With the growth of technology has come an increase with ways in which scammers can reach victims. Within the past few weeks we have been made aware of an email that has been going around claiming that they are the Canada Revenue Agency (the “CRA”). If you have received an email that is similar to the below, DO NOT fill out the application! Contact the Canadian Anti-Fraud Centre and report the scam. “Dear (name changed), After a January 2015 review of our records, we have investigated your fiscal activity and tax returns over the last seven years. Our calculations show that you have made over payments of $687.00 CAD. Due to the high volume of refunds to be processed, the telephone help line is unable to assist with this application. In order to process your refund, you will need to complete the application form made available on the CRA site

Canadians are always surprised to learn that an illegal business must pay tax on its income. Be it drugs, prostitution, theft, etc., the Canada Revenue Agency (the “CRA”) still wants their cut. If a taxpayer is caught committing a criminal act they will obviously be brought before the Courts on a criminal matter. What taxpayers do not realize is that once the criminal portion is finished, a whole new tax portion begins. The CRA will audit illegal businesses, and they will claim that the business made a certain amount of money, which the CRA essentially will pull out of thin air. It is then up to the taxpayer to prove that they did not make this much money. Taxpayers earning illegal income can even offset that income with business expenses. If the CRA is claiming that an illegal business must pay its fair share of taxes, then it is reasonably

Have you bought and sold a new condo over the past seven years? The Canada Revenue Agency (“CRA”) has deployed abusive audit practices and has been targeting the booming real estate markets in Toronto and Vancouver. The focus of this audit trend is primarily on individuals who intended on flipping said properties for a profit as soon as their project is complete. Many preconstruction purchases take years before the condo is ‘move-in’ ready. As such, taxpayers are forced to sell because their circumstances have substantially changed since the time of purchase. Approximately 250 buyers in Toronto and Vancouver have been asked to refund GST and HST rebates on homes that auditors have deemed aren’t being used as primary residences. As of late, auditors of the CRA have taken a tax first, ask questions later approach. When residential properties are sold, there are generally three tax treatments that can apply: Principal

U.S. Citizens worldwide have recently learned, especially through the enactment of FACTA, that they have a responsibility to come forward to the IRS. U.S. Citizens, whether residents or non-residents, dual citizens, and even non-U.S. Citizens who are deemed U.S. Residents are generally all required to report their worldwide income to the IRS, despite where they reside. This means filing tax returns reporting your worldwide income and filing any necessary information returns; including reporting foreign bank accounts and foreign financial assets. Coming forward to meet your filing requirements may be scary, but the IRS has made some recent changes that may make it beneficial for some to come forward now, rather than wait. Compliance with these programs may in some instances require the filing or re-filing of tax returns to include income that was not reported for the relevant tax years. To be eligible for many of these programs, you should

If you are a Canadian with offshore property and/or income, be advised that there are new reporting requirements due to changes imposed by the federal government. There have been signs to indicate that they are serious about making people pay. It is important to note that investments outside the country are not illegal as long as they report them. Canadians who invest outside of the country are in compliance with Canada’s tax laws as long as they report all of the income earned outside Canada. The Canada Revenue Agency (CRA) launched an Offshore Tax Information Program (OTIP) as part of the agency’s efforts to fight international tax evasion and aggressive tax avoidance. OTIP allows the CRA to make financial awards to individuals who provide information related to major international tax non-compliance that leads to the collection of taxes owing. If the information provided contributes to the collection of federal tax

I have seen a huge spike in the number of nurses being audited.  The number has increased dramatically over the last year.  The CRA is steadfast in going after the homecare sector and appears to be attempting to disallow virtually all of their deductions – despite the fact that many of these workers are only making $15-$20 per hour and can barely make ends meet.  Imagine, 20,000 nurses X $3000 per year in reassessments = $60 Million dollars per year for the CRA.  And at $3,000 per year, most people won’t challenge the CRA. They’ll just pay. One big area targeted during these audits are home office expenses.   In each case where a T2200 had been provided in the course of the audit, the CRA has cited the fact that the T2200 indicated that the home office was used less than 50% of the time – using the 50%

The Canada Revenue Agency is financially destroying victims of tax scams through the imposition of gross negligence penalties! You may have fallen victim to a tax scam, or perhaps one of your family members, friends or co-workers has been victimized.  After a wave of tax scams over the last number of years, thousands of victims across Canada find that they have been assessed “Gross Negligence Penalties” for their participation in these schemes. Many of these victims will lose their homes and their life savings – not because of the con artists running away with their money, but because of the penalties imposed by the Canada Revenue Agency.    The con artists in most cases took under $1000.  The CRA seeks to take tens or hundreds of thousands. Section 163(2) of the Income Tax Act allows for the imposition of Gross Negligence penalties, which equate to 50% of the tax reduction that

March 16, 2015: For the millionth week in a row Dale Barrett’s book is featured on Amazon’s bestsellers list. No other Canadian tax lawyer’s book appears in the top 100! Tax Survival for Canadians: Stand up to the CRA, which was published in March 2013, ranks 7th in tax, 7th in taxation, and 68th in accounting. These rankings place Dale Barrett’s book higher on the Amazon bestsellers list than any other Canadian Tax lawyer’s book. CLICK HERE TO BOOK A CONSULTATION WITH A TAX LAWYER

Have you ever phoned the Canada Revenue Agency seeking advice or clarification about an important tax matter? Have you ever wondered whether you are getting correct advice? Well a recent internal survey (conducting by the government itself) asking that very question provides some shocking new information as to the accuracy of the information taxpayers are receiving when they phone the government looking for help. When business owners sought tax advice from the Canada Revenue Agency, they were given incorrect information 25 per cent of the time! That is ¼ of all taxpayers! The questions the government employees got wrong related to GST/HST, payroll remittances and deadlines for submitting corporate income tax returns. The survey also found that 44 per cent of taxpayers had to dial the help line multiple times to reach the automated system. It took the average caller nearly three attempts to reach a CRA agent. Prior to

February 23, 2015: Gail Johnson from Yahoo Finance wrote a useful article on “What Happens when your tax return gets audited” According to Barrett Tax Law, the CRA performed more than 370,360 audit and review actions in the 2008-09 tax season. During that period, it conducted 1,439 international tax audits and 34,111 tax shelter audits. Of those investigations, the Public Prosecution Service of Canada received 164 cases for criminal prosecution while the Ministere de la Justice du Quebec received 58 GST audits to prosecute. The article in its entirety can be accessed here. CLICK HERE TO BOOK A CONSULTATION WITH A TAX LAWYER