So they scare you away from the Internet so you won’t find helpful tips and solutions at firms like this one, inTAXicating.

Better to hire them then get advice from a real former CRA Collection employee to help get you back on track.

In a capitalistic marketplace I don’t blame them, but I am concerned.  Tax is confusing, especially when a tax problem suddenly arises and the CRA is pressuring you to fix it quickly in one of their 3 ways:

1) Pay it

2) File up-to-date and watch the balance go away, or,

3) Go bankrupt.

How can you be expected to make that sudden choice which has significant short and long-term implications on you, your business, your family and your life, without having the facts, all the facts, and not just the facts the CRA wants you to have, or that you believe they are telling you.

That’s where I come in, specifically, this blog, this business and this business model.

I want you to know the truth.

I want you to be able to make an informed decision whether that decision is made via information found on this blog, or on my website, or through an email to me.  I want you to be able to understand the CRA and their collection, enforcement, audit, filing process and administrative process as well as I do.

I want you to understand the corporate culture there and that very infrequently is there an agent on the other side of the phone with your picture on a dart board in their cubicle.

I want you to know your options, your best next steps and that your long-term plan of action will not only help you resolve your tax situation but also keep you and the CRA happy.

I want you to know that in situations where I feel that you cannot do this alone, that I can help you, and will help you, make matters right, and I want you to know that a tax problem does not occur overnight and resolving them can take a long-time.

I have the knowledge and understanding that no-one else can claim to possess about the CRA collections policies and process and I don’t say that to boast, but rather to inform.  I don’t profess to have an “army” of “real” CRA staff with me, nor do I pretend that background is in any area other than where it shows on my web-site, blog, and on my LinkedIn profile.  Collections, collection, collections.

I’m also not going top pretend that a background in Appeals or Audit is going to help you better than a back ground in Collections.  To each their own.

I write my blog posts myself and where possible I cite everything I can to the CRA website so that you can be comfortable knowing that information you read on my social media platforms are sourced from the people who want you to pay your taxes and question your deductions and filing deadlines.

I don’t write my posts in order to scare anyone or to force them to use my services, because quite frankly, I want everyone to be able to navigate the Canadian tax system without ever having problems and running afoul of the CRA and in a perfect world, one day I’ll be able to provide a users guide to the CRA to allow people to file, re-file and pay without incurring penalties and / or interest and where the CRA understands why people can’t, won’t or are unable to do so and then have the CRA deal with them in an understanding manner.

But for now, we have to take it one day at a time, and one situation at a time.

The best day to start fixing tax problems is today.  There are always solutions and there are always options.  In deciding what you want to do, you need to make sure you are getting the right information and from the right sources.  Be wary of what you read on the Internet because it can make you want to close your blinds, change you name and hide from the CRA when all they want you to do is to close an account or file a nil return.

Get the facts!

inTAXicating Tax Services offers a free 15-minute consultation to determine how to best proceed with a tax situation.

From there if’s decided that a written plan of action is needed, I can produce one for you.

If from that, a decision is made to engage inTAXicating to represent you in your dealings with the CRA, then we determine if the hourly or fixed plan works best for you.

You don’t have to worry about opening those brown envelopes.  Help is here!

http://www.intaxicating.ca

http://www.intaxicating.wordpress.com

info@intaxicating.ca

Should you pay your children to do chores?

This is such a great topic, and one in which I have spent a lot of time discussing with my wife over the years.  Last week, I was interviewed by the Globe and Mail on this very topic and the article can be found here:

http://www.theglobeandmail.com/life/parenting/should-you-pay-your-kids-to-do-chores/article23076370/

I have included the article below, so please have a read of the pro-side and the con-side and let me know your thoughts.  I’m curious as to what other families do regarding money, specifically teaching children about the value of money.

The article:

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The phrase “the value of a dollar” is misleading. The truth is, there are so many values contained in a buck it’s hard to count them all. It’s these values we are trying to impart when we give kids an allowance – that money has to be earned, that not every desire can be instantly gratified, that it’s important to give to those in need. Perhaps the biggest point of contention is whether to pay kids to do chores. Dan Lieber argues against it in his new book, The Opposite of Spoiled. Parents don’t get paid for housework, so neither should children, according to Lieber. But a strong case can be made for the other side of the debate as well. We asked parents on each end of the debate to explain their allowance philosophy.

NOT TIED TO CHORES

Kids should do chores to help the household and learn to take care of themselves, not to pocket cash. “Let’s fast-forward to when your child goes to college. Is he going to want to be paid to take out the trash and keep his room neat?” says Kristan Leatherman, co-author of Millionaire Babies or Bankrupt Brats.

Lori McGrath, Vancouver-based blogger of The Write Mama

Kid’s age 6

Allowance $3 per week: $2 goes into his wallet, $1 goes into a piggy bank.

The lesson “I want him to learn how to be independent with money. I want him to feel empowered about it, and to learn how to make good decisions about money.”

Why it’s not tied to chores “He does have chores, but [the allowance] is just to teach him financial responsibility. We don’t want it to be an emotional thing – ‘You’re being a good boy, here’s money.’ We want it to teach him about making his own decisions and saving for things.”

Warren Orlans, Toronto-based tax consultant @ inTAXicating and blogger @UrbanDaddyBlog

Kids’ ages 10, 8, 5

Allowance $5, $4, $2 per week, respectively.

The lesson “The value of money. Money is not something you throw away, but it’s not the be-all, end-all. You can do without money. You don’t have to buy everything you see. But if you see something you want, you can save up and purchase it.”

Why it’s not tied to chores “The kids have to do chores as part of being members of the household. … I’m a big sports fan, and there’s nothing worse than having a player on your team who’s only in it for the contract.” But if Orlans has to clean up after the kids after two warnings, he makes them buy back the items, whether socks or comic books, from their allowance.

Denise Schipani Huntington, NewYork-based author

Kids’ ages 12 and 10

Allowance $12 and $10 per month, respectively.

The lesson “That money has worth. And it has consequences.”

Why it’s not tied to chores “The very idea of that turns me off completely. None of us [in the family] pay each other for doing what needs doing. But they get an allowance so that they can decide what they want to do with money. We presented it more as a way to help them understand how money works.”

TIED TO CHORES

Paying kids to do chores teaches them about working for what they want. “Having the feeling that the money comes from your effort appears to be related to the notion that money doesn’t grow on trees, and that you’re not entitled to any money,” says Lewis Mandell, an economist and financial literacy educator.

Tibetha Kemble, Edmonton-based consultant in First Nations relations

Kid’s age 6

Allowance $10 after a full slate of chores is completed, usually every two weeks.

The lesson “That there is a direct connection between doing work and getting something for it … and that things are expensive and if you save up your allowance you can afford to buy it – that it’s not just about immediate gratification.”

Why it’s tied to chores “It was really the only way that we could tie money to something without it seeming arbitrary or punitive or behaviour-related.”

Jen Kern, Toronto-based events and business development director

Kids’ ages 6, 3

Allowance No allowance for the three-year-old. Older son has a chore chart with various amounts (25 cents for making his bed, for example) with a weekly maximum of $7. His parents match whatever he saves.

The lesson “That money isn’t free … linking savings to that was really important. Neither my husband nor I were ever taught that, and as result we were really crappy with money for a lot of our late-teens, early 20s. We’re trying to explain to him that if he puts his money away, it will be there when he needs it. He’s saved $85 already.”

Why it’s tied to chores “There was going to be no free ride.”

 

Danielle Riddel, Calgary-based real estate assistant

Kid’s age 14

Allowance $70 per month ($10 has to go into savings)

The lesson “Nowadays I feel like kids get money all the time for everything. I want her to learn that you can’t have everything as soon as you want it. You have to work for it. You have to save for it.”

Why it’s tied to chores “She doesn’t get allowance for cleaning her room or taking care of the dog. She gets it for doing all the floors in the house and cleaning three bathrooms. I wanted her to have money because I want her to learn to spend and how to save money, but I didn’t want to just give it to her.”

Thoughts?

Comments?

Think the Canada Revenue Agency Treats Employees Differently? Think Again!

Former CRA employee fined and sentenced to 18-month conditional sentence for income tax evasion

Surrey, British Columbia.   The Canada Revenue Agency (CRA) announced today that Maria Victoria Banhaw of Burnaby, British Columbia, was sentenced on October 3, 2014 in Vancouver Provincial Court, after pleading guilty to one count of income tax evasion. Banhaw was fined $47,580, representing 75% of the total federal income tax evaded. She was also ordered to serve an 18-month conditional sentence, which includes 9 months of house arrest.

A CRA investigation determined that Banhaw, while employed at the CRA, prepared and filed personal income tax returns for herself, her husband and 34 family members and friends for the 2005 to 2009 tax years. On these 96 returns, Banhaw overstated the amount of Registered Retirement Savings Plan (RRSP) contributions in order to reduce taxable income and increase refund amounts payable. Banhaw’s family and friends were unaware that she made false claims on their returns. In total, Banhaw reported $389,417 in false RRSP contributions, resulting in $63,438 in taxes evaded.

The preceding information was obtained from the court records.

When taxpayers are convicted of income tax evasion, in addition to any fines, they must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA.  In addition, the court has the ability to fine them up to 200% of the taxes evaded and impose a jail term of up to five years.

If you have ever made a tax mistake or omission it is prudent to speak to us right away so that we can help you understand where you stand in the eyes of the CRA.  We will help you determine if you can handle it on your own – and set you up to do so, or recommend our services or the services of others to assist you through the process.

Here is What is NEW for the 2014 Canadian Tax Filing Season

  • Children’s fitness amount – Under proposed changes, the maximum amount of eligible fees for each child has increased to $1,000.
  • Search and rescue volunteer amount – As a search and rescue volunteer, you may be able to claim an amount of $3,000.
  • Family Tax Cut – A proposed non-refundable tax credit of up to $2,000 is available to eligible couples with children under the age of 18, and is effective starting with the 2014 tax year.
  • Universal Child Care Benefit (UCCB) – Under proposed changes, this benefit is being increased for children under age six. Effective January 1, 2015, parents will be eligible for a benefit of $160 per month for each eligible child under the age of six – up from $100 per month. Under proposed changes to expand the UCCB, parents may also receive a benefit of $60 per month for eligible children ages six through 17. Payments of the additional amount and expanded amount will start in July of 2015.
  • Emergency services volunteers – Rules for the $1,000 exemption for emergency services have changed.
  • Adoption expenses – The maximum amount of eligible expenses for each child has been increased to $15,000.
  • Medical expenses – Amounts paid as salary for designing of personalized therapy plans for persons eligible to claim the disability tax credit and costs for service animals used to help manage severe diabetes, are now eligible as medical expenses.
  • Investment tax credit – Eligibility for the mineral exploration tax credit has been extended to flow-through share agreements entered into before April 2015.
  • GST/HST credit – You no longer have to apply for the goods and services tax/harmonized sales tax (GST/HST) credit. When you file your return, the Canada Revenue Agency (CRA) will determine your eligibility and will advise those who are eligible to receive the credit.  If you have a spouse or common-law partner, only one of you can receive the credit. The credit will be paid to the person whose return is assessed first. The amount will be the same, regardless of who (in the couple) receives it.
  • Online mail – When you register for online mail, you’ll have instant access to your tax records anytime, anywhere. Choose to receive an email notification that your notice of assessment or reassessment is available online. You can register for this service, which begins February 2015 by either adding your email address on your T1 return, or by registering directly at www.cra.gc.ca/myaccount.
  • Mobile application: In February 2015, the CRA will be launching a mobile app for individual taxpayers.

CRA online services make filing easier and getting your refund faster

The CRA’s online services are fast, easy, and secure. You can use them to file your income tax and benefit return, make a payment, track your refund, receive your notice of assessment, and more, which is great for keeping on top of your taxes and especially should there be an issue.

The only concern I have, surrounds the notice that the Government of Canada is switching to direct deposit for all payments that it issues? This includes your tax refund and benefit payments. They would like you to sign up for direct deposit.  More information is available here: www.cra.gc.ca/getready.  However, by providing the CRA with a bank source for direct deposit, also means that they have a source for collection purposes should you run into tax trouble and have a balance with the CRA.

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