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TAX AUDIT SOLUTIONS

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Anger at CRA

Canadians tipping point?

TAX AUDIT SOLUTIONS see Website.

There is only so much the Canadian Tax Payers will tolerate. We are getting near the tipping point. Just as in the Middle East, governments have toppled as a result of citizen frustrations and ill treatment, it will happen here too. When you start clawing back Child Tax Credits from Single Mom, you have gone to far.

Taxation in Canada is now abusive and is as per the top Guns. The Prime Minister and the Minister of Revenue, know full well what they are doing to Canadians and they hold the smoking guns.

I get an interesting perspective dealing with what goes on in CRA. There is anger building up in the Canadian population over CRA and our tax system. Taxpayers are having trouble finding help and think they all have unusual situations, which they don't. And there is a big embarrassment factor that keeps them silent. The Internet is the tool that brings the truth on the table, as more and more Canadians blog, tweet and email broadcast, the more Canadians see that you can stand up and make a difference. It will happen here in Canada... We can fully expect there will be a groundswell of anger. That anger will spread across this great land like a grass fire.

We are close to the ignition point now... civil court cases against CRA in the courts, more cases pending, Bankruptcies from unmanageble tax bills,  lives and health being ruined, marriage breakups, .. We are at the point of an explosion of resentment.

From years of fighting CRA and hiring three different former CRA Auditors to work for me, I have developed a well rounded understanding of the inner workings of the mysterious and intimidating CRA.

One of the ex-auditors I hired was from the Special Investigation (SI) branch and having him work for our clients provided an interesting perspective on the things he used to look for when investigating. Like the BMW SUV parked in front of the local nails and beauty shop.

I have seen just about every dirty technique that can be pulled on Canadians. I believe in fiercely defending the rights to fair taxation of Canadians. I do not support tax evasion. I do support not paying one cent more income tax than what is legally required. I do believe in defending Canadians against CRA abuse by CRA staff that does not even read or observe the Canadian Taxpayers Bill of Rights, as published by CRA themselves.

One has to understand that CRA is a revenue regime. Their objective is to collect as much as they can. It only costs the government 10% of money collected to run the regime where there are 2,400 auditors in the Greater Toronto Area, alone. Consider what CRA stands for Canada Revenue Agency. "Revenue" being the operative word. Ask yourself "what goes on with a CRA team leader and his team of auditors?" Is their objective to be fair and reasonable, to look for reasons to prove the taxpayer right? Or do they have an attitude that says "look for reasons the tax payer is wrong, and get as much as from you as you can?"

The CRA costs billions of Canadian Dollars to run. I wonder why, when we already have a flat tax in the form of GST, why we need income tax. Why not just have a higher HST and no income tax? It would take all the complications of accounting away.  And it would save Canadians billions of dollars that fund the half-million audits CRA performs, annually. But for now, at least, we carry on with incredible complexity for the sake of complexity. All the while building more and more resentment in Canadians to what is perceived as an unfair tax regime.

By law, all taxpayers are equal when it comes to taxation. This does not mean that all are subject to the same tax rate, but rather that everyone that owes tax must pay it. Tax evasion and the underground economy have replaced the salt smugglers and pirate-smugglers of yesteryear. These offences call into question the fairness of direct taxation because the amounts not remitted by tax evaders must be borne by other taxpayers. So to level the playing field more and more Canadians move underground with some or all of their businesses.

In days of yore, if you were a tax evader, you would be scorned by your fellow citizens; today your fellow Canadians would want to know how you were getting way with it.

Canadians are angry about the amount of penalties and interest they are charged on taxes they already cannot afford to pay. They don't understand how it makes sense to charge penalties of up to 100% of the tax owed, when they can't even pay that. It does not seem like a kinder, gentler Canada to those caught in a tax mess and afraid of losing their homes and even going bankrupt.

There are thousands of tax auditors out there auditing the books and records of Canadians. As a result of this activity, there are many thousands of Canadians, stressed out wondering if they will need to go bankrupt over unmanageable tax debt. Receiving one of those brown envelopes from CRA often strikes fear and dread in the minds and hearts of Canadians, they are even afraid of opening the brown envelope containing letter the letter of doom.

The tax system is complicated and gets more and more so every year. The vast majority of Canadians do not know how to keep their books and records the way they must, in order to become audit-proof.  It is not part of our educational system to teach personal finance and taxation in a meaningful way.

The greatest fear in the world is "the fear of the unknown." Not knowing one's rights, what to do or what to expect is a scary situation for Canadians. They don't know where to turn and often are in such bad shape financially that they can not afford help.

Very often Canadians feel shame and embarrassment because they have tax problems and don't realize that many thousands of fellow Canadians are going through the same thing. Canadians are usually afraid to fight the tax department for fear they will be on the Government's target list for the rest of their lives. So they live in silent tax loneliness.

Many Canadians turn to the underground economy to survive financially. We don't advocate such activities but we certainly understand why it happens. With the advent of HST (Harmonized Sales Tax) in Ontario, there is a greater pressure to avoid taxes and go underground. When you consider adding 8% to an already expensive service the total of 13% wipes out even the tax credits for home improvements.

The underground economy in Ontario is so big and so in your face, that small businesses forget that it is illegal. The language of "If you don't need a receipt, I won't charge you tax" is part of our everyday experience.

What this means is that the government has lost the respect and support of average Canadians. Now the movement is to get away with as much as you can. While tax evasion is alluring, it is not the wisest answer.

What we at Tax Audit Solutions recommend is: stay above board in your tax liabilities, learn how to keep perfect business records. All good businesses need to learn how to structure their business affairs and to back up documentation in such a way that they pay a minimal amount of tax. Audit-ready bookkeeping is a far better solution than the underground economy.