August 20, 2009 by Dan White.

This is kind of interesting…. you would wonder how this even got to court. The case was so bad that the tax court striped CRA of $35,000 in costs that were awarded to the Plaintiff (The stripper).

Dan White

Stripper 1, Taxman 0
Article in Toronto Star,

Federal taxman gets caught with pants down in battle against Montreal peeler
Aug 20, 2009 03:54 PM
THE CANADIAN PRESS

MONTREAL – In its legal showdown against a tax-wary stripper, it’s the Canada Revenue Agency that’s been caught with its pants down.

The legal saga over $2 million in undeclared revenue began at Chez Paree – a pricey Montreal strip club patronized over the years by scores of wealthy executives and visiting athletes, including some very prominent hockey Hall of Famers.

Martine Landry was a dancer there and was particularly popular with one rich, elderly customer.

The publishing-industry magnate, now 80, began to introduce her to a world she knew nothing about.

He showered her with gifts worth about $2 million: a Corvette, money to buy a BMW, eight fur coats, jewels, a vacation, cash to buy a big downtown bar and get out of the dancing business, and $168,000 in $1,000 bills for a down payment on a house.

Landry, the adoptive daughter of a single mother, said her benefactor was impressed with her determination to succeed after a modest upbringing.

Like many Canadians, Landry had a difference of opinion with the federal taxman about how much money she actually owed.

The feds demanded $602,617 in taxes and penalties for the years 1998 to 2002.

But the Tax Court of Canada sided with Landry.

Judge Robert Hogan ruled the gifts, under Canadian law, could not be taxed.

Hogan also ruled that a more in-depth investigation by the CRA would have given them the answers they sought.

Landry was awarded $35,000, less than the $50,000 her lawyers had been seeking.

But the story’s not over: Revenue Quebec still wants $643,000 in taxes and penalties and that case is playing out in a Quebec court.

Landry is also now considering a lawsuit against the Canada Revenue Agency.

Her lawyer, Yves Ouellette, said in a radio interview he was pleased with the decision.

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August 20, 2009 by Dan White.

 Hi Folks,

As you all know CRA is putting ever increasing efforts to collect money. eCommerce is an easy target. Some of you may want to consider voluntary disclosure if you have been receiving non reported income.

The following article was written by Stevan Novoselac and John Sorensen of Gowling Lafleur Henderson LLP.

This is another reason to keep audit ready books. Remember all bank deposits are considered income unless proven otherwise.

Dan White

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Stevan Novoselac and John Sorensen

Canada
August 18 2009

Canadians who sell goods using eBay take note: the Canada Revenue Agency (”CRA”) knows who you are and is planning to commence in-depth audits beginning towards the end of this summer. There is an opportunity now to avoid CRA fines, penalties and prosecution, but that window of opportunity is closing fast.

In late 2006, the CRA obtained a court order requiring eBay Canada Ltd. and eBay CS Vancouver Inc. (collectively, “eBay”) to provide the CRA with the names, contact information and gross annual sales figures for eBay’s so-called “Powersellers”, for the purpose of verifying the Powersellers’ tax compliance. The information sought by the CRA was needed to determine if the Powersellers had properly reported income earned from sales made on eBay.

eBay refused to provide the information CRA required, and resisted the CRA at the Federal Court, and on appeal to the Federal Court of Appeal. However, the CRA ultimately succeeded when, on November 7, 2008, the Federal Court of Appeal ruled in its favour. eBay was therefore required to provide the CRA with the names, contact information and sales records for all Canadian Powersellers.

In a recent press release, the CRA confirmed that it will be commencing in-depth audits, based on the information extracted from eBay, at the end of the summer of 2009, and that it will continue to vigorously enforce the provisions of tax legislation. The press release suggested that eBay sellers come forward as soon as possible, pursuant to the CRA’s Voluntary Disclosure Program (”VDP”), to correct their tax reporting, to avoid fines, penalties and prosecution.

CRA’s VDP allows taxpayers to voluntarily come forward to correct incomplete or inaccurate tax filings and/or to disclose previously unreported matters to the CRA, without threat of fines, penalties or criminal prosecution. Additionally, a lower rate of interest may apply to outstanding amounts that are more than three years past due. Where amounts are long overdue, the accrued interest, fines and penalties can easily exceed the amount of tax in issue. Therefore, it is generally recommended that taxpayers with outstanding tax issues avail themselves of the VDP as soon as possible. Taxpayers who have not reported income from e-Commerce, and who do not commence voluntary disclosures face a significant risk of audits, which may result in substantial fines and penalties.

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