Guest Post Thursday: Knowledge First Financial

Knowledge First Financial urges parents to apply for BCTESG

1 in 5 BC children have received the $1,200 education grant

Approximately 80% of eligible children have yet to receive the $1,200 British Columbia Education Savings Grant. Knowledge First Financial, a Canadian RESP Provider, is urging parents to apply now and enjoy all the benefits of an RESP including compound, tax-free growth and the Canada Education Savings Grant (CESG) of up to $7,200. That means up to $8,400 of ‘free’ money for each child to help pay for post-secondary education for BC parents.

More than ever, post-secondary students have more freedom to choose programs and schools, more time to focus on studies and explore new opportunities, less stress and less debt thanks to the savings accrued from RESPs. Knowledge First Financial supports students in their post-secondary studies – in fact, when the BCTESG was introduced in 2015, Knowledge First Financial was one of the first RESP providers to support it.

If you’re the parent of a child born in BC in 2006 or later, here are three things to know about BCTESG:

 

What is BCTESG?

The British Columbia Training and Education Savings Grant is a $1,200 grant for post-secondary education established in 2015. To be eligible, parents or guardians and children must be residents of BC, and possess a Social Insurance Number.

How do I apply?

Firstly, you will need a RESP from a provider who can access the BCTESG – a sales representative from Knowledge Financial First can help set this up for you. You will be asked for proof of residency, such as a driver’s license, BCID card, BC Service Cards or a recent utility bill upon application.

When do I apply?

You can apply for BCTESG as soon as your child turns six up until the day before your child’s ninth birthday, however Knowledge First Financial recommends that parents apply as soon as possible. Deadlines for children born before August 15, 2009 are slightly different:

  • Children born in 2006: Apply between August 15, 2016 and August 14, 2019
  • Children born in 2007, 2008, before August 15, 2009: Apply between August 15, 2015 and August 14, 2018

 

Source: http://www.esdc.gc.ca/en/reports/resp_promoters/infocapsules/bc.page

 

Why apply now?

You’ll receive the education grants sooner and your savings will have more time to grow.   Learn more about why an RESP is a smart way to invest in a child’s future by setting up an appointment with a Knowledge First Financial sales representative today.

 

About Knowledge First Financial Inc.

Knowledge First Financial Inc. is a wholly owned subsidiary of the Knowledge First Foundation and is the investment fund manager, administrator and distributor of the education savings plans offered by Knowledge First Foundation. For more information about education savings plans from Knowledge First Financial Inc., please visit knowledgefirstfinancial.ca or refer to our prospectus.

As of April 30, 2016, Knowledge First Financial manages $3.62 billion in assets on behalf of more than 250,000 customers.

Knowledge First Financial® is a registered trademark of Knowledge First Financial Inc.

This post was written by Daryl Shriver, and he can be found through his Twitter account.

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What is an IRS Form, W8BEN?

What is a W8BEN?

The W8BEN, or Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) is a form which, when completed, is provided to the US income provider (Not the IRS!) in order to prevent 30% of your earnings being withheld and remitted to the IRS.

The W8BEN claims the treaty rate between Canada and the US which means you cannot be taxed by both countries on the same income, and by completing this form, you are certifying the following information to the IRS;

  • I am the individual that is the beneficial owner (or am authorized to sign for the individual that is the beneficial owner) of all the income to which this form relates or am using this form to document myself as an individual that is an owner or account holder of a foreign financial institution,
  • The person named on line 1 of this form is not a U.S. person
  • The income to which this form relates is:
    • (a) not effectively connected with the conduct of a trade or business in the United States,
    • (b) effectively connected but is not subject to tax under an applicable income tax treaty, or
    • (c) the partner’s share of a partnership’s effectively connected income,
  • The person named on line 1 of this form is a resident of the treaty country (in this case, Canada) listed on line 9 of the form (if any) within the meaning of the income tax treaty between the United States and that country, and
  • For broker transactions or barter exchanges, the beneficial owner is an exempt foreign person as defined in the instructions. Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income of which I am the beneficial owner or any withholding agent that can disburse or make payments of the income of which I am the beneficial owner.
  • I agree that I will submit a new form within 30 days if any certification made on this form becomes incorrect (changes).

In a nutshell, you’re telling the IRS, you are NOT a US person, that you do not work in the US and that you will report your income to the CRA.

Otherwise, they keep 30% of it.

 

CRA Tax Auditors Target Condo Sellers in Hunt for Flippers – Nothing New!

Clarity around this issue is important instead of fear-mongering and hiding key facts!

inTAXicating

We, at inTAXicating, came across an article this morning in the Toronto Star newspaper entitled; “Tax Auditors Target Condo Sellers in Hunt for Flippers“, and immediately read through looking for something new or developing in the Canada Revenue Agency (CRA) battle to tax those who should be taxed on taxable transactions.

But there was nothing new here.  While the article does, however, get a very important message across in a somewhat alarming and shocking manner probably meant to draw the attention of those who have no interest in taxation – the truth speaks for itself.

Capital Gains tax or proof, please. Capital Gains tax or proof, please.

CRA auditors have always been looking at condo sellers and house sellers to determine who are flipping these properties for profit,  If they are, then they have to pay a capital gains tax on the profit they make during the flip.  If they hide it and are…

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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