Canadians Must Hold Governments Accountable For Their Spending of Tax Revenue

The average Canadian family’s largest expense is taxes.

Therefore it should not be unreasonable that Canadians expect all levels of government to not waste their tax dollars, money taken off their paychecks and paid into the system.

Whether tax dollars are wasted when a government pays a negotiation bonus to unions, or if they have to pay private companies a fine after breaking contracts with them, governments must do a better job at keeping the optics above-board and avoid $200,000 moving expenses or $1300 a person dinners altogether!

But they don’t, or they can’t, and we, as Canadians have come to expect that from our elected officials.

If governments want to spend fast and loose with money, let it be their own, or at the very least taxes off of non-Canadians – like withholding taxes, or something of the like.

But if we, as Canadians do not hold these governments accountable for their spending of our taxes, we allow them to continue to do this and they will continue to do so.

If we held our elected officials to a higher standard and used the opportunity to remove governments who wasted taxpayer dollars immediately, it would send a message to the next government that they have to spend wisely.

This information came out in the late summer months from the Fraser Institute, an economic think-tank.

To clarify, when referring to taxes, its not just income taxes, but all the taxes Canadian Taxpayers make to all levels of governments (federal, provincial, and local), including both visible and hidden taxes— everything from income taxes, which are less than a third of the total, to payroll taxes, sales taxes, property taxes, health taxes, fuel taxes, vehicle taxes, import taxes, alcohol taxes, and much more.

In a recent report published by the Fraser Institute, they tracked the total tax bill of the average Canadian family from 1961 to 2014.

For 2014, they estimated that the average Canadian family (including unattached Canadians) earned $79,010 in income and paid $33,272 in total taxes—or 42.1% of income—while just 36.6% went to food, clothing, and shelter combined.

Indeed, Canadian families spend more on taxes than the basic necessities of life.

But it wasn’t always this way.

Back in 1961, the first year the Fraser Institute started tracking this data, the average Canadian family paid a much smaller portion of its household income in taxes (33.5%) while spending proportionately more on the basic necessities (56.5%).

Since 1961, Canadians’ total tax bills have increased by 1,886%, dwarfing increases in shelter costs (1,366%), clothing (819%), and food (561%). Even after accounting for inflation (the change in overall prices), the tax bill shot up 149.2% over the period.

And now taxes eat up more income than any other single family expense.

So why should Canadians care, aside from the fact that we work really hard to earn an income, and pay these taxes?

With more money going to the government, families have less to spend on things of their own choosing, whether it’s a new car, technological gadget, or family vacation. They also have less money available to save for retirement and their children’s education, or to pay down household debt.

While there’s no doubt that taxes help fund important government services, the issue is the amount of taxes that governments use compared to what we get in return.

To make an informed assessment, you must have a complete understanding of all the taxes you pay. Unfortunately, it’s not so straightforward because the different levels of government levy such a wide range of taxes—with many taxes buried in consumer prices and hard to discern.

Armed with this knowledge, we can hold our governments more accountable for the resources they extract and continue a public debate about the overall tax burden, the amount and scope of government spending, and whether we’re getting our money’s worth.

Otherwise, taxes will continue to increase.

So why is this important to us?

It is important because we understand that taxation is a necessity in order to have a healthy, wealthy, productive society for everyone, and in paying taxes there are circumstances which arise that make the system disadvantages to some Canadians.

Unlike our neighbours to the south who shoot elected officials for spending money, we are much more in control of our emotions (plus, no guns, eh?) so we need to hold them accountable in different ways, such as, not re-electing them. and going to public debates, and letting the officials that we elect know that they can no longer waste our money!

We can fix this.

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The Truth and Myths Around the CRA’s Taxpayer Relief Program

There is quite a lot of information on the Internet around the Canada Revenue Agency’s (CRA) Taxpayer Relief Program (formerly known as fairness).  Understandably, there is also a lot of misinformation around this program.  After having spent almost 11 years working in the CRA – beginning as an entry-level collector and working my way up through the division to a team leader before taking my MBA and heading into the private sector –  I have learned quite a lot about how the Taxpayer Relief program actually works.Myth vs Reality

This post will identify the key objectives of the program straight from the CRA, and then highlights some common myths about the program and the actual fact about why it makes sense to invest considerable time and effort into an application, or engage the services of someone who knows the program inside and out.

The Taxpayer Relief program was set up to allow for the Minister of National Revenue to grant relief from penalty and/or interest when the following types of situations prevent a taxpayer (individual or corporation) from meeting their tax obligations:

  • Extraordinary circumstances;
  • Actions of the Canada Revenue Agency (CRA);
  • Inability to pay or financial hardship;
  • Other circumstances

The program distinguishes between “cancelling” and “waiving” of penalties and/or interest as the CRA understands that granting relief to a taxpayer only to see them smothering in penalties and interest again is an exercise in futility.

The term “cancel” refers to a penalty or interest amount that is assessed or charged for which relief is granted, in whole or in part, by the CRA.

The term “waive” refers to a penalty or interest amount that is not yet assessed or charged for which relief is granted, in whole or in part, by the CRA.

The term “Taxpayer” includes individual, employer or payer, corporation, partnership, organization, trust, estate, goods and services tax/harmonized sales tax (GST/HST) registrant or claimant.

Now, you or your client, has been charged penalties and / or interest and you want to know if you qualify.  Look no further than the CRA website, and their section on Taxpayer Relief, here.

Circumstances that may warrant relief include;

Extraordinary circumstances

Penalties or interest may be cancelled or waived in whole or in part when they result from circumstances beyond a taxpayer’s control.  Extraordinary circumstances that may have prevented a taxpayer from making a payment when due, filing a return on time, or otherwise complying with a tax obligation include, but are not limited to, the following examples:

  • Natural or human-made disasters, such as a flood or fire;
  • Civil disturbances or disruptions in services, such as a postal strike;
  • Serious illness or accident; and
  • Serious emotional or mental distress, such as death in the immediate family.

Actions of the CRA

The CRA may also cancel or waive penalties or interest when they result primarily from CRA actions, including:

  • Processing delays that result in taxpayers not being informed, within a reasonable time, that an amount was owing;
  • Errors in CRA material which led a taxpayer to file a return or make a payment based on incorrect information;
  • Incorrect information provided to a taxpayer by the CRA (usually in writing);
  • Errors in processing;
  • Delays in providing information, resulting in taxpayers not being able to meet their tax obligations in a timely manner; and
  • Undue delays in resolving an objection or an appeal, or in completing an audit.

Inability to pay or financial hardship

The CRA may, in circumstances where there is a confirmed inability to pay amounts owing, consider waiving or cancelling interest in whole or in part to enable taxpayers to pay their account. For example, this could occur when:

  • A collection has been suspended because of an inability to pay caused by the loss of employment and the taxpayer is experiencing financial hardship;
  • A taxpayer is unable to conclude a payment arrangement because the interest charges represent a significant portion of the payments; or
  • Payment of the accumulated interest would cause a prolonged inability to provide basic necessities (financial hardship) such as food, medical help, transportation, or shelter; consideration may be given to cancelling all or part of the total accumulated interest.

Consideration would not generally be given to cancelling a penalty based on an inability to pay or financial hardship unless an extraordinary circumstance prevented compliance, or an exceptional situation existed. For example, when a business is experiencing extreme financial difficulty and enforcement of such penalties would jeopardize the continuity of its operations, the jobs of the employees, and the welfare of the community as a whole, consideration may be given to providing relief of the penalties.

Other circumstances

The CRA may also grant relief if a taxpayer’s circumstances do not fall within the situations described above.

The CRA expects these guidelines to be used when applying for relief and that the requests are made within the deadlines for requesting relief, which is limited to any period that ended within 10 years before the calendar year in which a request is submitted or an income tax return is filed.   The 10-year limitation period rolls forward every January 1st.

If filed using the correct form, with sufficient supporting documentation, a response from the Taxpayer Relief Program can take anywhere from 3 months to 2 years due to the amount of requests.  In order to ensure that you are making the best claim possible, you really should engage the services of a professional, as they would be able to assess whether or not your request is sufficient, and they would ensure that you meet all the other conditions which must be in place for the CRA to review and consider your application.

At the end of the day, if you have a reasonable chance of being successful under this program, the investment made to have it written, reviewed or monitored by an expert is a worthwhile expenditure.

Now let’s have a look at some common myths around this program which are floating around the Internet.

Myths

Myth: That the CRA’s Taxpayer Relief program is a one time program and that you had better take your best shot the time you decide to apply.

Reality: Not true,  This program is available to all Canadians who have been charged penalties and / or interest and as such, they have the right to ask for relief each and every time it is warranted.  The Taxpayer Relief Group do not maintain collection inventories and as such they review each case on the merit of its submission without any influence from the permanent collections diary or the collector assigned to the case.

Myth: That the CRA’s Taxpayer Relief Program is used in order for the CRA and a taxpayer to negotiate a deal which would resolve the taxpayer’s debt issue by settling the debt and accepting less than the actual amount owed to them.

Reality: Never, ever, ever!  The CRA does NOT settle debts outside of bankruptcy or a proposal, and they certainly do not use the taxpayer relief program for this purpose.  As a matter of fact, I can speak of a first hand experience where a collector used the word “settle” in the permanent collection diary of a corporation which had paid a principle tax debt of $650,000, because they wanted to fight the $775,000 in penalties and interest through Taxpayer Relief.  The CRA sent back the $650,000 and re-opened negotiation with the corporation because they did not want to set the precedent of settling tax debts through the Taxpayer Relief Program.

Myth: I cannot afford to pay my taxes, so I am not going to file my tax return, and then when I have a debt, I can ask for relief because I had no money?

Reality:  Failure to file a tax return is a criminal offence which can result in prosecution, so you should always file, and be clear to the CRA upfront that money is tight.  But before an application is made to the Taxpayer Relief Program, all outstanding returns must be filed up to date, and all installments must be accounted for.  Otherwise, the application is set aside until everything is current.

Myth: Having a disability or illness from birth qualifies me for Taxpayer Relief.

Reality: Probably not.  If you have managed to conduct your affairs for a period of time without any tax issues, but then something happens which cases the accumulation of penalties and interest, you cannot use your disability or illness when applying for relief, unless something happened during the period in which the penalties and / or interest were applied as a result of a worsening of your disability / illness.  In that case, you would need to substantiate this with supporting letters from your doctors and specialists.  

Myth:  I met with someone who is going to write a letter to the CRA asking for relief and they have sent me the letter to review.  If I sign it, and they send it off, am I now being considered for relief?

Reality:  Not any more.   Years ago, taxpayers were able to send in letters to the fairness department which contained their reasons for asking for relief and some would include supporting documentation, while others would not.  However, since the CRA revamped the Taxpayer Relief Program, they require that the form RC4288 be included in the package or the claim will be rejected.

Myth:  I need to be pre-qualified for the CRA Taxpayer Relief Program.

Reality: No.  You can determine if you may qualify, or you can seek a professional to help you determine if you have grounds for relief, but there is no pre-qualification of this program.

Myth: If my claim is rejected, then I have to pay the penalties and interest.

Reality:  You should make arrangements to pay the penalties and interest in any case in order to stop the interest clock from ticking should the claim be denied – wherever possible, however, the Taxpayer Relief Program allows for a second-level review to be performed (usually with additional information provided) and there is an option for judicial review should the second level review be unfavourable.

 

So take some time to look around when you are considering an application under the Taxpayer Relief Program and make sure that if you engage someone you do so for the right reasons.

Tax Debt, Tax Arrears, Taxes Owing to the Canada Revenue Agency (CRA). Call it what you want, but it is ruining your life!

Do you have tax debt to the Canada Revenue Agency (CRA)?  Tax arrears causes stress each and every day on you, your business and your family? Even if you are in an arrangement with the CRA, they can change their mind on a moments notice and want more.  Knowing that the CRA can take all your money, or close your business at any time for your Tax Debt cannot help you sleep at night…

Everybody has answers for you which best suits themselves or their business.

We have a solution that best suits you and your business.

It’s called the Debt Diagnosis, and it’s a service we provide that no other tax solution / tax resolution / tax negotiator can provide.

Our Debt Diagnosis Program looks at the specifics of your CRA debt, your other debts, your current compliance situation, your assets, liabilities, ability to pay, and a whole bunch of other factors and we provide you with your options, suggestions and recommendations regarding how to proceed with your CRA debt(s).

We’ll advise you about options – options you know about already, like the CRA’s Taxpayer Relief Program, and the CRA’s Voluntary Disclosures Program – and we will tell you about options you don’t know about, and you won’t find in writing, because the CRA doesn’t want you to know about them.

As a former CRA Collections Senior Officer – who spent almost 11-years collecting primarily business taxes – GST/HST, Payroll, Corporate Tax, and Personal tax – and managing CRA Collections staff – I understand Director’s Liability, Non-Arms Length Assessments, Write-Off’s, Payment Arrangements, Taxpayer Relief, and everything else to do with collections better than anyone!

I created the Write-Off checklist that many CRA office’s use to write off their accounts.

I have resolved files that the CRA never thought they would collect on, while I was working at the CRA, and working outside the CRA.

Knowing the ins and outs of the CRA’s Collections division helps you!

Remember this: Getting in to Tax Debt takes time. Getting out of Tax Debt also takes time!

If someone is offering you a quick solution, then they are trying to get you into Bankruptcy, or filing a Consumer Proposal.  Insolvency firms are creating “tax” centres to “help” you with your tax debts.  They offer prompt resolution of CRA Collection actions, such as; Requirements to Pay and Wage Garnishments because if you go bankrupt the CRA cannot collect their debts… Most of the time.

Learn what options you have, which are specific to your Tax Debt / Tax Compliance matters.

The CRA has options available for Taxpayers who cannot pay their debts.

Use those, instead of trading Tax Debt for Credit Problems.

Talk to us at inTAXicating!

Find us @ http://www.inTAXicating.ca

Email us at info@intaxicating.ca

Learn the plan to take control of your Tax Debt, and all your other tax-related / debt-related issues and get moving in the right direction today.

There is no need to run to a trustee.

Or spend thousands and thousands of dollars to a firm who is going to promise solutions – tell you the CRA won’t budge on their position – and then tell you that the best option is to go bankrupt.

Get started on resolving your tax debt(s) today.  The CRA still works in the summer!

http://www.inTAXicating.ca

 

Frequently Asked Tax Question Answered: How do I know if what I read about Tax Debt to the CRA is true?

This is one of the most commonly asked questions of me: How do I know if what I read on the Internet regarding debt to the Canada Revenue Agency (CRA) is true or not?

The answer is quite clear, however, complicated at the same time.

If you owe money to the CRA and you are looking for options, suggestions, or tips on the Internet, you have to pay special attention to the “Solution” options which are advertised as if they are providing legitimate advice.

The most important thing to do is to take note of the terminology used in these ads – over and over again – because the intention of these ads and blog posts are not to help you but to achieve a high SEO (search engine optimization) ranking.  These posts are written to capitalize on the number of eyes who will read that post because of the way it was written, not because it was intended to provide help to you.

Here is an example of a fear mongering ad, disguised as an article on taxes, meant to “help” you.  I am paraphrasing the content, but the example should provide a clear clue as to the true intention of the poster.

Title: Understanding Canada Revenue Agency (CRA) Tax Assessment & Arbitrary Assessments

The sample post: CRA tax assessment is when the Canada Revenue Agency conducts a review of your income taxes. The most common form of CRA tax assessment is the Notice of Assessment that is sent once the CRA has conducted a preliminary review of your tax return. There is another CRA assessment known as “arbitrary assessments.”   These assessments are also known as “notational assessments.” What this means is that, if you have not filed your taxes on time, the CRA could decide to complete and file your return for you.

Many people believe that, if you do not file your taxes, that the CRA will wait until you do file your taxes and then the CRA will penalize you by changing you penalties, fines, and interest.

This is not always true.

The CRA is able to choose to complete an arbitrary assessment in which the Canada Revenue Agency will estimate your income and the tax debt that you owe and then the CRA will charge interest on this debt as required.

The amount of tax debt that comes from a CRA arbitrary assessment will  not be as favourable to you as it would be if you completed your return yourself.

The CRA will use previous income tax statements to complete your return and will not take steps to include expenses or deductions or attempt to give you any tax breaks.

In many cases, the amount owing listed by the CRA will be very high and additional charges, penalties and interest will be charged since the assessment was late.

You will then be subject to CRA collection efforts such as a wage garnishment of up to 100% of your income, or the CRA will empty your bank account and then freeze it so you cannot use it.  They could also put a lien on your house and if you don’t pay them, sell it and keep the proceeds.

What do you do if you Receive a Notational Assessment?

If you receive an arbitrary CRA tax assessment, your options are;

  1. Pay the amount listed
  2. File an appeal of the assessment.
  3. You can also choose to file a return yourself at this point in an attempt to reduce your tax bill, but, this will trigger a CRA audit to ensure that your tax return is filed correctly.

In addition, if the CRA does not have the information it needs in order to complete an arbitrary assessment, it can take you to court where the court can order that you complete the return and pay a court fine.

If you ignore this court order, you could be subject to contempt of court charges and go to jail.

As you can see, your best option is to contact us, and we will help solve this problem.  We have an army of former CRA staff at our disposal who deal with hundreds of these daily.

Let us help keep you out of jail and away from the prying eyes of the CRA.

 

WHEW.

After reading this, if you were not afraid of the CRA, you must be by now.  This blog post started out trying to get people looking for CRA tax solutions and slowly wound its way through a series of lies and mis-truths and took the reader straight to audit and jail.  It just stopped short of proclaiming that King Tax Man was going to descend from the clouds and throw tennis sized hail-balls at you.

This type of article is not good.  It’s not accurate, heck, some of it is not even true.  But how would you know?

What are the red flags that you should notice?

Let’s break down this article and address some of the “facts”.

First paragraph – mentions of CRA, or Canada Revenue Agency – 5 times.  This is their SEO target, clearly.

I was also alarmed that the writer was unable (or unwilling) to state what a Notice of Assessment (NOA) is, and how the CRA actually issues them.  To set the record straight, a Notice of Assessment is the computer generated form which is issued once a change occurs on someone’s tax account.  This NOA carries with it a legal warning from which the CRA are able to take collections actions.

An additional lie occurred when the author stated that your tax return is looked over once it is filed.  In truth, no one has reviewed your tax return.  The data entry group take the paper-filed returns and just enter the information in the system.  Electronically filed tax returns are run through a program aimed at identifying any obvious errors or inaccurate deductions taken.

There is the idd case where the CRA will flag and wait for your tax return, however try not filing for 20-years and being under audit regularly, and then you can get to that level.

Canada’s tax system is a self-reporting system so the information is accepted as filed, and the Audit, or Verification department are responsible for checking the information to make sure it is correct after the fact.

Another HUGE issue, is that there is a significant difference between an arbitrary assessment and a notional assessment.

Arbitrary assessments are issued for personal (T1) taxes and occur when the CRA’s non-filer group, or a CRA collector takes information on your personal tax account for that current year, plus previous years and prepare the unfiled tax return for you, less deductions.

In many cases, they are pretty accurate.

A notional assessment is specific to GST/HST and in these cases the non-filer unit or the collections unit will assess an amount owing for each period outstanding based on a suggested amount the system provides.  That suggested amount is a combination of the previous filings, and the industry or SIC code that is associated to your file.

In both cases, returns can be filed and the assessments removed, however, Notices of Objection should be attached just to provide recourse should the filings not be accepted.

Filing the missing returns does not trigger an audit.

The whole piece about the CRA taking you to court, etc., makes absolutely no sense as it’s not even true.  Arbs and Notionals are based on information in the CRA’s systems.  If the CRA doesn’t have information, they can still raise an assessment.

I suspect the writer was just trying to close out the reasons for using them by tieing in the jail / court fine, for not complying.  It’s not true at all, but it makes for a compelling story!

If the intention of the article was to really assist Taxpayers and let each and every Canadian decide if they want to pay for assistance / expertise, then all they had to do was discuss prosecution which is what the CRA can and will do if repeated attempts to file have been issued from the CRA (Demand to File) and have not produced the returns.

Maybe they didn’t know that existed…

Maybe they were not aware that failing to file is a criminal offense, if the CRA asks for the returns and they are not provided.

Certainly, they did not want you to know that failing to pay is not.

If someone looked at the above post, they would panic, contact this firm, and likely be convinced to pay a lot of money for something they could likely do themselves because they don’t want to make it worse, or go to jail.

It’s hard to get the truth out there when there are people and firms distorting the facts in order to make a profit off of taxpayers lack of understanding of how the CRA works.

Additionally, if they intentionally muddled the facts in this post to scare you into using their services, what other information have they creatively adjusted?

Or, if they believe this to be the truth, then they just don’t have the experience or expertise to know better, and do you really want to use them to represent you in dealings with the CRA?

Outcome:

I questioned the author in an online social media forum.  I said, “I’ve always understood that an arbitrary assessment was specific to T1 returns and that they were actually quite accurate because most of the information used is already posted to your T1 account, whereas a notional assessment was specific to GST/HST and those figures were based on the industry or SIC code. Can you confirm this is your understanding as well?”

He never responded…

Surprised?

I’m not.

When you have CRA tax collections problems then you need the expertise of the firm with an actual former CRA tax collector.  inTAXicating Tax Services.

Visit us at http://www.inTAXicating.ca

Full Disclosure Alert: Know Who You Are Dealing With!!

I had the most interesting comment sent to me today, by someone who used to work at the CRA.

She noticed on my blog, and on social media, that I “claimed” to have been a “Former CRA Employee of the Year” and she, having worked at the CRA, was not familiar with the award.

She questioned my legitimacy!

I love it.

It reminded me that I had not finished updating the “About Us” section on the inTAXicating website, and in doing so, I will include the details of this honour.

I was nominated for the “Most Valuable Player” award – which was the wording they used for the Employee of the Year – by a colleague of mine in 2002.

The nomination was his acknowledgement that I went way above and beyond the scope of my employment not only professionally but personally to support my colleagues, staff and to represent the CRA in a positive manner.

This was before my MBA, and before children.

I had recently started a Mentoring Program for the Collections division at our CRA office and the program was so successful, that we began running it through the rest of the departments in our building and in other Tax Services Offices. I was also responsible for overseeing the Write Off inventory, managing a New Intake collections / compliance team, heavily into training staff and had recently taken over the Director’s Liability inventory and was in the process of cleaning that up.

Personally, I had just gotten married, had been right in the middle of taking accounting courses towards my CGA designation and was volunteering my time with a Big Brothers and Big Sisters Program here in Toronto.

I was also on the board of the Government of Canada Charitable Workplace Campaign, and in the role, I went to each and every employee in the Revenue Collections division in our office and spoke to them one-on-one about the program and their contribution.  They donated record amounts.

I had several inventories of business collections accounts, and when the office renovated floors and we had to move staff between floors, I was the coordinator.  I was also the employee who received the sensitive issues from the Director’s Office to hand, with care.

I was busy.  Could have been much busier, but certainly I was fully engaged.

I was nominated and both myself and the nominator received recognition for the honour.

I was deeply honoured and appreciative.

Then I won.

I was shocked.

I drove to Niagara Falls, accepted the award from then Commissioner of the Canada Revenue Agency Ruby Howard, and I drove back home to attend class later that evening.

The following day, the first person I met when I arrived into the building greeted me like this;

“Hey Warren. Congratulations on the award. I just don’t feel that you deserved it.”

“Thank you”, I replied to him. “Neither do I.”

“Sorry, that might have been harsh”, he said to me.

“I’d rather you speak the truth, than keep that from me” I said.

“You know what”, he said. “Maybe I just don’t know you well, enough, but time will tell.”

Just a year before this man passed away from a long battle with cancer, he said leaning over the cubicle right beside me where he sat; “You know what, Warren. I’m surprised you only won one of those things.”

That comment from one of the smartest people the CRA had ever employed, meant a lot to me.  Not many people got along with this gentleman because he was all business, all the time, but I deeply respected him and I let him know it.  He earned that respect from everyone, but few knew how to pass it along to him.

But, getting back to my “claim”…

I decided to attach the picture of my award;

Me accepting the award in Niagara Falls;

My certificate of my 10-year’s of service to the CRA;

…and a word of advice for anyone who has tax problems…

Know who you are dealing with. Understand their expertise in the field you are looking for expertise in.

What makes inTAXicating so successful is that Taxpayers, business owners and other professionals read my words, Google me, check out my LinkedIn profile and determine that I know my stuff.

Which I do.

Then they reach out.

I expect each and everyone of you to do the same.  Read some posts, Google me. Check out my LinkedIn profile and reach out for tax help, to have questions answered, to learn more about the CRA, or to help your clients so you can help them.

Email: info@intaxicating.ca

Tax Shelter Debt with the CRA? Come TONIGHT to a Meeting in Toronto

Have you participated in a Canadian Tax Shelter?

Do you owe the CRA money?

Have the promoters of the shelter taken your money and run away?

If any of these situations sound like a dilemma you are in, or going to be in, then you have a bit of time to do something about it.

The Tax Shelters they will be discussing tonight are; COIP, RLG, MLF and PGI.

If you have participated in any other tax shelter, such as GLGI, and you wish to speak with me regarding your options, please understand that the event will focus on the above 4, however, I will have time set aside after to speak with participants regarding them.

TONIGHT:

Tonight, November 21st, 2017 is your last chance this year to come and meet with tax shelter and CRA experts on the subject of their Class Defence.

Profitable Giving Canada, the leading Canadian Tax Shelter Solution provider, are especially pleased to have Mr Shy Kurtz,  LLB, BCL, the Chairman of their Legal Affairs Committee as special guest to answer questions and give an update on their Class Defence.

Don’t miss out on this important opportunity to find out how to deal with the CRA reassessments and collections.   It’s your last opportunity for quite some time to speak directly to the experts.

If you have not yet joined their Class Defence,  it is even more critical to attend.  They want to hear from you and you need our help, trust me! 
Event details:

Tuesday, November 21, 2017
7:00 PM-9:00 PM
Hampton Inn & Suites,
Register Now
If you simply cannot attend one of their 2017 final seminars,  they would be pleased to offer you a  private telephone consultation at your convenience.  Or just call them at 519 -964 – 2780

The seminar will be hosted by Mr. Jaye Torley, the President of Profitable Giving Canada.

I will be there too to answer questions on the CRA’s Collections process.

IF you wish to speak to PGC, here is their contact info:

7 Ways the Tax Man is Watching You: MoneySense.ca

When I saw this headline in Money Sense.ca I immediately felt upset that this article was going to be a bunch of made-up, fear-mongering, scare tactics along the lines of something that would come from an advertising campaign from a certain tax law / brokerage firm.

They popularized the calling of the CRA the “tax man” and since we all know the CRA hates that, its worth noting that it a confrontational relationship with the CRA is what they are all about.

Some people need that.

Most don’t.

Then, upon reading the list, I noticed that each and every one of the 7 items has a quote from… Dioguardi, and once the shock and surprise wore off, I shook my head and wanted to set the record straight, as far as I see it.

Not really...
The CRA is watching you!

The link to the original article is here;
http://www.moneysense.ca/save/taxes/cra-watching/

So let’s look at these items in a bit more depth;

1. Social media. Sure. If you make it public, and you have a unique name, the CRA can see what you’re posting. It doesn’t mean that if you have $40K in reported income and buy a $100K boat that they are going to assess you. If you are in collections and the CRA’s collections officers are trying to get you to pay, and all of a sudden a boat shows up on their radar, they will do their research and determine who owns it, how it was purchased and if it belongs to someone who owes the CRA taxes, then you have better have a good explanation as to why you didn’t disclose it.

2. Kijiji, eBay, etc. Yes, if you are selling items online as a way to earn an income it is income that you should declare and pay taxes on. The CRA have in the past requested and received information from eBay related to their top sellers. If, however, you are doing this as a business, it would have made sense to have engaged an accountant or tax professional to ensure that you are not only reporting correctly, but that you are claiming all eligible deductions and expenses – like a home office – to offset the income earned. A business is a business.

3. Credit card slips – yes, however only if it’s through an audit and the auditor has requested it directly from you. I suppose if you were under criminal investigation, or were in collections for a long time, the advanced collection techniques might include requesting this information, but the collections staff are not able to do anything with it. Auditors can assess with it. Collections cannot. Very misleading point here!

4. Bank accounts and investments – All financial institutions are required to provide year-end tax slips to taxpayers indicating their position during the year and in each and every case, a copy is sent to the CRA. They already have this information. They’re not watching anyone. The slips the bank sends is matched to the slips the taxpayer files. No slip, then the CRA asks for it (maybe you lost or forgot it) and then if it’s not accounted for, the CRA will raise an assessment.

If a taxpayer is in collections and the CRA wanted to know information about a bank or investment they have the ability to use a Request for Information, to ask for information and a Requirement for Information to ensure they get the information. Both processes are complicated and the CRA must prove that they were denied the information or that they need it urgently in order to raise an assessment.

5. This section is a bit vague and underwhelming. First, the CRA checks the sales records much faster than they did years ago – but they take that information then send out a questionnaire to the taxpayer to complete which is the supporting document they use to assess. They see you sold, but you let them know if there is cause for digging deeper.

On the rent side,, what catches the most number of people is when a renter pays rent in cash and the landlord and the landlord does not provide receipts and neither reports in… until there is an issue, and the renter declares rent paid. The CRA checks the landlord to see if they declared the rental income and when they have not… Assessment. The CRA is, again, not watching people in this case. They come across these assessments because of breakdowns in rental agreements.

6. Income and pensions. This list should have stopped at 5. This is not a case where CRA watches anyone. It’s about reporting and discrepancies.

7. Mystery diners – I’m not even going to comment on this than to say that it’s so over the top it’s unbelievable.

I will add, that while working at the CRA, I did attend restaurants as a representative of the Crown, however I disclosed my reason for being there and it was only in situations where restaurant owners had payroll debts over $300,000, and suddenly reduced their payroll from 15 full-time employees to 2 full-time employees. I just needed to check and see if they really did cut staff, or if they just started paying the other 13 cash under the table, to avoid having to deduct and remit the CPP, EI and tax. In each and every case, upon entering the restaurant, I would count the number of employees – when I saw more than 10, I would take the owner aside, explain this was not legal, then request a payroll audit and be done, until the audit assessment came into collections.

So to conclude, the most accurate part of this article is, “always give full and complete disclosure”.

The “tax man” is not watching you, unless you are in collections, under investigation, or trying to “game” the system.

If you have questions, concerns or comments, and want the truth about your situation, send us an email to info@intaxicating.,ca and we can have that discussion.