• Jun

    The Perils of Dealing with the Canada Revenue Agency


    Mention Revenue Canada or the Canada Revenue Agency to many a Canadian and you’ll get a blank stare, a shocked look or a mask of fear. Many Canadians are terrified of this government agency and with good reason.

    If you get audited and the audit turns into an investigation, you could lose everything you own. Sound like a nightmare? Despite the promises of income tax software companies, over zealous taxmen make it all too real. Many horror stories abound about the viciousness of the tax man in his pursuit of your hard earned dollars.

    Many Canadians do their best to avoid the Canada Revenue Agency or, if caught in an audit, act like they’re being chased by a bear and play dead. Unfortunately, to the auditor, that means you’re easy pickings and they’ll go after you with everything they have. Far better to be a hard target and fight back.

    If you’re being audited, be prepared for the worst. When an auditor shows up on your doorstep, they’re looking for one of three things: A reason to nail you for a minimum of $15,000.00 in tax, to send you to prison, or both.

    Still, there are some things you can do to protect yourself. If an auditor shows up, don’t let them into your home or business straightaway. That’s a major mistake. Demand proof of who they are (and they should have proper identification). Next, get their card. And before you send them on their way, ask for an itemized list of questions.

    Also, when the auditors want to conduct their audit make sure you have a third party available, such as a lawyer or accountant and only show the CRA what they want to see. Don’t give them free reign with your files.

    Irvin Leroux made that mistake and the CRA took all his files, “lost them,” then demanded proof of his billing and eventually assessed him with a tax bill of one million dollars, which he didn’t owe. Irvin defeated the CRA in court, but their skullduggery wiped him out and he lost 4.5 million dollars in assets. He’s still fighting them to this day, nearly 15 years later.

    If you’ve been paying attention to the media, especially the TV show W5 in the last year, you’ll have seen several documentaries about the CRA and what they’ve been doing to ordinary Canadians.

    The problem with the TV shows is that they make the income tax issues seem like one-time events, as anomalies, when in fact they occur all the time. This is my biggest criticism of the media.

    I once spoke to a reporter about this and she told me that the television stations lack the resources to do an in-depth story that would document the widespread harassment by the Canada Revenue Agency.

    Want to know more about how to deal with the CRA? Check out the book: “The Ten Secrets that Revenue Canada Doesn’t Want You to Know.” Next, read “Tackling the Taxman,” which educates you about your rights when dealing with auditors and how to fight back.

    As I said earlier, the worst thing you can do is to be a soft target, or easy pickings for the tax man. The last thing they want is for you to fight back. If you fight hard enough, they’ll eventually give up and go in searh of easier prey.

    The last book I want to talk about is the best, in my opinion. It’s called: “The Tax Collector’s Bible.” Written by Alan Baggett, a former CRA agent, you’ll learn about the inner workings of the CRA, how income tax is processed and collected, and most importantly, how to avoid paying it. You’ll also learn how to fight back against the tax man and win.

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