Welcome to inTAXicating. This blog is written by a former CRA Employee of the Year who worked in, managed and trained CRA's Collections Department for almost 11-years. Currently, my firm provides answers, information, support and solutions for everything CRA related, including but not limited to; Collections, Enforcement, Audits, Liens, Back-Filing, Assessments, Director's Liability, s160 Assessments, Taxpayer Relief, Voluntary Disclosure, Bankruptcies, Proposals, Mortgages and diagnosing and solving the most complex of tax problems. Contact us for a free consultation! Should you need to hire us, you will find us to be Experienced, Honest and On Your Side. Email us at email@example.com, and let's begin solving your tax problems together!
If you live in Southern Ontario, you are in the middle of a heat wave. Summer came back bigger, badder, stronger than it had all summer, and with humidex readings in the low 40’s, all the talk is about cooling off and extending the cottage season.
And there is nothing wrong with it.
But as the calendar creeps towards October, we enter the last quarter of the year and this is traditionally the best time of year to finally seek resolution on that nagging Canada Revenue Agency (CRA) tax problem.
The tax problem that causes you so much stress that you cannot open the brown envelopes from the CRA.
The tax problem which resulted in the CRA freezing your bank account or garnishing your wages.
That nagging tax issue which prompted the CRA to register a lien against your property.
The one that prevents you from having a full night’s sleep.
Yes, that one.
Well worry no more because help is here.
No matter how big, or small, complex or simple, we have seen them all, and resolved them all. At the very least, after a meeting with us, you will understand the truth behind your tax problem – whether you have a chance of having it overturned or whether you actually are on the hook for the balance.
After a meeting with us, you can finally start on the pathway to resolving your tax troubles and no longer worry that when you try to use your debit card it might not work because the CRA froze your bank account and withdrew all of the funds.
I came across this article from the Montreal Gazette;
I strongly recommend that you take the time to read it. It is brief, but very informative as it tells the story that I have been trying to tell for the past 20-plus years! There is that there is a significant percentage of, not just Quebecers, but Canadians who leaving money on the table because they don’t understand the tax system, according to a report released by the C.D. Howe Institute last week.
The report — which bases many of its conclusions on a survey of 1,000 Quebecers — suggests that lack of knowledge is one of the reasons many people don’t take advantage of credits and savings vehicles, like RRSPs, which could reduce their tax burden.
“People might be missing out on benefits that they’re entitled to,” said Antoine Genest-Grégoire, a tax policy researcher at the Université de Sherbrooke and one of the authors of the report.
“It can take various forms, people can simply not know about the existence of the credit … sometimes, they know it exists but they don’t know how to use it or they find it too complicated.”
Survey participants were asked a series of questions about how the tax system works and the average score was just 55%.
It wasn’t just tax credits that left participants stumped. Respondents scored poorly on questions about progressivity — the idea that people with higher incomes pay a higher tax rate, a core principle of the Canadian income tax system.
While almost 90% of respondents knew that income tax rates differ based on how much people make, many struggled with the concept of bracketing — when different segments of an individual’s income are taxed at different rates.
“We hear a lot of people thinking that once you reach the top income brackets, you essentially pay close to 50% of your income in taxes,” Genest-Grégoire says, when in reality, it’s only the income above the cut-off for the highest tax bracket that’s taxed at the highest tax rate.
Only 26% of survey respondents were able to answer a question about that correctly.
While survey respondents generally had a good sense of whether they pay sales tax on everyday purchases, like groceries, prepared food and clothing, there were some exceptions.
For example, Quebec provincial sales tax doesn’t apply to books, a decision made to encourage literacy and support book publishers in the province. Only 21% of survey respondents knew that.
The result, Genest-Grégoire said, is that the public policy objectives of the tax exemption are unlikely to be realized.
The lack of tax literacy doesn’t just affect individuals pocketbooks, Genest-Grégoire said.
“People who don’t understand taxes tend to have lower trust in the tax system. The Canadian tax system, even though you’re obligated by law to produce a tax return, works on trust. The government doesn’t audit everyone,” he said. This lack of trust “makes tax avoidance, tax evasion more probable.”
Genest-Grégoire said the provincial and federal revenue agencies have taken steps to put more information online, but the system itself remains complex. One solution would be to make benefits that are currently provided through the tax system more accessible and for government to automatically enrol people, as is already the case with many benefits for children.
Warren Orlans, a former CRA Collections Employee turned Taxpayer Advocate has been saying for over a decade that the CRA needs to continue putting out information on the Internet, however it needs to be available in many different formats in order to be most effectively accessed by Canadians everywhere. “Not everyone learns the same way, so having a concept explained in text, showing steps, and possibly with an example and even with little videos would expose the greatest number of Canadians to the message at once.”
“Every day, I deal with Canadian taxpayers and corporations of all sizes as they try to understand and interpret the CRA. My 11-year’s experience at the CRA and 10-years outside the CRA have afforded me the ability to diagnose and resolve even the most complex of tax matters”, Orlans said.
If you need help understanding the CRA, or interpreting their letters or actions, contact the best, at inTAXicating. Email: info@inTAXicating.ca. Or call us at 416.833.1581.
Happy Canada Day, Canada. You don’t look a day over 150-years-old!
There are so many things to be thankful of this Canada Day, beginning with Tim Horton’s and hockey and ending with socialized medicine and peace. But in between there is a whole lot of taxation. Taxes you pay which go to build new arenas, which pay for medicine, which support the troops who keep us safe, and fund programs which integrates youth of all backgrounds, races, religions and income levels together in order to keep violence as low as possible.
These are the taxes we cannot avoid paying – unless we stop spending – and they are the consumption taxes (GST/HST), gas tax, liquor tax, and many more, and there are taxes on wealth, like personal income tax, as well as Corporate taxes. There are also payroll taxes and any other fee, levy or revenue tool (all taxes but given a different name).
For the most part, these taxes are unavoidable, and as Canadians we pay them knowing that money goes back into the economy and helps people.
What I do not understand, however, is why people pay more taxes than they are required to pay, or can afford to pay, and these taxes are viewed by people in the Canada Revenue Agency (CRA) as a “stupid” or “lazy” tax and what they are referring to are penalties and interest.
It is my belief that no one should pay any penalties or interest. Ever. Why give the CRA more money than they are seeking through the Income Tax Act or the Excise Tax Act.
If you work with an accountant or tax preparer, there should be no reason for late filings or late remittances, or for missing out on key deductions because that representative should know you, and the industry you work in, and be able to keep you current and free of penalties and interest.
But there are many legitimate reasons why people file late, and incur penalties and watch interest accrue on their tax accounts, and these people are then hammered by the CRA and need help, which is why I created inTAXicating. My goal here is to help you get out of the troubles that you have gotten into and by help, I mean rehabilitate you and get you current on your filings, help you reduce your balance owing, apply for taxpayer relief (fairness) if it applies to you, and get you on a remitting and reporting schedule which ensures you are never late again.
Too many firms out there have watered down the “Tax Solution” process to the point where you pay them a ton of money, they “fix” your issue and then another one pops up, all because they are experts in taking money and not experts in resolving CRA debt issues.
The best part about working with inTAXicating is having the expertise where you need it. If your problem is with collections or enforcement then you need the person who worked in that area, and trained and managed the collectors and who can tell you the CRA’s next move before they can.
Being audited? Recently assessed? Don’t understand a letter? Balance looks too high?
There is no tax situation too scary, or too difficult to figure out. Business taxes, personal taxes, GST/HST, payroll, T2’s, provincial, federal, liens, RTP’s, appeals, VDP… We’ve seen it all, handled it all, and have been successful with it all.
Just because it’s July 1st and summertime doesn’t mean the CRA stops working too. In fact, it’s the opposite. With more time on their hands, the CRA’s collections staff have the time to thoroughly research tax files which have balances on them to see what they can do to ge the account paid in full.
My experience working in the CRA for almost 11-years, tells me that the majority of in depth investigations occurs during the summer months.
Make summertime the best time to resolve that nagging tax problem.
If you have a tax problem, we have a tax solution.
In their annual report, the Fraser Institute, a Vancouver-based think-tank added up all forms of taxation — from income and sales taxes, to more hidden costs such as gasoline taxes, carbon taxes, tobacco and alcohol taxes, municipal property taxes, payroll taxes and even CPP and EI premiums — to come up with a figure for the overall tax burden for Canadian families, and this year, they have determined that the average Canadian family with two or more people will earn $108,674 and pay 43.4% in taxes.
Based on the Fraser Institute math, 100% of income earned thus far in 2017 has been gobbled up by government in taxes, and only now are you working for yourself until the end of the year.
Last year, in 2016, it came a day earlier, on June 8th and because of variances in all types of taxes in different provinces, Tax Freedom Day differs across the country, ranging from May 21st in Alberta to June 25th in Newfoundland and Labrador.
One of the reasons for the extra day is to account for the fact that Canadians’ tax bill has risen, on average, by $1,126 this year, according to the Fraser Institute. Of that increase, $542, came from higher income taxes, but sales taxes (up $311) and other energy-related taxes (up $204) also took a bigger bite while liquor, tobacco, amusement, and other excise taxes, payroll and health taxes, and import duties all decreased.
The Ottawa-based Broadbent Institute, however, disputes the math behind the annual Fraser Institute report, because the Fraser Institutes uses “average” tax rates instead of median tax rates.
To come up with its “average” tax rates, the Fraser Institute simply adds up the amount of cash income earned by a taxpayer, and then divides that by the number of people. It then takes “outliers” and excludes those extremes from the calculations.
The Broadbent Institute said that skews the numbers in a certain way, and a better way than the average would be to use the median — the exact mid-point between the top and bottom and the rationale behind this surrounds the fact that the average income of Canada will always be higher than the median because of the small number of very high-income earners in Canada, which skews the average income amount higher.
Adding up only federal and provincial income taxes, the “average” Canadian in prime working years (between 25 – 54 years of age) earned $62,600 last year, and paid $12,000 in taxes, or around 19%, according to tax filings. Using the Broadbent method of calculation, the median for that group earned $50,500 last year and paid $7,000, or 14%, in income taxes.
Another main difference is that the figures used by Fraser Institute report doesn’t just include income taxes. It tabulates all sorts of fees that taxpayers don’t directly pay, such as payroll taxes and resource royalties that companies pay when they extract things like oil, minerals and timber.
It also only considers what it calls “cash income” on the other side of the ledger. That excludes employee benefits, investment income from pension plans and other forms of cash income.
The Fraser report also takes into consideration indirect costs like payroll taxes and other taxes which businesses pay in their calculations because even though businesses pay these taxes directly, the cost of business taxation is passed on to Canadians.
So now that we’re working for ourselves, let’s push all levels of government to treat our tax dollars more wisely, and let’s earn as much as possible (while continuing to pay our taxes on time!)
The following are tips to keep the CRA’s collections department happy.
This list in not fully inclusive of everything that you can do because you cannot send them gifts, they have to reject or toss them, and if you do their work for them – they might like that for a bit – until there are no more accounts, and then they will have no more work to do, and then no job.
So here are a few tips to keep CRA happy…
Communicate, communicate, communicate. If they have to contact you, they’re already angry.
Don’t be a jerk on the phone to them. Everything you say goes into a permanent diary and that diary is summarized semi-annually. You don’t want anyone who accesses your account to think you’re a jerk
Don’t accuse them of being out to get you… They likely have 400-500 accounts and their goal is to collect some, write some off and let the others pay or go bankrupt. Just show them some progress on any of those fronts and you’ll be in much better standing.
Ask for the best and lowest settlement offer. The CRA does NOT do that unless it is through insolvency or a formal proposal in bankruptcy. The IRS settles debts, but this is not the IRS… The CRA is WAY better!
If you enter into a payment arrangement, ensure there are sufficient funds in the account to pay the cheques. If a cheque is returned NSF (not sufficient funds), then the CRA collections officer will take immediate collection actions and getting those Requirements to Pay removed can be next to impossible.
Keep current!!! Whether during the period of a payment arrangement, or just through discussions with the CRA make sure you are up-to-date on all filings and payments (including GST/HST, income tax, payroll taxes, etc). If you fail to remain current, the CRA can – and likely will – end the payment arrangement and pressure you for more.
Understand that the CRA is not your bank, and treat them that way. At a bank, you are earning credit, but at the CRA, in collections, you are paying 10% interest compounding daily… It’s not in your best interest to take your time re-paying them.
If you have nothing to hide (and even if you do have something to hide), be honest with the CRA collections officer. Things you say may cause the CRA collections officer to become concerned.
Provide the information that is requested by the CRA collections officer. If the CRA collections officer trusts you, he/she will be more likely to exercise discretion before pressing confirm on that Requirement To Pay.
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 firstname.lastname@example.org, 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.
On November 27th, 2015, the Canada Revenue Agency (CRA) issued notice that Nicolet, Quebec resident and tax protester named Christian Lachapelle was sentenced to four years in prison by a Court in Quebec. Lachapelle plead guilty October 22nd, 2014 to charges related to tax fraud.
A Canada Revenue Agency (CRA) investigation revealed that, between June 2007 and November 2010, Mr. Lachapelle advised and enabled 93 individuals to avoid, or try to avoid, paying nearly $2 million in income tax for the 2003 to 2010 tax years.
The scheme used by Mr. Lachapelle consisted of helping or advising individuals to file income tax returns or request a reassessment using the distinction between a “natural” person and a “legal” person.
For some reason, tax protesters continue to attempt this avenue to avoid having to pay taxes and in doing so regularly convince others that this technique can be used when Canadian courts have repeatedly and consistently rejected such arguments.
This is not the first time that Mr. Lachapelle has had issues with the CRA and the law. He was sentenced to 30 days in jail in 2012 for failing to file his income tax returns despite a court order, as well as fines of $7,000 in 2005 and $14,000 in 2011 for the same reasons.
All case-specific information above was obtained from the court records.
The Canada Revenue Agency warns the public to beware of people who assert that Canadians do not have to pay tax on the income they earn. Canadian courts have repeatedly and consistently rejected arguments made in these tax protester schemes. For those involved in such schemes, the CRA will reassess income tax and interest, and charge penalties – usually Gross Negligence Penalties too which can represent at minimum 50% of the tax being evaded.
More information on tax protester schemes can be found on the CRA website, here: www.cra.gc.ca/alert.
If you have ever made a tax mistake or omission, you have the ability to correct this error through the Canada Revenue Agency’s Voluntary Disclosures Program (VDP).
You must make the full and complete disclosure before you become aware that the CRA is taking action against you, and if accepted, you may only have to pay the taxes owing plus interest (not penalties).
inTAXicating Tax Services exists to provide clarity and solutions for CRA questions and problems. If you think you have done something wrong, and the CRA might want to assess / re-assess / audit you or your company, you should check with us first.