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.

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November 14, 2014 National Philanthropy Day in Canada: Highlighting Tax Breaks for Charitable Donations

November 14th, 2014 is National Philanthropy Day here in Canada, and the Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, was in Vancouver to applaud those Canadians who donate to charities and to remind Canadians to take advantage of the tax credits available for eligible charitable donations.

Receiving special attention was the new temporary donor super tax credit which provides an extra 25% federal tax credit on top of the original charitable donation tax credit which means that eligible first-time donors can get a 40% federal tax credit for monetary donations of $200 or less, and a 54% federal tax credit for the portion of donations that are over $200 up to a maximum of $1,000.

The donor super credit applies to donations made after March 20, 2013, and can only be claimed once between 2013 and 2017.

This is in addition to the provincial credits available.donation

Those who have donated before can still be eligible for the charitable donation tax credit, a non-refundable tax credit which allows taxpayers to claim eligible amounts of gifts to a limit of 75% of their net income.

For a quick estimate of your charitable tax credit for the current tax year, try the charitable donation tax credit calculator, which can be found here.

Minister Findlay also reminded Canadians that only Canadian registered charities and other qualified donees can issue official donation tax receipts.  This is extremely important because if you make a donation to a charity which is not eligible to issue donation tax receipts but they provide one anyways, the CRA will re-assess you for that donation deduction with penalties and interest.  A little due diligence up front goes a very long way.

If it seems too good to be true, it should give you reason for concern…

To find out if an organization is registered, go to the Canada Revenue Agency’s (CRA) website and search their complete list of registered charities in their Charities Listings.

For more information about donating, such as how to calculate and claim the charitable tax credit, go to the CRA’s site for making donations, which is here.

 

Some Quick Facts

  • Two years ago, Canada became the first country in the world to officially recognize November 15 as National Philanthropy Day.
  • There are more than 85,000 registered charities in Canada.
  • The benefit to charities of being a registered charity? Registration provides charities with exemption from income tax.
  • According to Statistics Canada, in 2010 almost half of all Canadians volunteered, giving more than two billion hours of their time. In addition, in 2012, 5.6 million tax filers reported charitable donations for a total of $8.3 billion in donations reported.
  • According to Statistics Canada, in 2012 the average age of charitable donors across the provinces and territories is 53 years old.
  • Follow the CRA on Twitter – @CanRevAgency
  • Follow inTAXicating on Twitter @intaxicating

 

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

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

Time flies!

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

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

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

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

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

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

 

The Elevator Pitch! How Important Is It?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

#x-taxer

Others make promises.  I fix problems.

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

#inTAXicating

Free consultation.

info@intaxicating.ca

416.833.1581

 

 

 

Unfortunately… Business is Booming!

Business is booming!

BOOM

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

inTAXicating

http://www.intaxicating.ca

416.833.1581

info@intaxicating.ca

@intaxicating

http://www.facebook.com/intaxicating

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Toronto-based but Canada-wide!

Congratulations to inTAXicating for finishing 2nd in the 2013 Canadian Blog Awards!

I recently received word that this blog, inTAXicating, finished 2nd in the Legal / Professional category of the Canadian Blog Awards.2013 Canadian Blog Awards

The Canadian Blog Awards is an annual event on the Canadian Blogosphere in which Canadian Bloggers and Blog Readers vote to decide which blog is the best – either overall or within a category.

This year (2013), the Canadian Blog Awards are being operated by Jonathan Kleiman, a Toronto Small Claims Court Lawyer and Toronto Business Lawyer.

The first Canadian Blog Awards were held in 2004, by Robert McClelland of MyBlahg.  He hosted the awards for 2005 and 2006 before handing them over to a coalition of bloggers and business owners keen on recognizing Canadian blogging talent.

Aside from being thrilled at the nomination, I am excited and content with the 2nd place finish because it means that not only is there plenty of room for improvement, but that people understand that in order to help themselves save taxes, or fix tax troubles, they need to read online to see what the experts are recommending.

With the CRA moving more and more online in everything they do, it only makes sense that you, the taxpayer, keeps up to speed as well, or at the very least, read and learn from people who were on the inside… For a long time… And who grew up in that space, trained the staff in that space and led staff in that space.

Thank you for voting for this blog and for dropping by for tips, suggestions and recommendations on how to best handle your tax questions or tax problems.

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Make sure to visit http://www.intaxicating.ca but what you really want to do, is contact us at info@intaxicating.ca or by phone at 416.833.1581 to have your questions answered or to have your tax problems solved.

#x-taxer

The Biggest Taxation No-No’s. EVER!

Canada Revenue Agency
Canada Revenue Agency (Photo credit: John Bristowe)

Working in the Canada Revenue Agency for almost 11-years, I learned a thing or two about how the CRA operates as well as what is a red flag for them and what the CRA often let’s slide.  It helps when I negotiate with them that I know their policies, procedures and how to navigate their systems as well as they do, or even better.  I’ve used this knowledge to help my clients save millions of dollars of taxes.

With that in mind, I want to help you save unnecessary expenses, so I decided to reveal the 8 Biggest Taxation No-No’s EVER.

8.  Try and do it yourself.  Taxation is a complicated topic for many and if you don’t live and breathe tax then you should consider either hiring someone to help you along or at the very least hire someone to set you up correctly and who will take the time to learn about you and your business so that you are getting all of the tax deductions and credits available to you all the time.

7.  Think that you are above taxation.   Everyone pays taxes no matter their income level; whether it be income tax, payroll tax, or consumption tax.  To think that there is a magic “Pay no tax” card is a huge mistake and the CRA does not take “detaxers” or the underground economy lightly..

6.  Brag about not paying taxes / scamming the government.  Our tax system here in Canada is a self-assessing system with the government’s responsibility being the checks and balances.  It’s not that they don’t trust you but… They don’t trust you, which is why they have huge departments responsible for catching the tax cheats.  If the government doesn’t get you, your ego might;

5.  Post information online about yourself or your business and think that the government will not see it and use it against you.   The “government” are a bunch of people like you and I who are trying to make a living.  If you claim you are suffering from financial hardship yet post pictures on Facebook showing yourself living it up, or if you claim to be Canadian and your profile states that you are born in the US, the collectors or auditors will find it and us it against you.

4.  File late, miss installment payments or fail to make remittances.  All this will do is add penalties and interest onto your tax account and there are very few excuses the government will accept to have them reversed or cancelled.   Many large tax debts start in just this way.

3.  Carry a balance.  If at all possible it is critical to make sure that you do not carry a balance with the CRA.  With interest being charged at a floating rate of just over 10%, compounding daily, your balance can grow at a shocking rate.  The CRA is not a bank and you should not think it’s okay to treat their debt as a bank loan.

2.  Don’t be afraid to search online for your tax advice.  Not only has the CRA moved to strengthen their online presence but there are a lot of professionals online who have posted their experiences with the CRA and steps they took to resolve tax problems for themselves and their clients.  Anyone suggestion otherwise is doing so to avoid you from finding out there are other – better – tax solution providers in Canada.

1.  Thinking that anyone can help you.  This is the absolute biggest tax no-no I have encountered in 17-years of taxation.  If you have an electrical problem at home, do you call a plumber?  Would you ask a dentist to perform open-heart surgery?  How about asking a former auditor to help you with a collections problem, or an appeals officer to help you correct your payroll nanny account issues?  How about going to an Insolvency firm to have a lien removed from you house which was placed there by CRA collections?

It doesn’t make sense but don’t get me wrong.  If you have created a tax crime, such as tax evasion,  you will need a tax lawyer, and if you need tax returns prepared, they need to be done by an accountant, and a former CRA auditor is the right solution if you have a difficult, complex corporate tax audit underway,

In taxation it is critical that you have experience on your side when you work to resolve your tax issues and understanding the way the CRA operates is more important than you could imagine.

Tax debts begin with audit or compliance issues.

Then they go to collections.

Collections leads to enforcement – garnishments, requirements to pay (RTP), liens, seizures, director’s liability, and much more.

You need experienced former collections staff to help you, and with almost 11-years of progressive collections experience in all areas, from collector to resource officer, to team leader, believe me when I say that experience helps!

When your representative knows more than the collector, or trained that collector, you know you have the best representation possible.

To leave your $250,000 tax liability to anyone else would keep me up at night too.