Have Canadians Ever Had the Right to Pay the Lowest Tax Allowed by Law? Part I of II :CRA SOTW
----
Due to request, this week and next week we’ll be rerunning one of last year’s most popular tax tales from the Canada Revenue Agency SOTW Library
---
Every court in the land has affirmed that Canadians have the right to pay lowest amount of tax allowed by law.
Makes perfect sense. Doesn't it?
But although National Department of Revenue, Revenue Canada, the CCRA or the CRA (or whatever name they choose to use) has been present at each and every one of these court decisions somehow... well... lets just say that for some reason they consider this to be a guideline rather than an actual set-in-stone law.
Let's consider audits for a moment. Oft times auditors do find discrepancies in Books and Records and so they are right in adjusting income/expenses and tax owed. But, other times, it seems that a CRA auditor will decide on a discrepancy simply because they feel they have to - to justify their job (and paycheque). After all if they don't find error than they don't need auditors do they?
Now of course we all have the right to appeal questionable assessments. So, for example let's say that you're unjustly reassessed with tax, penalty and interest totalling $1000. To fight this you may have to pay an accountant to help you out. If you go to court you may
decide on hiring legal representation. You have to take a day or more off work to prepare everything and appear in court - that's lost pay. There's the time and expense of travel. And the possibility of further appeals. This could all add up to $1000. Or more. Much more. And of course the aggravation and stress. So in the end very often it is cheaper to pay tax that you don't owe than to challenge a bogus assessment.
And some feel that by paying a tax debt that they don't owe that the CRA will just let them be while if they challenge... well the CRA will just go after them with a vengeance. But is this true? Or does it just make them bolder? If we got an extra $1000 this tax year why not go for $1500 the next?
Still not convinced?
Well then lets go back a number of years to a chap by the name of Blair Longley.
Blair Longley (Blair T. Longley and Her Majesty the Queen) dreamed up a plan whereby Canadians could receive federal political contribution tax credits for contributions made to a political party. But his idea was a bit different because the contributor could direct their contribution so as to benefit the contributor or to benefit the contributor's designate. This plan became known as the "Contributor's Choice Concept" (the "CCC"), or "Longley's Loophole". But because some were skeptical of his scheme Mr. Longley requested confirmation from the tax collector that his idea was legal. For five long years he pursued RevCan seeking written confirmation that his idea was legal.
But Revenue Canada refused to acknowledge this to him in writing.
His patience finally wearing thin he decided to take this issue to Court. It was the Court's decision that:
"Revenue Canada dealt dishonestly with Mr. Longley. It is apparent that Revenue Canada was aware from early on that Mr. Longley's scheme did not appear to be contrary to the provisions of s. 127(3) of the Act. Nevertheless, they set out to discourage him and his potential contributors by refusing to confirm that fact and, ultimately, to mislead him with respect to the legal strength of the Department's position. The Department acted without regard for its obligation to deal fairly and openly with all taxpayers and to administer the Act in accordance with the law."
But the judge's decision did not end here, he concluded by stating:
"I am of the view that the award in this case ought to be one which reflects the Court's displeasure with the abuse by Revenue Canada of its position. In the circumstances of this case I have concluded that the appropriate award of punitive damages, intended to dissuade Revenue Canada from acting again in such a high handed, arrogant and dishonest way, is $50,000."
Convinced? No? You're not?
Well than stay tuned for next weeks stunning conclusion to the question "Have Canadians Ever Had the Right to Pay the Lowest Tax Allowed by Law?" For a pair of Court cases that you just will not believe.
------------------------------------------------------------------
Miss a Tax Tale Miss a lot!
Link to the entire CRA SOTW Library!
http://canada.revenue.agency.angelfire.com
------------------------------------------------------------------
Alan Baggett – Tax Collector’s Bible
----
Due to request, this week and next week we’ll be rerunning one of last year’s most popular tax tales from the Canada Revenue Agency SOTW Library
---
Every court in the land has affirmed that Canadians have the right to pay lowest amount of tax allowed by law.
Makes perfect sense. Doesn't it?
But although National Department of Revenue, Revenue Canada, the CCRA or the CRA (or whatever name they choose to use) has been present at each and every one of these court decisions somehow... well... lets just say that for some reason they consider this to be a guideline rather than an actual set-in-stone law.
Let's consider audits for a moment. Oft times auditors do find discrepancies in Books and Records and so they are right in adjusting income/expenses and tax owed. But, other times, it seems that a CRA auditor will decide on a discrepancy simply because they feel they have to - to justify their job (and paycheque). After all if they don't find error than they don't need auditors do they?
Now of course we all have the right to appeal questionable assessments. So, for example let's say that you're unjustly reassessed with tax, penalty and interest totalling $1000. To fight this you may have to pay an accountant to help you out. If you go to court you may
decide on hiring legal representation. You have to take a day or more off work to prepare everything and appear in court - that's lost pay. There's the time and expense of travel. And the possibility of further appeals. This could all add up to $1000. Or more. Much more. And of course the aggravation and stress. So in the end very often it is cheaper to pay tax that you don't owe than to challenge a bogus assessment.
And some feel that by paying a tax debt that they don't owe that the CRA will just let them be while if they challenge... well the CRA will just go after them with a vengeance. But is this true? Or does it just make them bolder? If we got an extra $1000 this tax year why not go for $1500 the next?
Still not convinced?
Well then lets go back a number of years to a chap by the name of Blair Longley.
Blair Longley (Blair T. Longley and Her Majesty the Queen) dreamed up a plan whereby Canadians could receive federal political contribution tax credits for contributions made to a political party. But his idea was a bit different because the contributor could direct their contribution so as to benefit the contributor or to benefit the contributor's designate. This plan became known as the "Contributor's Choice Concept" (the "CCC"), or "Longley's Loophole". But because some were skeptical of his scheme Mr. Longley requested confirmation from the tax collector that his idea was legal. For five long years he pursued RevCan seeking written confirmation that his idea was legal.
But Revenue Canada refused to acknowledge this to him in writing.
His patience finally wearing thin he decided to take this issue to Court. It was the Court's decision that:
"Revenue Canada dealt dishonestly with Mr. Longley. It is apparent that Revenue Canada was aware from early on that Mr. Longley's scheme did not appear to be contrary to the provisions of s. 127(3) of the Act. Nevertheless, they set out to discourage him and his potential contributors by refusing to confirm that fact and, ultimately, to mislead him with respect to the legal strength of the Department's position. The Department acted without regard for its obligation to deal fairly and openly with all taxpayers and to administer the Act in accordance with the law."
But the judge's decision did not end here, he concluded by stating:
"I am of the view that the award in this case ought to be one which reflects the Court's displeasure with the abuse by Revenue Canada of its position. In the circumstances of this case I have concluded that the appropriate award of punitive damages, intended to dissuade Revenue Canada from acting again in such a high handed, arrogant and dishonest way, is $50,000."
Convinced? No? You're not?
Well than stay tuned for next weeks stunning conclusion to the question "Have Canadians Ever Had the Right to Pay the Lowest Tax Allowed by Law?" For a pair of Court cases that you just will not believe.
------------------------------------------------------------------
Miss a Tax Tale Miss a lot!
Link to the entire CRA SOTW Library!
http://canada.revenue.agency.angelfire.com
------------------------------------------------------------------
Alan Baggett – Tax Collector’s Bible