CANADIAN VICTIMS..

CANADIAN-- PHANTOM INCOME TAX VICTIMS – NEED NOT APPLY

The Federal Conservative Party has made great promises to all Canadian citizens –
telling them many times and in many ways of the party’s “Action Plan” to provide “fair” and “equal” treatment under Canadian “Income Tax” laws.

In 2005, when the Federal Conservative Party (FCP) was still the “opposition” party in Canada’s House of Commons they spent a small fortune on media ads telling Canadian citizens how corrupt the Federal Liberal Party (FLP) was and how if elected to form Canada’s government they would make everything better.

They were going to crack down on Canada’s loose system of justice and get tough on repeat offenders.

They were going to introduce amendments to Canada’s personal and business taxation system – to bring fair and equal treatment – under Canada’s tax laws – to all honest, hard working Canadians.

They were going to: “enact legislation to ensure that full, just, and timely compensation will be paid to all persons who are deprived of personal or private property as a result of any federal government initiative, policy, process, regulation or legislation.” Reference “Conservative Party of Canada Federal Election Platform 2006” – “STAND UP FOR CANADA BROCHURE” page 43. “The Plan.”

On January 30, 2007, The Honourable James M. Flaherty, Minister of Finance, made the following statements while addressing the House of Commons, Standing Committee on Finance (FINA).

The Title of this address is:
“MINISTER OF FINANCE STANDS FIRM ON TAX FAIRNESS FOR ALL CANADIANS”
Ref: url: http://www.fin.gc.ca/n07/07-007-eng.asp

“Make no mistake, the decision that was taken on October 31st is all about fairness.”

“Fairness for Canadian taxpayers and their families who would be asked to pay more and more.”

“Fairness within the corporate sector, where the current rules give income trusts a tax advantage and distort investment decisions.”

Fairness for Canadian taxpayers, who are seeing tax dollars sent out of the country to foreign investors; and
Fairness for all Canadian governments, federal and provincial, who are experiencing a significant loss of tax revenue.”

And in his concluding remarks Flaherty said:

It is not tax fairness if it is only for a few.” “And it is not strengthening the economy if the playing field is not level for all businesses.”

So what about “Tax Fairness for all Canadians”?

The events -- surrounding and following the Tax Remission Order (TRO) requested by the Honourable Gary Lunn, CP, MP, for the riding of Saanich – Gulf Islands, British Columbia, prepared at the request of the Honourable Carol Skelton, CP, MP for the riding of Saskatoon-Rosetown-Biggar, Saskatchewan, and approved by The Right Honourable Stephen Harper, Prime Minister of Canada and also signed by Her Excellency Michaelle Jean, Canada’s governor General -- tell it the way it really is.

When signing this TRO her Excellency said: “I do so in the best interests of all Canadians.”

Many Canadians who were fortunate enough to have been employed in the communications field -- during the years of the Hi-Tech boom, i.e. 1985 to 1999 – were also unfortunate enough to have participated in the government sponsored “Fight the Brain-Drain” projects which supported corporations implementing “Incentive Share Option” (ISO), “ Employee Share Option” (ESO) and “Employee Share Purchase Plan” (ESPP) plans.

Both Canada and the United States of America (USA) enacted legislation to capture the taxes that would be generated by these ISO, programs while the shares of communications corporations were increasing in value on the worlds stock exchanges.

All went well until the Hi-Tech Stock Market Boom went BUST in mid year 2000. Then the defects in the USA “Alternative Minimum Tax” (AMT) legislation and the Canadian Taxable Benefits legislation (CTB) were triggered.

Honest, hard-working, taxpayers suddenly found they were being levied taxes on purely theoretical , might-have-been, money which generated tax levies that often exceeded the taxpayers gross annual income by as much as 1000 percent.

Individual victimized taxpayers in both Canada and the USA appealed for tax relief for years between the year 2001 and 2009 without success and grass-roots lobby groups sprang up in both country’s and began making organized appeals for tax fairness.

In Canada the Gary Lunn TRO was enacted and gave the promised “Fair” taxation relief to a total of 37 victimized Canadians. Our Prime Minister, The Right Honourable Stephen Harper, was quoted as saying: “we’ll get it resolved – it will take a change of code” when asked if the same tax relief would be extended to “All Canadians victimized in the same way.”

In October 2009 the USA government amended their defective AMT – revoked all related outstanding taxes and penalties and provided a means of fairly compensating American victims who had already paid taxes and/or penalties.

As of today Canadian victims -- of taxes levied on phantom income -- are still waiting for their tax on phantom income to be “resolved” and the promised “fair taxation for all Canadians” to be fulfilled.

Why?

After so much rhetoric on the issue of “Fair Taxation for all Canadians” by the government now in power?

What happened after our Honourable James M. Flaherty made the grand announcement of an “Updated Bill of Taxpayers Rights” in May 2007.

Nothing happened as far as Canadian victims of phantom income tax is concerned.

Why not?

Perhaps the answer to that question is to be found in the statements made by his Honour Judge Donald Bowman, a chief justice in “The Tax Court of Canada”, when asked about the Gary Lunn TRO.

Reference: http://www.gowlings.com/resources/enewsletters/taxationlaw/Htmfiles/V1N97_20070208.en.html

Justice Bowman is quoted in the Feb. 2007, issue 97, Taxation Law @ Gowlings, as saying:

“In the wake of political pressure, the CRA has apparently relented from its initial refusal to grant relief to the affected JDS workers, and agreed to refund all taxes and interest paid. The natural reaction to this is, of course, "what about the rest of us?". A spokesperson for CRA has indicated that the CRA will not be granting such relief to other taxpayers who may find themselves in similar circumstances.”

“Most taxpayers would consider the CRA's stance on this issue to be patently unfair. However, absent further political pressure, or legislative amendment, taxpayers would probably be surprised to learn that Canadian courts have generally refused to recognize a duty of consistency on the part of the CRA in the course of administering and enforcing the Income Tax Act, and have expressly held that the CRA has no positive legal obligation to treat similarly situated taxpayers consistently.1 As stated by now Chief Justice Bowman of the Tax Court in Harvey v. The Queen:”

“The Minister's obligation is to assess in accordance with the law. It would throw the administration of taxation in this country into chaos if the Minister were bound by every private deal he made, whether in accordance with the law or not.2”

Is this the same Justice Donald Bowman who declared in his ruling in the case of: “The executive that hates golf.” that: “where no benefit has actually been conveyed to the employee it does not matter what cost the employer expended to confer a benefit to the employee there is no benefit to tax.”?

There is a government document with the title: “Serving Canadians – Canada’s System of Justice”

Reference: http://www.justice.gc.ca/eng/dept-min/pub/just/img/courten.pdf

If Justice Donald Bowman is correct in saying: “Canadian courts have generally refused to recognize a duty of consistency on the part of the CRA in the course of administering and enforcing the Income Tax Act, and have expressly held that the CRA has no positive legal obligation to treat similarly situated taxpayers consistently.” then the document: “Serving Canadians – Canada’s System of Justice” is null and void and the Conservative Party Action Plan to provide “Fair and Equitable Taxation for All Canadians”, is a farce.

For Canadians -- who have been financially decimated by horrendous taxes on money never seen – to attempt to use Canada’s courts or the newly created “Taxpayers Ombudsman” to obtain “fair” tax treatment is a crap shoot.

When it comes to obtaining the promised: “Fair and equal treatment” under the tax laws of Canada" – victims of taxation on money never seen – NEED NOT APPLY.”

If Canadians really want the Government we all deserve then let your riding Member of Parliament know that you demand -- the victimization of fellow Canadians on the pretext of phantom income being a taxable benefit – be stopped NOW and our defective taxable benefit legislation be corrected to exclude equities “purchased” within an ISO, or ESO or ESPP be treated as a conventional stock purchase -- not as a taxable gift or award – which it never was and never will be.

See you at the voting polls in the next Federal Election O’Grady.

Victor Drummond ©