Comments for Blog

Comment on Tax Audit Solution to disposition to worthless shares. by Tax Filing

Tax Filing — Fri, 23 Dec 2011 18:29:31 +0000

Thank you to sharing this types of such very useful information about tax filing preparation. I thought there was a catch in this plan someplace, just couldn’t figure it out. 95% of the people making under 200 grand would pay more in taxes I found that this types of information is very useful during the tax filing via online and when we are filing our taxes thanks once again

Comment on Royal Bank Teams Up With CRA Collections. by Teresa

Teresa — Mon, 26 Sep 2011 17:55:10 +0000

Thank you for providing this information that RBC CSR Manager and the business banking CSR refused to provide. I contacted RBC as well as the above number and they advised me they could not release the legal court order to me that it was internal only and that I would have to contact CRA directly (which I had already done with no response). They were surprised that I had the internal number and refused to speak with me trying to refer me back to the branch and their CSR who were useless. I told them I would be closing all my business and personal accounts with RBC and that I’d be writing a letter to the Ombudsman. Their response was that I could do that if I wished as if they didn’t really care about my business.

Any other suggestions fellow RBC customers who have experienced this already?

Comment on Open letter to visitor to our web: Rant on CRA by Steven Wright

Steven Wright — Mon, 27 Jun 2011 15:45:13 +0000

Hey, I also have a little rant on the CRA,

In response to Dan White regarding Fighting the CRA on your own, I recently won a court case in regards to a tax shelter type program i applied for (VIA Project)which is great but you should of heard the things they were accusing me of due to previous cases similar to mine. In my Opinion the Court’s should not be active participants in the determination of the quantum of tax paid by any taxpayer, shaping their interpretation of the legislation so as to result in a pre-determined conclusion. It is the Court’s responsibility to interpret and apply the legislation in a consistent and equitable manner, so that one will be able to determine with some degree of certainty, the application of the Act (ITA) and the amount of one’s tax payable. That was the message in the SCC in Her Majesty the Queen (Appellant) v. Canada Trustco Mortgage Company (Respondent) 2005 D.T.C. 5523 and it should be the case in all of our jurisprudence, especially where based in whole or in part on the Courts of Equity; however, that is increasingly not becoming the case as more and more Justices are becoming pro-active makers of law, rather than constructive appliers of the law. And this is wrong.

Comment on W5 exposes how CRA has disdain for even their own rules. by Sharon

Sharon — Sun, 10 Apr 2011 01:39:53 +0000

After hearing the horror stories on W5 CTV news about the CRA and how they treated Eli Humby and destroyed his life and the life of his employees with no substantial evidence. I was comforted that I’m not alone and got the courage to write my story. No one knows how costly an audit is until you go through one. The lists of justifications go on and on 30 pages of fine print asking for ludicrous obvious responses.
Taxpayers need to know how Revenue Canada pays big fat salaries to incompetent auditors asking small companies to justify 15 cents receipt from Tim Horton. Obviously nothing costs 15 cents now days, it’s a cashier error. Another example of incompetency the auditor is requesting to justify Costco receipt that indicates items such as coffee and milk. I believe it is self explanatory what further justification he requires? We are a small company, one person is dedicated to make coffee and buy milk and sugar from Costco. Is this tax crime? Where does the abuse stop?
If the CRA thinks with such important amounts they can crack down on corruption in the government they need to think again. They simply are putting employers out of businesses and more employees are getting unemployed while big companies enjoy the shield of politicians and opt for outsourcing. The victims are who stay behind and employ Canadian workers.
Can a company requests a change of an auditor verses more informed one or at least more experienced one?
We had many auditors in the pas t but never with this extent of ruthlessness and incriminating attitude. To all readers or viewers we are not asking for tax shelter but for a lens of common sense.
The auditor has been digging his claws in our books for weeks and asking lame justifications such as above mentioned examples and the list goes on with idiotic questions.
This abuse of power by the CRA has dire consequences on all employees. My colleagues and I are concerned of losing our jobs and our employer gets burnt by the time we get to court, if need be. We don’t know what to do, how we could save our jobs. Our employer was very good to us during all these years we must help him but how?
I’m thinking people in the Middle East are revolting against state of emergency laws and abuse of power. We Canadians have one right in our backyard who is abusing us. Why can’t we revolt?
Let’s organize a protest against the CRA? Politicians want our vote so they must do something about this extreme abuse.

P.s.: I’m glad I found your blog.

Comment on There are more than 10 ways to avoid an audit! by Payday Loans for people with bad credit

Payday Loans for people with bad credit — Thu, 17 Mar 2011 11:27:53 +0000

Every business owners specially who are doing business in Canada must read the above post. Excellent and very well said by author. All the points to avoid an audit are good and thanks for wonderful sharing.

Comment on CRA trys to reinvent the meaning of the term “Principle Place of Business.” by Tax Canada

Tax Canada — Tue, 15 Mar 2011 14:45:31 +0000

Very information post about, it will be helpful for Canadian Taxpayers.

Thanks,
www.handt.ca

Comment on There are more than 10 ways to avoid an audit! by David

David — Mon, 14 Feb 2011 15:52:06 +0000

It is a really informative and useful Article.

Regards,
http://www.handt.ca

Comment on Taxpayer wins day in Court over use of home deductions for employees. by jay

jay — Sat, 08 Jan 2011 02:02:28 +0000

Do you know, that if you are applying for ei benefits that you have paid into, the U.I.C., another of their lettered agencies can phone your employer to ask if you are entitled to benefits despite the fact that he has “signed the papers”. If you have a conflict with him he can challenge your right to benefits! Is this not a total takeover? With the past employer being an unwitting stooge to their game. In turn the past employee will come against the employer with whatever they have. Sounds to me much like what they have done with the marital relationship. These people are absolutely evil and must be challenged. Course, they own the courts too.

You bring up a sore point with Canadians. The government agencies operate above the law, because we the citizens allow it. Until the population wakes up and unites to bring back the kinder gentler Canada, our political scene will remain that we elect dictators every election.

If you are truly passionate about what you say… why not organize the zillions of Canadians who fee the same as you feel?

Dan

Comment on CRA loses about Disability Payments being taxable income. by Emely Porter

Emely Porter — Mon, 13 Dec 2010 14:01:33 +0000

Many canadians are unaware that the canadian government offers Disability Tax Credit benefits and grants for anyone who has a physical or mental disability. Unfortunately collecting these benefits can be complicated and stressful. At the Canadian Disability Corporation they simplify the process to make sure you obtain every dollar possible from the CRA. On top of this, they will also ensure you’re applied to other programs available to people with disabilities such as the Registered Disability Savings Plan (RDSP).
http://www.canadadisability.ca/

Comment on The Smith Manoeuvre and the Singleton Shuffle bite the Dust. by James

James — Fri, 12 Nov 2010 03:16:28 +0000

Dan, say you have this situation:

-Person buys a bachelor (Property A) and lives in for a few years being financed on a HELOC.
-Person decides to buy a new 1+ den (Property B), but uses the freed up room on the HELOC as down payment.
-Would all of the interest be deductible? If not, how would it be possible to make it so?

The down payment interest is tax deductible. My warning.... tax problems re created by people not understanding how to set things up to avoid tax problems later. CRA is very good at disallowing expenses for reasons that taxpayers don't understand. So if you are going to do planning on growing your wealth, understand that CRA sees your profits as their money.

Comment on About Turning your Hobby into a Business? by clint

clint — Mon, 08 Nov 2010 23:44:53 +0000

Hello Dan,
While “googling” my own situation I came across your blog article which I have found very insightful. My question is whether I should be claiming the income I make as a part time musician. I get several requests throughout the year from friends who are “professional musicians” to fill in with them. I perform aprox six to eight shows a year and make about $1000 to $2000 annually from this. I also incur costs to do this such as traveling, gear and equipment, meals, etc.

I have no desire to turn this into something that will take over or supplement my day job. I honestly do this as a way to jam with friends and I just happen to make some extra cash as a result. I do not actively pursue “gigs”, I do not advertise (ie; personal website or musician classifieds) and I only accept performance requests via word of mouth however, I do enjoy this and I foresee this as something I would like to continue doing.

I have no ambition of turning my musical pursuits into a business pursued for profit in a commercial manner and because this has never been about career for me I have never kept accurate records but I am sure if I were to actually “start a business” and claim everything against what I actually made I could claim a loss every year. At the end of the day if my phone stopped ringing with offers to play I would be fine with that but in the meantime this is not the case.

I am having a hard time finding the correct information and deciphering if this something I should be claiming on my income. I envision this as something that I would like to continue with for quite some time but again I have no delusions of this actually becoming something profitable…it really is a hobby that has organically grown into something a little bit more.

What do I do? Is there a certain income threshold where I need to be concerned? As I don’t foresee this becoming profitable I really don’t want to go through the hassle of book keeping and claiming everything at tax time only to claim a loss for three years and then have someone tell me “oh, you shouldn’t be claiming this…it’s only a hobby”.

You advice and guidance is much appreciated.
Sincerely,
Guitar guy

Comment on The Critical Info on Statute Barred Years by Bruce Ryan

Bruce Ryan — Thu, 28 Oct 2010 17:45:31 +0000

Thanks for the overview, however, there are times when it makes sense to sign the waiver to the tax payers advantage. The one reason I know of is where the accounting and bookeeping have been done poorly and there are about to be statute barred ITCs that could be collected, but the work has yet to be done to properly document and file returns to collect the ITCs. Filing Wavor allows the work to be done to claim the ITCs and not loose them.

Just went through an Audit and had a lot of ITCs lost and now we are trying to preserve the remaing about to go Stat Barred.

Please let me know if you agree with this approach or have other approaches.

Bruce

Comment on CRA Abuse runs rampant! by Winston Smith

Winston Smith — Sat, 25 Sep 2010 00:11:15 +0000

We had an issue with a Revcan representative who insisted that we let him into our house to review our receipts and bank information right on the spot. One afternoon I was upstairs and I heard my daughter crying. I came down stairs and she told me that there was someone “scary” at the door. He was arguing with my wife, about what I could not hear at the time. As I got closer I heard him say that he was coming back to interview us and look at our books. She told him to stay away from the house and put it in writing. He looked at her and said, “Remember this face” and he walked away. The abuse continued 4 or 5 times more with him knocking on all of the doors, walking around the house, looking through windows and yelling through the windows that were open. He never answered even one of our own questions ever and never ever returned our letters or even answered one question in writing. I knew then that this was not going to end well, we will be going to court at the end of this year.

In these cases, you need a Tax Representative to run interference. When an auditor decides to punish a taxpayer… they know exactly how to do it. I would love to take this thug on… he would rue the day he threatened you.
Dan

Comment on HST is a new home buyer’s tax problem. We now live in a new tax world. by maxmidas8

maxmidas8 — Fri, 03 Sep 2010 02:58:19 +0000

Your post was very informative.It helped me a lot..
http://www.midasrealtygroup.com

Comment on The Critical Info on Statute Barred Years by lee errett

lee errett — Wed, 01 Sep 2010 23:45:29 +0000

Dan,
This is an excellent contribution as even the CRA employees have difficulty explaining the concept of “statute barred”. The clearly stated message of keeping the books in order and be wary of signing waivers is sage advice. Statute barred is for protection of honest tax payers.

Lee

Comment on “CRA versus the People of Canada.” by Grant Baudais

Grant Baudais — Tue, 17 Aug 2010 17:29:00 +0000

Most Canadians are unaware of the fact that the word “income” is not even defined in the Income Tax Act. Even the Supreme Court acknowldges this (Ludco).
It is logical to conclude though that in order to have “income”, one must have a “source of income”. And according to the Supreme Court in the Stewart case (2002),
http://scc.lexum.umontreal.ca/en/2002/2002scc46/2002scc46.html, in order to have a “source of income”, one MUST have an intent to profit. So what of you had no intent to profit from your activity? Is it not then logical to conclude that if you had no intent to profit from your activity, there is no “source of income”, and if there is no “source of income”. there is no “income”, and if there is no “income”, there is no tax to pay?
The Supreme Court identifies an activity carried on with no intent to profit s a “personal endeavour”, or hobby if you will. So, if you are carrying on a “personal endeavour” with no intent to profit, then why are you paying an “income” tax on the amounts you receive?

The Income Tax Act is over 2500 pages long and is written in such form and language that even the “experts” have a difficult time coming to any agreement on its interpretation. So how do they expect the average Canadian to understand it? Perhaps the Act was written the way it is written to purposely deceive and confuse us into believing we have an intent to profit from our activities, i.e. a “source of income”, so they could tax it!

MODERATOR’S COMMENTS.

Hi Grant,

Thanks for your comment.

It is an interesting argument. The challenge with your thinking could be a lot of fun to pursue…. For instance, if you engaged in the thinking of “intent” all any business could simply start up for the purpose of having fun and have no intent of profit. The person would have to be willfully blind to the fact that they were making money.

It got me thinking and I did some poking in the income tax act.

While your argument has a logical thought train, it falls apart under the Income tax act.

You are 100% correct. If you have no source of income, then you do not pay tax on the money that did not come in.

I think you are right that income is not defined in the act.

However what is “taxable income” is clearly defined.

Thanks for playing with my head. I enjoyed the journey into the thinking.

Best Regards

Dan White
www.taxauditsolutions.ca

Comment on Bookkeeping goes to court…. businesses need to be “Audit Ready” by Dan White

Dan White — Tue, 30 Mar 2010 12:09:08 +0000

Hi Kat,
Thanks for your comments.
They help to keep things interesting.
Dan

Comment on Bookkeeping goes to court…. businesses need to be “Audit Ready” by Kat

Kat — Tue, 30 Mar 2010 09:29:53 +0000

Its called a line of credit…
They used their line of credit to pay the cards. The interest is much lower on a line of credit.
I know these parties personally and all i can say is that the old fool was in business long enough.He was involved and when the tax man came down on him …he blamed the bookkeeper!
Lets get real here… that is a lot of money to conveniently
lose track of. He knew exactly where his money went!

Comment on CRA Abuse runs rampant! by Marion

Marion — Sat, 20 Feb 2010 01:13:23 +0000

I, am horrified by, the thousands and thousands, of people being stolen from, by the CRA. More disquieting is, our government sanctions this thieving. Is Canada, the same as the Honduras? The corruption in this country is, absolutely revolting. I, stumbled on this site, after reading horror stories, of the CRA, cheating citizens, and our government aids and abets, them to do so. Citizens, are learning not to trust our government, but to have a government agency steal from the citizens, I can’t even print what I am beginning to think of, our squeaky clean, Canada.

Comment on Get Ready For An Increased CRA Tax Attack. by Gloria

Gloria — Sat, 20 Feb 2010 00:56:18 +0000

Citizens have to be extremely careful of the CRA. They have been scamming pensioners, who are too old and afraid to fight back. Their is also the fact, that many seniors and low income people, don’t have the funds to hire lawyers. In this country, justice is, only for those who can afford it. That poor couple from Prince George, lost their: business, other properties, their home, and every cent they had. The CRA, had shredded their papers, the CRA, refused to reimburse the couple. Governing officials, did absolutely nothing to help those people, what so ever. All the Cra, have to do is, lie and deny. They can and will, seize your house your car, and everything you have. This is approved by our government. There has been corruption, caught in their ranks. Do, be very careful, when you ask them a question, a lot of their staff, don’t know their jobs. If, they give you the wrong advice, you will be forced to pay for their wrong advice. I, personally know a senior, who, had that happen to her. If, you do call them, make sure you have someone on the other phone, as a witness. Income tax, is such a hell of a mess in this country, and far too complicated, and as I said the CRA staff, can’t even keep with, that, God awful mess. So, innocent people, get shafted, more and more every year.

Comment on Canada Revenue Agency’s loss of records a Million Dollar mistake, by Kathy Tomlinson by Claire

Claire — Sun, 22 Nov 2009 08:43:24 +0000

Thanks for going public with your story! We’re in a similar situation - CRA made an obvious error and won’t honour it. I wish you success in recovering from this horrible plight.

Comment on Cash for gold not necessarily exempt from tax by Gold

Gold — Wed, 18 Nov 2009 08:45:46 +0000

Thanks for the information, we will add this story to our blog, as we have a audience in the gold sectors that loves reading like this”
Gold

Comment on Tax Court of Canada recognizes true residency for Trusts. by immigration

immigration — Sat, 31 Oct 2009 08:33:10 +0000

Excellent site!Thanks for such a wonderful informative and entertaining read. Quotations are a great way to inspire you to perform at your best and to remember sage advice from the smartest minds in the world.
http://immigrationprofessionals.info

Comment on Extremely Important Judgement to Read and Understand. by Dan White

Dan White — Fri, 04 Sep 2009 15:31:01 +0000

If it makes you feel better … Justice Bowman has retired.
The real problem lies in that the right information is not in the hands of the tax payer when it comes to how to handle receipts. Many accountants do not communicate to their clients the grave seriousness of how receipts are handled on a daily basis.
Dan White

Comment on Medical Expenses as a Charter Argument. by perpetualspiral

perpetualspiral — Thu, 03 Sep 2009 23:34:38 +0000

Ok that was too much for me to read, but I can relate. I’m on ODSP - Ontario Disability, and the only ‘treatment’ covered is old meds that don’t help. If they want people to get back to work, you think they would help them get better…