Tax

Large penalties, jail time common in 'tax protest' scheme cases

A recent case where two ‘tax protesters’ were given jail sentences for their role in enabling or advising individuals to evade paying income tax shows that the arguments made in these cases are habitually rejected by courts and the penalties awarded are often steep, Canadian tax lawyer David J. Rotfleisch tells AdvocateDaily.com. Read more

$1.7M award for B.C. couple after malicious prosecution by CRA

VICTORIA — A Vancouver Island couple has been awarded nearly $1.7 million in damages after a judge criticized the Canada Revenue Agency for the “ruination'' of their business and personal lives by “high-handed, reprehensible and malicious" actions. A judge of the Supreme Court of British Columbia says a Nanaimo couple were the victims of an “egregious'' prosecution based on unfounded theory and suspicion about alleged tax evasion at the couple's restaurant and other businesses. The couple were operating a restaurant, nightclub and motel in Nanaimo in 2008 when they were charged with 21 counts of tax evasion for allegedly skimming $1.7 million from the business. They were acquitted of all charges in a provincial court trial in 2010 in what the judge hearing the case agreed amounted to the Crown using “voodoo accounting'' to support its case. The couple sued for malicious prosecution, alleging the prosecutor, the Canada Revenue Agency and its senior investigator targeted them, despite lacking any direct evidence of wrongdoing. The ruling says the prosecutor failed to exercise “prosecutorial discretion'' but clears him of malicious intent. It criticizes the agency and its senior investigator in assessing punitive and aggravated damages on behalf of the couple. “The CRA used the powers of the state in the form of a criminal prosecution to wrongfully and maliciously prosecute,'' writes the judge. The judge also criticizes the senior investigator for misleading the prosecution, almost from the beginning, finding he knew evidence that was required to support any allegation of skimming could not be gathered. “The behaviour of [the senior investigator] respecting the suppressing and misstating of evidence deserves rebuke. It offends this court's sense of decency and was a marked departure from conduct expected of an individual in [the senior investigator’s] position and an agency such as the CRA,'' the judge writes in his judgment dated Friday. Read more

Selling, trading cryptocurrency a 'taxable event'

Although taxpayers trading bitcoin for another cryptocurrency may think they do not have to report the transaction, they need to be aware that in the eyes of the Canada Revenue Agency (CRA), a swap constitutes a taxable disposition, Canadian tax lawyer David J. Rotfleisch tells AdvocateDaily.com. Read more

Taxpayer's responsibility to review accountant-prepared return

Although many Canadians hire a professional to prepare their tax return, the courts have generally been unwilling to allow taxpayers to rely entirely on their accountant to ensure the accuracy of their return, Toronto tax litigator Adrienne Woodyard writes in The Lawyer’s Daily . Read more

No such thing as materiality in estate accounts

While materiality is an important convention in accounting and auditing relating to the significance of an amount, transaction, or discrepancy, it has no real application in estate accounts, says Avi Dahary , founder of AccounTrust. Read more

Director liability for corporate tax debts depends on facts, geography

Because the rules regarding when and how an individual ceases to be a corporate director vary by jurisdiction, those who rely on the two-year rule to escape personal liability for corporate tax debts may experience dramatically different outcomes depending on the applicable law, Toronto tax litigator Adrienne Woodyard writes in The Lawyer’s Daily . Read more

U.S. Tax IQ webinar on Tax Cuts and Jobs Act

U.S. tax accountant Brandon Vucen and U.S. tax attorney Alexey Manasuev are hosting a free webinar to address key provisions of the Tax Cuts and Jobs Act and explain how the new U.S. tax law will affect you and your business. Read more

Upcoming changes make CRA's VDP less attractive to taxpayers

Changes to the Voluntary Disclosures Program (VDP) set to take effect March 1 will make the initiative far less attractive to taxpayers and may lead to its effective demise, Canadian tax lawyer David J. Rotfleisch tells AdvocateDaily.com. Read more

Changes to tax reform proposals not beneficial to lawyers

While the federal government recently moved to scale back the tax reforms it proposed for professional corporations last year, the changes that will be the most helpful are not available to lawyers, Canadian tax lawyer David J. Rotfleisch tells Law Times . Read more

Proactive tax planning a must for athletes on both sides of the Canada-U.S. border

Professional athletes plying their trade in both the United States and Canada need to get an early start on maximizing the tax efficiency of their affairs, says Oakville-based U.S. tax attorney Alexey Manasuev. Read more

CRA move to obtain PayPal information not yet an enforcement action

Although PayPal has informed certain business account holders that it was recently ordered to release the details of their transactions to the Canada Revenue Agency (CRA), this alone does not constitute an enforcement action or an audit by the taxman, Canadian tax lawyer David J. Rotfleisch writes in The Lawyer’s Daily . Read more

Profit on sale of bitcoins reportable to CRA

Even though bitcoin is bought and sold in cyberspace, any gains realized on a digital currency transaction must be reported to the Canada Revenue Agency (CRA), Canadian tax lawyer David J. Rotfleisch tells BNN. Read more

Announcement of audit targeting wealthy serves a purpose: Rotfleisch

Canada Revenue Agency (CRA) audits based on postal code may not be new, but in discussing its latest initiative targeting wealthy neighbourhoods, the taxman likely has a number of specific goals in mind, Canadian tax lawyer David J. Rotfleisch tells AdvocateDaily.com. Read more

Cross-border tax compliance for professional athletes

By Alexey Manasuev . With the globalization of sports around the world, and an unparalleled opportunity to get rare talent on one’s team, the professional sports leagues and teams in the United States and Canada are seeing a rapid increase of professional athletes crossing the borders on a regular basis and playing for teams and in leagues other than in their home country jurisdictions. There are no borders for professional athletes, but, with opportunities, come responsibilities. Read more