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

CRA Conviction Notice: Tax Protester Sentenced to 4-Years in Prison.

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).

More information on the CRA’s VDP can be found on the CRA’s website atwww.cra.gc.ca/voluntarydisclosures.

Additional information on CRA convictions can be found on the Media page of the CRA website at www.cra.gc.ca/convictions.

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.

http://www.intaxicating.ca

info@intaxicating.ca

Real CRA collections experience.  On your side!

If You Can’t Beat Them or Join Them, Copy Them! Tax Law Firm Copies inTAXicating Winning Tax Solution Model

Imitation is the sincerest form of flattery.

If you can’t beat ’em, join ’em.biz name official

 

If you are fighting a losing battle, find your most successful competitor and do what they do!

If you are one of the many people who have paid tens of thousands of dollars to a prominent tax lawyer because they told you a lawyer was absolutely required to save you from the “taxman,” you are going to be really disappointed to learn the firm itself no longer feels that way.

As a result of a drawn-out and very public dispute with the Law Society of Upper Canada over their retention of client retainer fees to keep them from the reach of the Canada Revenue Agency (CRA), DioGuardi Tax Law has been forced to reinvent themselves into our firm, inTAXicating, by saying when people owe tax to the Canada Revenue Agency, a lawyer is no longer the most effective choice for ending the problem.

Oops.

From their press release, Philippe DioGuardi is reported to have said “People who owe tax are vulnerable to the Canada Revenue Agency’s aggressive collection tactics. They need fast and affordable ways to fix their tax trouble before the CRA comes after them with bank and wage garnishments or liens against their home and other property.”

Something I have been saying for the past 10 years!

In an effort to possibly save their business, the press release goes on to explain that hiring lawyers for CRA collections matters is time-consuming (read: expensive for clients) and slow: “They know what I know about fighting the CRA. And because they’re not lawyers, they can work more quickly to end people’s tax debt trouble for less than a lawyer would charge. Frankly, when the trouble is that you owe tax, you don’t need the hassle of hiring a lawyer to fix it.”

Unfortunately, the aggressive negotiation tactics DioGuardi’s firm is known for and which the CRA despises are still at the centre of their campaign.  They also boast a network of resources to assist people who need help with financing, and to slide people into bankruptcy when they cannot get financing.

DioGuardi’s previous radio advertising warned Canadians against searching for Tax Solutions on the Internet (so you will not find answers or firms like inTAXicating) and against so-called Tax Solutions firms, which are really Bankruptcy firms offering to “help” you with your tax debt by plunging you into bankruptcy after drawing out your tax file to incur more fees.

So inTAXicating now has a little competition … kind of … in the field of tax solutions and assistance with CRA issues.  You can either choose 17 years of tax experience – 11 of which were spent recently working in and managing CRA collections – or you can choose a firm which used to believe only lawyers can solve tax problems, but now tells you lawyers are not needed to solve tax problems, and oh, hey, they also used to work somewhere in the CRA 25 years ago.

Once this model wears out, watch for them to morph into Tax “Brokers” so they can do the work, and get paid after the fact, all in an effort to “protect” your money from the “Tax Man”.  It’s all the same everything, just dressed up in different clothing.

For us, nothing has changed.

If you have a tax question, issue, lien, or concern with the CRA, or RST, or need help regarding an audit or Taxpayer Relief, or just want to ask a tax question, then send an email to info@intaxicating.ca and you will have your answers.  If you need to hire us, we’ll tell you.  If you can handle it yourself but need a little guidance, we will tell you.

Our reputation is as important as your reputation.

inTAXicating Tax Services.  Canada’s only Tax Solution option!

Find us on Facebook, Twitter and check out our credentials on LinkedIn.  Our blog is always at http://www.intaxicating.wordpress.com

 

2014 Canadian Tax Filing Calendar. Important Deadlines Coming Up In 2015.

I receive a lot of queries surrounding the key Canadian Tax Filing Dates and Deadlines which impacts Individuals and Businesses, so I gathered that information and while not exhaustive, it highlights key dates and deadlines for you to remember and mark on your calendar for the next couple of months.

Remember being late results in penalties and interest and penalties incurred year over year increase in percentage.  For example, a regular non-filer who became a late filer was paying a late filing penalty of 62% by his 5th year of late filing.CRA Logo

2015 Canadian Tax Dates and Deadlines for the 2014 Taxation Year.

For Individuals:

On or before April 30th, 2015 (a Thursday) is the Personal Income Tax return deadline.

Self-Employed (you or spouse/common-law partner):

If you or your spouse or common-law partner carried on a business in 2014 (other than a business whose expenditures are primarily in connection with a tax shelter), the deadline to file your 2014 income tax and benefit return is midnight on June 15th, 2015.

*** However, if you have a balance owing for 2014, you still have to pay it on or before April 30, 2015.

Deceased:

If you are the legal representative – executor, administrator, or liquidator – of the estate of an individual who died in 2014, you may have to file a return for 2014 for that individual.

Information relating to those filing requirements can be found on the CRA website; Guide T4011, Preparing Returns for Deceased Persons,

Additional information can be found here: Information Sheet RC4111, What to do following a death.

The due date for the final return will depend on the date of death and whether or not the deceased or his or her spouse or common-law partner carried on a business in 2014.

Of note, if  you received income in 2014 for a person who died in 2013 or earlier, do not file an individual return for 2014 for that income on behalf of that person.  You likely will have to file a T3 Trust Income Tax and Information Return for the estate.

RRSP Contributions:

March 2nd, 2015 is the deadline for contributing to an RRSP and to have that contribution count towards your 2014 tax year.

If you suspect you might owe taxes, making a RRSP contribution should help lessen the burden, and in some cases will turn your liability into a credit.

Employee / Nanny Filing Deadline for providing a T4:

In all instances, you have to file your T4 information return (T4’s plus T4 Summary) on or before the last day of February following the calendar year that the information return applies to.

If the due date falls on a Saturday, a Sunday, or a public holiday, your return is due the next business day, so for 2015, they are due March 2nd, 2015 as February 28th falls on a Saturday.

The CRA considers your return to be filed on time if they receive it or it is postmarked on or before the due date.  If you fail to file it on time, the CRA will likely assess a penalty.

If you have more than one payroll program account, you will have to file a separate information return for each account.

If you need to file early due to bankruptcy or if your business stops operating, you are required to file within 30 days from the date your business ends.

If the owner of a business dies, the T4 slips and T4 Summary have to be filed within 90 days from the date of death.

You must file information returns by Internet if you file more than 50 information returns (slips) for a calendar year. More information is available at the CRA website, here: Filing Information Returns Electronically (T4/T5 and other types of returns).

General filing information:

* Please keep in mind that if the deadline falls on a weekend or public holiday, for federal income tax purposes, your return is filed on time if it is received or it is postmarked on the next business day.

As well, you should note the difference in “received” dates the CRA adheres to.  The CRA considers something to have been received by a taxpayer once the CRA sends that item out to a known address they have on file.  On the other hand, the CRA does not consider your paperwork or payments as being received until the CRA actually has said cheque or return in hand and stamps it with their postmark.  Mailing something on February 28th which is due February 28th is likely going to result in a penalty for late filing.

* In cases where an individual dies, the final income tax return must generally be filed on or before the regular filing deadline for the year OR six months after the date of death of the individual – whichever is later.

* There will be no income inclusion for an operating cost benefit if an employee fully reimburses the employer for all operating expenses, including GST/HST and PST, relating to the personal use of the automobile within 45 days after the end of the calendar year.

* An employee who has received a low-interest loan from an employer during any part of the year is deemed to have received a taxable employment benefit that is calculated as interest at the CRA’s prescribed rate for the period during which the loan was outstanding. The amount of the benefit is reduced by any interest actually paid on the loan within 30 days of the end of the calendar year.

* Where a family member has loaned funds to another family member or to a family trust, the income attribution rules may not apply on the related investment income where interest on the loan is charged at a rate at least equal to the prescribed rate that was in effect when the loan was made and where interest on the loan is paid by January 30 of the following year.

* In the case of a general corporation, the due date for the balance owing for a taxation year is generally the last day of the second month following the end of the year. In addition, provided certain conditions are met, the due date for the balance owing for CCPCs is the last day of the third month following the end of the taxation year.

* Corporations are required to pay monthly tax installments during the year if their total taxes payable (which is specifically defined) for the current or preceding taxation year is more than $3,000.

* In cases where the taxation year-end of the corporation is the last day of the month, installment payments are due on or before the last day of each month or each quarter. Where the taxation year-end of the corporation does not fall on the last day of the month, the first installment is due one month or quarter less a day from the first day of the corporation’s taxation year-end. Subsequent installments are due on the same day of each of the following months or quarters.

* CCPCs may pay quarterly installments if the following conditions are met:

  • The corporation’s taxable income, and that of any associated corporations, for the current or previous year does not exceed $500,000;
  • The corporation claimed the small business deduction in computing its tax payable for the taxation year or for the preceding taxation year;
  • The corporation’s taxable capital employed in Canada, and that of any associated corporations, does not exceed $10 million in the year or in the preceding taxation year; and
  • Throughout the 12 months ending at the last installment payment date, the corporation made all tax remittances and filings under the Income Tax Act, Employment Insurance Act, Canada Pension Plan or GST/HST section of the Excise Tax Act on time.

* The due date of a GST/HST return is determined by the reporting period. If the reporting period is monthly or quarterly, the GST/HST return must be filed and any amount owing must be remitted no later than one month after the end of the reporting period. If there is an annual reporting period, the GST/HST return must be filed and any amount owing must be remitted no later than three months after the end of the fiscal year. Please note that an individual with business income for income tax purposes, who is also an annual filer with a December 31 fiscal year-end, must file their GST/HST return by June 15 and pay their net GST/HST owing by April 30 to avoid penalties and interest.

* Information returns that include T4, T4A, T4A-NR and T5 must be filed on or before the last day of February in each year and shall be in respect of the preceding calendar year.

* An NR4 Information Return must be filed on or before the last day of March or in the case of an estate or trust, no later than 90 days after the end of the estate’s or trust’s tax year. An NR4 Information Return must be filed in respect of payments such as interest, dividends, royalties or pensions made to non-residents in the preceding calendar year.

* In cases where all members of the partnership are individuals (including trusts), the T5013 is due no later than March 31 of the calendar year following the year in which the partnership’s fiscal period ended. In cases where all members of the partnership are corporations, the T5013 is due no later than five months from the end of the partnership’s fiscal period. In all other cases, the T5013 is due on or before the earlier of (i) the day that is five months after the end of the fiscal period, and (ii) the last day of March in the calendar year immediately following the calendar year in which the fiscal period ended or with which the end of the fiscal period coincides.

 

Good news if you are ready to get filing, because the 2014 General Income Tax and Benefit packages are available at post offices as of early February, and the first day you can use NETFILE was February 9th, 2015.

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

I had a nice long conversation with a client the other day regarding the potential that either the Canada Revenue Agency (CRA) or the Provincial government (in Ontario) were going to pursue a Director’s Liability assessment against him for the debts of his now-deceased corporation.  Part of the discussion surrounded how the Canada Revenue Agency and the former Ontario Retail Sales Tax (RST) group handled assessments, and the criteria they used when reviewing whether or not to pierce the corporate shield, plus the importance of a due diligence defense.

Director's Liability Section from the Income Tax Act and Excise Tax Act.
Director’s Liability Section from the Income Tax Act and Excise Tax Act.

During my employment at the Canada Revenue Agency (CRA), I felt I needed to gain a more thorough understanding of Director’s Liability and figure out why there were so few assessments raised in our office compared to other offices.   I personally had not raised any Director’s Liability assessments mainly because I was effective on the phone and combined with meetings, was able to resolve many debts prior to the assessment stage.  Still, Senior Management encourage the Collections staff to utilize this collection tool more, so as the Resource and Complex Case Officer, I asked for, and was given, the Director’s Liability inventory to control.

By controlling the Director’s Liability inventory, that meant I needed to know the ins and outs of Director’s Liability – section 227.1 of the Income Tax Act and section 323 of the Excise Tax Act, because if anyone in our office wanted to raise an assessment, I would have to review their account, ensure all of the much-needed grunt work had been completed, then ensure they had spoken to the Director(s), given them sufficient notice, provided them time for a Due Diligence Defense, at which point I could sign off and begin to track the file.

After organizing that inventory and rolling out the new procedures, I began to scour the accounts in our office for potential Director’s Liability assessments, then, in addition to my other inventories, provide recommendations and suggestions to the staff on how to proceed if I felt there was a possibility for an assessment.  Management decided instead of burdening the staff, I should just take those accounts I felt were ready for Director’s Liability assessments and work them, plus all of the other accounts I was tracking where assessments were raised too.

It was a fair amount of work, but more importantly, it was very enlightening, to review the government’s policies on Director’s Liabilities plus review the procedures in place, compare that to how other office’s handled their files and really tighten up the process.  If an account was a sure-fire Director’s Liability assessment, it was raised, and if there was no chance, or not the right time, the file was returned to active collections.

I found the first common misconception around Director’s Liability was that the issuance of the Director’s Liability Pre-Assessment Proposal Letter (which notifies director’s that we are reviewing them for Director’s Liability) was being used as just another letter by the Collections staff to remind directors of their obligations, when in fact the CRA intended on using this letter to notify Directors’ that an assessment was beginning.  Internally, the Canada Revenue Agency was actually starting to investigate the personal ability to pay of the director(s) at the time this letter was issued.

Going forward, that letter was not to be used lightly, and it was not to be sent to the Director(s) numerous times.  A Director would then have the assessment raised against them and wonder why it was raised this time, and not earlier when one of those letters went out, so in order to prevent a possible loss in Tax Court, the decision was made to send it once, and then follow-up with the Due Diligence defense letter before raising the assessment.

Ignoring the Due Diligence defense letter (which happens often) meant the one opportunity a Director had to start their case on the record was lost, and with the CRA building their case in the permanent diary, the Director(s) stood little chance of preventing the Canada Revenue Agency from raising the Director’s Liability.

Once that waiting period passes, the file usually gets very quiet…

From the Director’s point of view, either the assessment is raised and they receive a letter from the CRA stating that, or the assessment is raised and the letter gets lost in the mail (tossed out), or the assessment is raised and before the Director is notified, their personal assets come under fire.  There is of course, the possibility that nothing happens and the Director(s) are left in limbo, but without having a dialogue with the CRA, or experience around the policies and procedures, there is no way that the Director(s) will know when and if the CRA is coming – if at all.

Once raised, the Director(s) have quite limited options.

A recent court case, which I will highlight below demonstrates a situation where an assessment was raised, and in Tax Court, the decision was turned over and the assessment cancelled.  I guarantee it won’t happen again, as the CRA will ensure their processes are tightened even more to close this loophole.

The case was Bekesinski V The Queen.

The link to the case on the website for the Tax Court of Canada, is here.

In this case, Bekesinski was the Director of a corporation who was personally assessed by the Minister of National Revenue (CRA) in the amount $477,546.08 for the corporation’s unremitted income tax (T2) and employer contributions of CPP and EI for payroll (source deductions) plus penalties and interest for the 2001, 2002 and 2003 fiscal years.

Under Director’s Liability, the CRA can assess directors for payroll and for GST/HST, but not Corporate Tax liabilities.

The Tax Court of Canada held that since the taxpayer had resigned as a director of the corporation more than two years after the CRA’s assessment, the CRA was statue barred from raising the Director’s Liability assessment.

This was something the CRA should have known before raising the assessment and something that the director (or his representatives) should have mentioned at any point during the pre-assessment proposal period, especially at the due diligence defense stage, but was never mentioned.

Brief Overview of the Facts

In 1992 the taxpayer purchased D.W. Stewart Cartage Ltd., a general cartage, trucking and warehousing company where he served as a Director of the corporation.

When the corporation fell behind on filing obligations and as the balance owing to the CRA began to grow, the Director began to receive numerous letters from the CRA warning him that he could be held personally liable for the corporation’s tax debts as a Director of the corporation.  He did not notify the CRA at any time that he had resigned as a Director of the corporation.

On October 15, 2010 the CRA raised Director’s Liability and issued a Notice of Assessment (NOA) to the taxpayer for unremitted income tax, employer contributions plus penalties and interest in the amount of $477,546.08.

The Director then argued that he should not have been assessed as a Director because he resigned as Director of the corporation on July 20, 2006 by way of a Notice of Resignation which would have made the raising of the assessment statute barred.

The CRA argued that the taxpayer was in fact a director and that the taxpayer had backdated the resignation to qualify for the exception, which happens more than you could imagine, and to counter this trick, the CRA often requests an “ink date test” to determine the authenticity of the Notice of Resignation.

Unfortunately for the CRA, the results from the ink date test was excluded by the Tax Court because the CRA did not advise the Court that they felt the Notice of Resignation was back-dated.  Even the judge felt the Notice of Resignation was backdated, however since the CRA failed to mention it, it was not open for review in the Court.

In summation, Bekesinski avoided Director’s Liability for the corporate tax debts due to a litigation misstep on the part of the CRA, a mistake they are unlikely to be repeat.

It is highly advisable for corporate directors to carefully document their resignations so as to avoid potential future Director’s Liability assessments, because I guarantee, the CRA will challenges to the authenticity of backdated resignations on each and every case going forward.

Can You Describe What You Do To A Stranger? Tell People What You Do!

If you have been reading my posts on The Urban Daddy, or on inTAXicating, you will know that I sometimes put on my MBA-hat and question everything about the way we do business.

One of the questions I have had for a long time has to do with how businesses choose to identify themselves to the public. We all know that keeping customers is much easier and much cheaper than getting new ones – so they say – which makes the next example even that much more puzzling to me.storefront without sign

Storefronts, in particular, have very limited space to let potential customers / clients know a whole lot about what they do, so that you will use their goods and services, yet many businesses continue to put their brand name on the store, or use an unreadable font which limits their ability to get new customers who are not walking by the store and who have the time to look in the window and walk in.

As I question this, I think back to one of the more complex collections cases that I handled while working at Canada Revenue Agency (CRA) and how after years of being unable to get a cent out of this establishment, I had much different results.  This case had to do with a very large restaurant just North of Toronto which had fantastic food, very positive reviews, incredible decor, and $3,000,000.00 owing in taxes, without a single payment made to arrears in years.

The owners of this restaurant were perplexed at the spiralling debt and their bleak prospects for operating in the future because what started off as a very profitable business venture went south, quickly and at massive costs – both personal and professional.  When their debt grew, they started to cut costs, but it was the wrong costs – like having fresh food on the premises daily, reducing the variety and portion size on their menu and by running out of options at meal time.

Regular patrons became frustrated with the frozen additions or the cutting out of their favourite meal choices and as their clientele dwindled to handfuls of patrons during the day and at night, it only made matters worse.

With their personal assets fully leveraged to keep the business running, they were steps away from bankruptcy and losing everything.  They also were not paying their tax debts, but they were staying current on their filing obligations, and between the threats from previous collectors and their power being turned off all the time, they knew the end was near.  After hearing this, I thought I would need to see it myself, so I took my newly earned MBA and headed out to have a conversation with them about what they had intended to do with these debts.

But I could not find the restaurant.

It was supposed to be 15,000 square feet, and I knew the intersection quite well, but could not for the life of me find their establishment.  I called the owner and while I was circling the plaza on the corner he was frazzled about how I could not see their fantastic place, which I found to be very bizarre.

I ended up parking on the plaza on the corner and walked past a couple of stores before finally seeing what I had been circling for the better part of 20 minutes.  Their restaurant.

The outside of the building looked run-down and there was no name on the building.  I could not even tell where the front door was, and once I got to the door, I didn’t even know if it was open.  There was no sign that even said “Restaurant” or specified the type of food that was in there. There was some very hard to read script writing near the top of the building and near the door, but it looked more like graffiti than it did, a brand name.

Having been there a couple of years, locals knew about them, ate there but to an onlooker, there was no way of knowing there was a restaurant there.  I started to see a pattern emerge.

Upon sitting down with the owners I immediately suggested they perform a search on the business on the Internet (Alta Vista, I believe) and there right in front of their eyes, were people commenting about how they had made reservations but could not find the building, so did not go, or that they arrived but could not tell if the place was open, or where the front door was.  There was obvious frustration.

To me, it was common sense, that this building needed a sign that read “Italian Restaurant”, so at least people would know where they were going, or people who drove by or walked in the plaza would know there was something there.  On a more obvious scale a giant arrow pointing at the building would have been better but this was a very classy place, and that would cheapen the brand, they felt.

Needless to say, I spent 3-4 hours there, we talked about everything relating to their business, their debts – business and personal, and at the end of the day I decided to give them a couple of months to sort things out, reduce some costs, and try to attract more business which they knew they needed.

All of this effort was rewarded when they sent in a cheque for $250,000 at the end of the following month to the CRA.  By the end of the year, they had paid off $1.8 million dollars of their debt, and by the end of the next year, they were fully paid up (including penalties and interest) and business was booming.

Is it 100% a result of something I said? Probably not. Did I afford them the time to make money and pay off the debt, yes I did, but I also went through their options should they have chosen bankruptcy, a proposal, or to ignore the CRA completely and wait for their assets to seized and the directors assessed.

With all that information they were able to make an informed decision, the most obvious to me being that they improved their signage, cleaned up the outside, and put a neon sign which flashed “OPEN” on a very visible spot near the sign and near the door (with a classy arrow pointing towards the door).

But how does this apply to you and to me?

I recently took part in a challenge on LinkedIn to say what I do for a living in one sentence. I thought how hard could it be, and I wanted to check out what others had written before me. With over 300 respondents, I would have plenty of samples to review before taking the plunge, but I was shocked by what I saw.

I saw people – people I do not know – in businesses I did not know who wrote things like this;

“I solve all of your problems.”
“I get you want you need at the price you want.”
“I’m what you need.”
Even, “We’ve got you covered.”

I looked further at their business profile to see if I could tell what they did, however their business name, or description was equally as vague.

I read and read and read, almost 100 of them by now, and when I came to a comment by a lawyer, I was dumbfounded when I saw this; “I practice law.”

I immediately thought about what I would do if I came to this networking group for a professional to hire in a very specific area and I saw “I practice law” as someone’s description… Would I contact them to find out what kind of law? Or would I go to the next person.

I went to the next person.

Then the next and the next and the next.

Then I posted challenging people to go back and edit their posts. Be proud of who you are and the services you offer. Tell everyone what you do, be clear, but be brief, and if someone has more questions or wants information, they will reach out to you.

So what about my post?

Now I had a lot to live up to, because I called out the patrons of the group and if my post sucked, boy would I be the biggest hypocrite in the world.

So I posted this;

“My expertise is with the Canada Revenue Agency (CRA), and their Collections / Enforcement division and I use this knowledge to help people and business understand taxes and pay only what they owe, on their terms.

Then I said, “please read this and if you do not know what I do, or if there is feedback – positive and negative – please provide it. I too would love the perfect pitch and I appreciate any input from this fantastic group.

So next time you are looking for a restaurant to take your family and you drive by one which only has a name and not a type of food, think about how much business they could be losing by placing their focus on themselves and not on the service or product their offer.

#Tax

Reminder: If Extreme Weather Conditions Affected your Ability to File or Pay Taxes, the CRA wants you to apply for Taxpayer Relief.

If the recent extreme weather conditions affected your ability to file or pay taxes, the Canada Revenue Agency (CRA) wants you to remember about the Taxpayer Relief program.

From the CRA website, Dated June 27th, 2014.

“The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, today reminded taxpayers affected by recent extreme weather conditions, as has been seen in recent days in Alberta and Ontario, that the taxpayer relief provisions of the Canada Revenue Agency (CRA) are available to them if they are unable to meet their tax obligations.”

Corporations who are unable to file their T2 returns by the filing deadline of June 30, 2014, due to flooding or other circumstances beyond their control can apply to have interest and/or penalties waived or cancelled using Form RC4288, Request for Taxpayer Relief.

Business owners and self‑employed individuals who are unable to meet their filing and payment obligations may also be eligible for relief.  The CRA understands that natural disasters may cause great difficulties for affected taxpayers whose primary concerns during this time are their families, homes, and communities.

The taxpayer relief provisions provide a balanced approach to assist taxpayers in resolving tax issues that arise due to circumstances beyond their control.   Under these provisions, taxpayers can apply to the CRA to have interest and/or penalties waived or cancelled in situations where they are unable to file a tax return and/or make payments on time because of a natural disaster, such as tornadoes, floods, landslides, hurricanes, or forest fires, or as a result of other extraordinary circumstances.

The CRA will consider these requests on a case-by-case basis and during the time it takes for the CRA to review the application, it is likely that there will be notices sent to the taxpayer / organizations which have a penalty / interest balance.  It is always recommended where possible to pay these amounts owing as soon as possible as doing so stops the interest from continuing to accumulate on the balance.

Paying off the penalty and interest balance does NOT impact the decision made by the Taxpayer Relief group.

Also keep in mind that it can take the CRA upwards of 9 months to complete a review under the Taxpayer Relief program and that full relief of penalties and / or interest are not guaranteed.

If the initial request is denied, the CRA will send a letter indicating why, and what information is missing.  Taxpayers have another opportunity to apply for relief before considering whether a 3rd review – judicial review – is required.

 

For all your tax needs, contact inTAXicating at info@intaxicating.ca.

CRA Press Release: London Restaurateur Fined $43,070 for Tax Evasion

I cannot stress enough the importance of opening mail from the government, all governments, especially the Canada Revenue Agency (CRA).  Of more importance, if the CRA is looking for information, or tax returns, or if the notices are getting progressively more threatening, it’s a very good sign that you may need to speak to a professional to determine how to best proceed.

The CRA regularly issues press releases regarding tax evasion, and they have a link on their website related to convictions, here; http://www.cra.gc.ca/convictions.

The Canada Revenue Agency (CRA) announced today that on July 2, 2014, Jamil Barakat and 1441126 Ontario Inc. both of London, Ontario, were sentenced in the Ontario Court of Justice in London to a fine of $43,070.  On November 8, 2013, Barakat and 1441126 Ontario Inc. pleaded guilty, in the same court, to two counts of income tax evasion each.  1441126 Ontario Inc. also pleaded guilty to three counts of evading GST/HST. The fine represents 100% of the total taxes evaded. The fine has since been paid in full.

A CRA investigation revealed that 1441126 Ontario Inc., operating as Barakat Restaurant, failed to report $259,624 in taxable income on its 2007 and 2008 returns, which resulted in the evasion of $27,054 in federal corporate taxes. The corporation also understated its net GST payable for three quarterly periods in 2007, thereby evading an additional $2,976 in GST. The investigation also revealed that Jamil Barakat, in his role as director of 1441126 Ontario Inc., failed to report on his 2007 and 2008 personal tax returns $51,678 he appropriated from the restaurant.  By doing so Barakat evaded an additional $13,040 in federal income taxes.

The preceding information was obtained from the court records.

When individuals are convicted of income tax and GST/HST evasion, 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 may 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, the CRA is offering you a second chance to make things right through its Voluntary Disclosures Program (VDP). If you make a valid disclosure before you become aware that the CRA is taking action against you, you may only have to pay the taxes owing plus interest.  More information on the VDP can be found on the CRA’s website at http://www.cra.gc.ca/voluntarydisclosures.

For a free 15-minute consultation, call or email inTAXicating Tax Services at info@intaxicatingtaxservices@gmail.com.  We can be reached at 416.833.1581.

 

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!