Take a Number

TAKE A NUMBER
Victor Drummond ©

A Critical look at the Latest Unfair Income Tax Fix.


According to the news release at the following URL :- Jim Flaherty, Minister of Finance, and
Carol Skelton, Minister of National Revenue made an announcement that should warm
the hearts of every Canadian Taxpayer. Check this out:-

http://cnews.canoe.ca/CNEWS/Canada/2007/05/28/pf-4214667.html

Canadian Taxpayers no longer need suffer the insults, neglect, threats of penalties etc. that has been
the bane of Canadian Taxpayers in the past. From now on if you feel mistreated by Revenue
Canada, in any way, you need only fill out a copy of the form:- "Request for Taxpayers Relief"
which can be found at the government web page:-
www.cra-arc.gc.ca./E/pbg/tf/rc4288/rc4288-e.pdf
and be sure to read the applicable regulations on page 4.

Not only may the dissatisfied taxpayer make a request for Tax Relief once – he or she may make the same request a second time if the prior request is not resolved to the taxpayers satisfaction.

Unfortunately for victims of the “Taxable Benefits” rip-off those 40 new Federal Ombudsmen
have no real power or authority – they can only make recommendations – which -- those that do have the power, to implement proper corrective action, may ignore just as they have all appeals, to date, for fair and equal rules, of taxation.

Here is a clip from the news release above:- “The ombudsman will deal only with service issues not tax policy, programs, or any proceedings before the courts - and will only conduct reviews and make recommendations, with no "directive powers" or disciplinary authority”

Another clip implies a classic case of financial irresponsibility by a government member with a portfolio specifically finance oriented:- “The minister could not say what the new bureaucracy would cost, other than to say its expenses would be absorbed by the current budget of the Canada Revenue Agency.”
(The “minister quoted here is the Hon. Jim Flaherty, Minister of Finance.)

The Hon. Mr. Flaherty didn’t elaborate on just why he couldn’t tell how much this new agency would cost.

Giving him the benefit of doubt it could be assumed he knew the answer but for reasons known
only to himself he preferred not to reveal this cost. In any case he feels the cost is irrelevant as it will come out of the existing budget of Revenue Canada.
(Not a Taxpayers concern apparently.)

Beneficiary’s of this new federal agency and Charter of Taxpayers rights should cheer loudly and perhaps hold a victory parade around the parliament buildings in Ottawa,
But who are these lucky taxpayers?

Another clip from the news release provides the answer:-
“The Canadian Federation of Independent Business, which has often been critical of the revenue agency, praised Monday's announcement.” “Any move to increase transparency, accountability and fairness within the Canada Revenue Agency is positive for the small business community," said Garth Whyte, executive vice-president of the federation, which represents more than 105,000 small businesses across Canada.” "Too often taxpayers feel that the deck is stacked against them in any dealings with the tax authorities."
Whyte said the new bill of rights is an improvement over the last one, since it "modernizes" it. He said he hopes the ombudsman will provide immediate help to frustrated business owners, particularly in the area of penalities.
"People are upset with outrageous penalties and they should be able to get some relief, for the first time," Whyte said, adding he hopes the ability of willingness of the department to be forthright with information will also improve.
"The elements outlined in the taxpayer bill of rights such as the right to complete, accurate, clear and timely information and a commitment to applying tax laws consistently should go a long way to improving those measures, as will having recourse to an ombudsman's office," Whyte said. “The Canadian Federation of Independent Business” apparently see a great improvement in the dealings of their 105,000 members with Revenue Canada!

Does the word “consistently” used in the above statement mean “Fairly”, and/or “Justly” in Mr. Whytes mind? If so he is likely in for a big disappointment.

To date victims of the Unjust and Unfair Taxable Benefits boon-doggle have been treated consistently the same by Revenue Canada and by those who just made this grand, gesture.

All the hype and verbage contained in the “Taxpayers Bill of Rights”, and in the mandate given to the new federal taxpayers ombudsman add up to a real commitment of zero – so far as correcting the source of the “Taxable Benefits” problem is concerned.

The root cause of the unjust and unequal taxation, of persons who participated in their employers Profit Sharing or Incentive (shares) options plans is directly due to classifying an equity, of indeterminate value, as a “Taxable Benefit”.

Using the last or current market trades to fix a value is ludicrous. The next trade could be vastly different – and in fact when the market correction began in July 2000 one could not determine with any degree of accuracy just what price a corporate share might trade for from one trade to the next.

If, in addition to the taxation of non-existent gains, there is further proof required that these equities are wrongly classified one need look no further than the volume of rules and exceptions resulting from Revenue Canada endeavouring to maximize taxes imposed on these shares.

What do you imagine Is the percentage of deferred Capital Gains Income, applied for, via form T1212, due to Shares as compared to all other forms of “Taxable Benefits” .

Do you suppose 99.9% would be out of line? It would actually surprise me if the percentage isn’t actually much closer to 100%

For example is there another item, in the summary of “Taxable Benefits”, that can automatically change from a “Taxable Benefit” to a Capital Equity? (I doubt it.)

All that a victim, of the shares’ as “Taxable Benefits” ‘ rip-off needs to do, to work this magic, is to hold on to their shares past their delivery (exercise) date.

This could happen for a variety of reasons ranging from:- “No Trade, (black-out) Intervals” pending release of company performance reports, -- to a person being away from home, (on vacation), when the shares delivery date arrived

In order for a victim, who was prevented, by circumstances, from selling their shares on their delivery date, to get any form of tax relief, they must appeal to Revenue Canada and pray for a favourable decision.

When a “Taxable Benefit” can arbitrarily become a “Capital Equity” there is no further evidence needed to prove mis-classification.

All that is required to correct this problem is:-

(1) Remove items of variable value, such as company shares, from the “Taxable Benefits” classification and reclassify them for what they really are:- “Capital Equity’s”

Just making this change, now, would prevent any further incidents of this kind of Unfair Taxation.

AND

(2) A truly “Fair and Just” correction, in addition to the shares reclassification, would include cancellation of all outstanding deferred “Taxable Benefits” Income that is based on assumed income from employers shares plans.

This would at least level the playing field for those excluded from the November 2006 cancellation of identical deferred taxable income for JDS employees in British Columbia.

AND

(3) Grant a period of equality adjustment in taxation by allowing person’s who have already paid taxes on imaginary gains to re-submit their tax returns, for all the years in the past decade, where they should have been taxed on “Capital Gains” not phantom profits.
Off hand, (like our Minister of Finance), I can not say just how many billions of dollars this fully corrective, “Fair” and “Just” action would cost – but – it would be a one time cost not an on-going cost – such as the “Federal Ombudsman” fix -- which can go on forever – or until a government takes over in Canada with a true definition of the words
“Fairness” “Justice”, “Honesty”, “Integrity. and “Equality”

Until that Happens:- My advice is:- File your “Request for Taxpayers Relief”
(twice if necessary)

“Take a Number”, then find a comfortable seat.


Victor Drummond ©

Authors comment:- The purpose of this blog page is to raise victim awarenes of how and when they were unfairly taxed -- in the hope they will respond to this injustice and contact like victims via this media. There will be no request made for financial support -- all we are looking for is a greater voice from those unfairly taxed. We all win -- or we all lose by remaining silent.

E-mail:- vic.drummond@sympatico.ca