APPEALS TO REASON ..

APPEALS TO REASON – Part 5
A series of letters and E-mail messages from Canadian victims
of taxes on phantom income to Canadian Government Authorities, at all levels,
appealing for fair treatment and the, often idiotic, replies they received.

Read: Appeals To Reason Part – 1 (preamble) & Parts – 2, 3,4 for more background information.
By Victor Drummond ©
April 2009

Synopsis of the events to the present

In November 2006 I discovered a member of my family had been levied horrendous taxes, in the year 2000, on money he never received, e.g. phantom income.

When asked did he know of any other people that had been taxed on money they hadn’t received he told me yes, quite a few. So I obtained the name of a co-worker, Mabel D. Lamb who had also fallen victim of Canada’s insidious taxable benefit legislation. (Not the victims real name)

After contacting Mabel, via e-mail, I received an e-mail reply from Mabel’s husband, Arthur, who gave me the beginning of the events leading up to Mabel’s phantom tax and promised to send me copies of some of the correspondence that had taken place between Mabel and members of Canada’s federal government.

Mabel’s Letter to the CRA and members of Canada’s Government is presented in Part 3 of the APPEALS TO REASON series.

Part 4 begins with examples of the incorrect, and incomplete information given to ESPP participating employees of the JDS Optics Inc. Company as it evolved to become the JDSU Corporation in 1999.

Part 5 continues with the replies Mabel received from the office of the Hon Paul Martin Minister of Finance and the Minister of National Revenue et al.

Mabel D. Lamb’s letter was sent in April 2001 the reply, below, arrived in late September 2004.
=====================================

Canada Customs Agence des douanes
and Revenue Agency et du revenue du Canada

Assistant Commissioner Sous-commissonaire

Mrs. Mabel D. Lamb
Street & No.
Ottawa Ont.
Postal Code

Dear Mrs. Lamb
The Honourable National minister of Revenue has asked me to reply to your letter addressed to the Right Honourable Paul Martin, Prime Minister of Canada, concerning you year 2000 income tax and benefit return and employee stock purchase plans (ESPPs)

The office of the Prime Minister forwarded a copy of you letter to Minister of National Revenue in August 2004.
I note your comments concerning the tax treatment of employees who acquire shares under an ESPP: however the value of any benefit that an individual receives by virtue of his or her employment must be included in the individuals income in accordance with the provisions of the Income Tax Act.

The assessment of your 2000 return which included a benefit of $181,898.79 calculated in accordance with paragraph 7(1), (a), of the Act, was confirmed in a letter of July 2003 from the Chief of Appeals Officer.

The Canada Revenue Agency (CRA) is responsible for administering the tax system and applying the current legislation. The Department of Finance is responsible for developing Federal Tax Policy and Legislation. Any proposal to change tax policy or legislation would have to be considered by the Department of Finance, proposed by the Minister of Finance and approved by Parliament.

I note that Mr. Martin’s Office forwarded a copy of your letter to the Honourable Ralph E. Goodale, Minister of Finance so that he may be made aware of your concerns.

I assure you it is not the CRA’s intention to cause hardship to those involved in an ESPP: however, the CRA has a statutory obligation to collect these outstanding balances. I understand you have concluded a mutually acceptable payment arrangement with officials at the Ottawa Tax Services Office.

I trust the above information assists you in understanding the CRA’s position on this matter.


Yours sincerely

Signed
B.J.Slater
Assistant Commissioner
Assessment and Client Services Branch
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If it is not the CRA’s intention to cause "hardship” to those involved in an ESPP: what should an employee of the CRA do when they are informed by someone that the taxes levied on phantom income is creating hardship for the taxpayer?

Furthermore is it not a hardship on every taxpayer to be levied taxes that can only be paid by sacrificing previously existing personal property, of some kind, because there is no supply of income money from which to pay the tax levied? Of course it is.

In the sentence: you have concluded a mutually acceptable payment arrangement with officials at the Ottawa Tax Services Office.

What kind of mutually acceptable payment arrangement is it when Mabel and Arthur have to pay interest on money borrowed to pay the tax on money they never saw?

It certainly wasn’t an acceptable solution for the victims, Mabel and Arthur.
Doesn’t the unfairness and callous disregard for human distress mean anything to anyone in the Canadian government any more?

In the above letter, the Assistant Commissioner, CRA, explains the procedure for changing the tax laws of Canada. It states the procedure as follows:

The Department of Finance is responsible for developing Federal Tax Policy and Legislation. Any proposal to change tax policy or legislation would have to be considered by the Department of Finance, proposed by the Minister of Finance and approved by Parliament.

And the letter goes on to say:

I note that Mr. Martin’s Office forwarded a copy of your letter to the Honourable Ralph E. Goodale, Minister of Finance so that he may be made aware of your concerns.

I would like to review the action the Honourable Ralph E. Goodale took, in response to Mabel’s appeal, to make the phantom income tax situation fair and “Honourable”. There is, however, no letter of reply provided.

Suffice it to say, from the fact that no change has yet been introduced to correct the defective taxable benefit legislation, that the Honourable Ralph E. Goodale did absolutely nothing about it.

In the meantime the following correspondence arrived from the office of the Right Honourable Paul Martin, Prime Minister of Canada:
=======================================

Office of the Prime Minister Cabinet du Premier ministre

July xx 2004

Mrs. Mabel D. Lamb
Street and No.
Ottawa Ontario
Postal Code

Dear Mrs. Lamb
On behalf of the Right Honourable Paul Martin, I would like to thank you for your recent correspondence in which you raised an issue that falls within the portfolio of the Honourable Ralph Goodale, Minister of Finance.

Please be assured that the statements you made have been carefully reviewed. I have taken the liberty of forwarding your correspondence to Minister Goodale so that, he too, may be made aware of your comments. I am certain he will want to give your views every consideration.

Yours Sincerely

signed
L. A. Lavell
Executive Correspondence Officer.

========================================
The above letter says that the Honourable Ralph Goodale has been forwarded a second copy of Mabel’s letter. So let’s examine the response Mabel received from the office of the Honourable Minister of Finance. Wait a moment the next letter is again from the Office of the Right Honourable
Paul Martin, Prime Minister of Canada. We should see some real action this time.
========================================

Office of the Prime Minister Cabinet du Premier ministre

August xx 2004

Mrs. Mabel D. Lamb
Street and No.
Ottawa Ontario
Postal Code

Dear Mrs. Lamb
On behalf of the Right Honourable Paul Martin, I would like to thank you for your correspondence of June xx regarding Employee Stock Option Purchase Plans (ESPP). I regret the delay in replying.

Be assured that your comments have been given careful consideration. As the matter you have raised is of particular interest to the Honourable Minister of National Revenue and the Honourable Minister of Finance, I have taken the liberty of forwarding copies of your letter to them.

I am certain that the ministers will appreciate being made aware of your views.

Yours sincerely

signed

B. Funes
Executive Correspondence Officer

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The July 2004, and the August 2004, letters from the “Executive Correspondence Officers” (ECO) of the Right Honourable Paul Martin, Prime Ministers Office, were signed by two different ECO’s.

I received no further copies of letters of reply to Mabel’s appeal for fair taxation so I feel safe in saying the Honourable Ministers of Finance, and National Revenue did not reply.

As two different ECO’s stated they both sent copies of Mabel’s letter to those same Ministers attention it should also be safe to believe they did receive Mabel’s letter but were much too busy to acknowledge it and much too indifferent to the abuse and mental anguish caused by this unfair and unjust taxation to care.

Obviously no one in Canada’s Government in the year 2004 had any intention of correcting the defective taxable benefit legislation. No one in power cared whether or not Mabel and Arthur lost their home and/or life’s savings so long as the extortion money was paid.

The defective Canadian government and flawed taxable benefit legislation went on wreaking havoc on innocent, hard-working Canadian taxpayers until the federal election in the year 2006.

The Conservative Party, pre-election platform included a plank proclaiming Canadians would be given fair and reduced taxation if the Conservatives were elected.

That may have been the promise that enough Canadians believed because the Conservative Party, under the leadership of the Honourable Stephen Harper, won the election. Although with only enough seats to form a minority government.

Shortly after taking office the Conservative party almost made good on their promise to reduce taxes and provide fair taxation for honest, hard-working Canadians victimized by taxes levied on phantom income.

This New Government’s initial move in this direction was a half-assed deal to revoke taxes on phantom income for a favoured few victims in one riding held by a Conservative Member of Parliament.

For details of this deal and on-going screw-ups in the Conservative government’s “fair tax” initiative read the next posting APPEALS TO REASON – Part 6

Victor Drummond ©