APPEALS TO REASON ..

APPEALS TO REASON – Part 7
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, 3,4,5,6 for more background information.
By Victor Drummond ©
April 2009

Synopsis of the events to the present

Part 1 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 victim’s real name)

Part 2 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.

Part 3 Mabel’s Letter to the CRA and other members of Canada’s Government is presented.

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.

In the federal election of 2006 the Conservative Party was elected on the promise of fair and reduced taxation with their slogan “STAND UP FOR CANADA”
Read APPEALS TO REASON Part 7, below, to see how that “Fair Tax” promise was perverted.
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Even before the article: “What about the Rest of us?” appeared in the National Post the following article by columnist Cindy E. Harnett, appeared in the Victoria Times, Colonist newspaper:
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Stock fiasco victims to get tax refunds
JDS workers were forced to pay huge sums on profits they didn't receive
Cindy E. Harnett, Times Colonist
Published: Wednesday, December 20, 2006

A group of debt-ravaged former employees of JDS Uniphase, crippled by massive tax bills on phantom stock profits, will receive full refunds of the taxes they were "unfairly" forced to pay, Conservative MP Gary Lunn announced yesterday.

"It took a change in government to get someone to listen, but the prime minister has come through and delivered tax relief," said Lunn. "It's not in the interest of government to tax people on money they never saw."

The Saanich-Gulf Islands MP said the government is offering immediate tax relief to all former employees who participated in an employee stock purchase plan and paid hundreds of thousands of dollars in taxes on money they didn't receive.

Lunn, minister of natural resources, said the government also plans to introduce changes to the tax system in the new year so that no one else is unfairly penalized by the technicality.

The nightmare began for dozens of JDS employees in 2001 when they were told they owed taxes on their JDS stocks based not on the price of their holdings at the time, but on the value of the shares from when they were issued -- a huge difference given the period in question spanned a dramatic rise and fall of the shares.

Workers acquired shares through a 1998 offer allowing employees of the company, then SDL Optics, to buy shares of the company for $2.86 each.

Two years later, when shares in that program were issued, California-based JDS Uniphase had bought the company and the value of the purchased shares had soared to more than $300. Unlike JDS workers in the U.S., however, the workers here were taxed on the stock's worth at the time of issue rather than when employees eventually sold them. Many employees didn't sell at the high point, and instead held on to the shares as they plummeted, meaning they were left not only with huge tax bills, but also with shares that had become virtually worthless.

JDS, which had a plant in Saanich, made fibre optic communications equipment. It closed its plant here in 2001.

Tim Couch, 38, who remortgaged his house twice and took out a line of credit to pay his tax bills, was elated at the news but still guarded. He was forced to pay about $50,000, he said.

"There's surprise, shock, whatever," Couch said. "It sounds like a bullet-proof plan's in place but I'm still cautious

"It would have been easy to forget about a small group of misinformed investors on the West Coast but thankfully we had Gary Lunn in our backyard," Couch said.

He assembled fibre optic equipment at JDS, and was unemployed for a year after he was laid off. Couch is back at work now in a similar job.

Diana Couch, 65, babysits her two grandchildren because the family can no longer afford day care. "We're all just beaming from ear to ear," she said. "It's affected all of us . . . it's been a rough time."

The Conservative government promised to help and delivered, said Lunn, who spent several years lobbying on behalf of the workers.

Prime Minister Stephen Harper, during an election stop in Victoria in December 2005, told the Times Colonist: "we'll get it resolved" and that changes to the federal tax code were necessary.

Former Liberal Prime Minister Paul Martin in an election stop at Victoria's airport in June 2004 made a similar promise to "fix that" -- but it never happened.

"It's difficult to fight with the government," said Andre Rachert, a Victoria tax lawyer. "After five or six years of glacial movement hopefully we're done now."

ceharnett@tc.canwest.com

How’s that again Gary? Did you say: "the government also plans to introduce changes to the tax system in the new year so that no one else is unfairly penalized by the technicality".

Really? Where did you get that extremely false impression? Which “new year” were you talking about?

Several “new years” have gone by since, you made that comment, and not one additional victimized Canadian taxpayer has been granted relief from the penalties imposed by that so-called technicality.

Not one word of the of Canada’s defective “tax system” has been changed “so that no one else is unfairly penalized by the technicality.”

Was the Honourable, Carol Skelton also given the impression that her government intended to introduce changes to the tax system: “so that no one else would be unfairly penalized by the technicality.”?

It must have come as a shock, and betrayal of Carol Skelton’s ethics and integrity, when her leader, Prime Minister Stephen Harper, failed to fulfill that commitment and instead made her a party to a scam designed by “senior bureaucrats in Canada’s Revenue Agency (CRA) and Department of Finance” to deceive all trusting Canadians into thinking they were finally getting the fair tax deal promised in the conservative 2006 pre-election “STAND UP FOR CANADA” promotions.

Sorry, Andre, “were not done now”.

As Winston Churchill said, while Prime Minister of Great Britain, at a time when the Allied armies were preparing to carry the war back to continental Europe: “This is not the end.” “This is not even the beginning of the end.” “This is only the end of the beginning.”

In APPEALS TO REASON – Part 8: Find out what happened when two of Canada’s Prime Ministers, declared their intentions to correct Canada’s defective taxable benefit legislation, and application policy, to put an end to penalizing honest, hard-working Canadians with taxes levied on phantom income.

Victor Drummond ©