Back from vacation and catching up! How we can help – details included.

Just wanted to drop a quick note to all of you who called, emailed and hit me up on the blog or on social media that we’re back to work and trying to get to everyone as soon as possible.

If anyone has an urgent matter, please send an email to info@intaxicating.ca, in the subject line, please write “urgent” and that will be the top priority.

For new readers of this blog or who are seeing this blog through our website, here is what you need to know!

inTAXicating is a Canadian tax consulting business which provides solutions to Canadian Tax problems predominantly related to the Canada Revenue Agency (CRA), but not limited to the CRA.

With over 20-years experience in Canadian Tax (throw in some IRS tax, FATCA, Revenu Quebec, Cross-border matters and WSIB) combined with over 10-years working in the CRA in their collections division, you have the experience and expertise that no-one else can boast to have.

Our model is simple! Give you the truth based on the facts.

You get a free consultation and if it is determined that you can handle it best, or if your questions are quickly answered, then you are on your way.

If there are more complex matters which may eventually require greater expertise, then you have the option to handle you tax matters up to that point and then hand it over, or you may wish to hand it over right away…

It’s your taxes and you need to know what is being done and how to properly handle them going forward.

There are no magical cures for tax problems which took years and years to grow, so if anyone promises you a magic bullet, proceed with caution.

inTAXicating also believes that everyone who earns money needs to pay their taxes, however, they should pay what they owe, and in circumstances where there is no ability to pay, the government should understand that and give you a break.

No questions are bad questions.

I do not believe in the “natural person” being exempt from taxes because the CRA does not believe it, but I have spoken to many, many “de-taxers” and enjoy the conversations and helping them through the CRA’s prosecutions.

We specialize in all matters relating to CRA collections, specifically Directors Liability, Taxpayers Relief, s160 assessments, liens, and garnishments, RTP’s.

We provide audit representation, accounting (through a CA), as well as presenting the options to solve all tax matters including the ugliest and most complex tax matters. The messier the better!

In short, we want to help.

15 minute Consultation / responding to questions via email – free
Meeting – $250 plus HST (one hour meeting – detailed summary and recommended plan of action included)
Engagement – either hourly @ $250/hour or a fixed fee depending on the complexity and amount of work involved.
Accounting – best rates possible also related to the amount of work involved.

We try to stick to this model as best as humanly possible because it’s your money and you work hard for it, so you should not have to throw it away.

info@intaxicating.ca

Director’s Liability Overview, Plus A Due Diligence Defense We Are Unlikely To See Used Again

Director’s Liability Overview, Plus A Due Diligence Defense We Are Unlikely To See Used Again.

 

Great view of the way the Canada Revenue Agency handled Director’s Liability Assessments from a former CRA resource officer who was responsible for these assessments for 2-years.

Ever wondered what a holding company is for the purposes of taxation? Wonder no longer! Read on…

A holding company is a company whose sole purpose is to hold shares in another company.  It does not produce goods or perform services.  

If a holding company owns a majority of shares in that company, it becomes the parent company.

The reasons for establishing holding companies are diverse;

They may be created to operate for a short period of time or as part of a long-term plan. Factors to consider include the nature and revenue of the business, the jurisdiction in which the business owner resides, and the business owner’s long term goals.

Advantages:  Minimizing risks and exposure, a holding company can protect an owner’s interests by keeping creditors at a distance while removing cash from an exposed operating company to a holding company on a tax-free basis.  

In this scenario, owners can take risks through the operating company while limiting the risk to that company and not exposing the holding company because the holding company performs no transactions and therefore does not move cash and other assets around.  The holding company is exposed to risk to the extent of its investment in the operating company.  So if a holding company lends money to the operating company, it can secure the debt and become a secured creditor (A secured creditor is a creditor with the benefit of a security interest over some or all of the assets of the debtor) of the holding company giving the holding company priority when it is time for the debt to be repaid (especially in bankruptcy).

Tax Benefits:  Corporate – Depending on the percentage of outstanding shares held by the holding company in the operating company, the dividends paid to the holding company may be tax-free.  Individual – For shareholders with a high marginal tax rate, a portion of tax on dividends from taxable Canadian companies may be deferred until dividends are paid by the holding company to the shareholders.  You may be able to locate the holding company in a province with a lower corporate tax rate. 

Estate Planning:  Holding Companies may help with succession planning by facilitating the transfer of wealth to the next generation.  Shares in an operating company can be transferred to younger family members through a holding company by way of an estate freeze, structured to cap a person’s tax liability upon his or her death and transfer any future growth to family members.

Disadvantages:  Set-up costs.  Holding companies require additional set-up costs and these expenses can be ongoing, including the cost of preparing annual financial statements and corporate tax returns.  If the number of shares is significant, then this is not so much of a concern. 

No tax benefits or negative tax implications.  As losses realized in a corporation are only available to offset other income earned by the corporation.  Holding companies are also not eligible for the $750,000.00 capital gains deduction. 

Double taxation may exist if personal tax is required to be paid as well as corporate taxes levied on the income earned by the holding company.  To avoid the negative tax consequences associated with the payment of funds from a holding company to a shareholder, include the repayment of shareholder loans and taxable dividends (which may result in a refund of corporate tax to the holding company).

Director’s Liability:  Many moons ago when I worked for the CRA, I came across many holding companies set up in order to protect directors from being responsible for unremitted source deductions, unremitted HST (PST and GST)corporate taxes and they also used passive directors  – usually not involved in day-to-day operations of the business – but they are all still liabile for any debts incurred by the corporation.  Passive directors should of course be aware of what the corporation is doing and should ensure that they are providing due diligence or have director’s liability insurance in place to protect them.