Tax avoidance is lawful in Canada. The Supreme Court of Canada has confirmed this in recent years on several occasions and certain tax avoidance programs are specifically defined in the Income Tax Act. So why has one powerful individual within CRA made it his personal goal to destroy all gifting arrangement tax shelters, regardless of their compliance with the law or not. We’re referring to David Duff of the Tax Shelter Audit Dept in Ottawa. Mr Duff , along with the CRA, is being sued for $245 million as a result of his actions. You can read the full statement of claims against the CRA and Mr Duff in the Equigenesis Application. This is long but fascinating reading that tells a sad story.
Mr Duff is also responsible for the CRA protocol that PGC has been fighting for almost two years now, namely withholding taxpayer assessments for two years, waiting on the audit. A class action mandamus action has been filed in Federal Court by Ms Rose Rae on behalf of herself, and all the other taxpayers who have been wronged by this protocol in 2013. You can see the Rae Application Here. PGC applauds Ms Rae for her courageous action.
Additionally, individual applications have been filed in Federal Court for the same reason. One of them was filed by Robert McNally You can see the McNally Application HERE PGC also applauds Mr McNally for his efforts to defend his rights against the CRA abuse.
One case the Federal Court has already decided is the Ficek case. Alice Ficek wanted to have her tax return assessed, rather than wait two years, so she took CRA to federal court and won. The judge specifically indicated that he thought other tax payers might be in the same situation so he continued to issue his decision, even after CRA did issue the assessment to Alice Ficek. It is astounding to see the CRA completely ignoring this case and continuing on with impunity. See Judge Phelan’s Ruling
These are not the only actions taken by taxpayers to protect their rights, just a sampling. It is becoming increasing difficult to deal with the CRA and the manner in which it responds and communicates with its customers... the taxpayer. The CRA commissioned an internal report that also concluded that its communications were often “gobbledegook and impossible to understand”. Look at the Article Written by the CBC. Taxpayers, as a result, seem to be resorting more and more to the Courts to deal with what they feel is abuse.
Not only is it so often difficult to comprehend the gobbledygook from CRA, there are often cases where the information is simply not correct. This is especially true when CRA is trying to deter people from doing something, such as their campaign to destroy registered profitable gifting arrangements (RPGAs). Their repeated Alerts regarding gifting tax shelters claim they have never found one that complies with the Income Tax Act. This is blatantly not true. PGC can name at least two RPGAs that have passed CRA audit in the past and taxpayers have not been reassessed and CRA is now statue barred from reassessing. Today, however, all RPGAs are the subject of the CRA deterrence protocol, regardless of their previous audits. CRA has declared war on them all. Fortunately for us taxpayers, it is not the CRA that will have the final say on anyone's tax position. It may well end up being the Courts and the law of the land.
Profitable Giving Canada (PGC) exists with a mission to help and assist individuals who participate in Profitable Giving. The recent explosive growth in PGC membership and subscriptions is another testimony of the growing need for the average taxpayer to have a place to go to for help when confronted with gobbledegook and worse. We are committed to doing whatever we can to support and help our members going forward.