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5 BULLET FRIDAYS - Tax Mechanic News, Tips, Strategies
In this edition: What do you know about the TCC? / Another CRA negligence case / Do you have rental income?
Tax Mechanic
October 27, 2023
Bite size tax and finance related information that could save you $$$
There is a strategy called "tax loss utilization" or "loss buying" to decrease a company’s tax bill. Your loss could be worth money.
Interested? Let me explain... book a call with me here!
What do you know about the TCC?
Established in 1983, the Tax Court of Canada has been a cornerstone of our legal system, serving as an essential avenue for resolving disputes between taxpayers and the Canada Revenue Agency. Over the years, it has emerged as a vital forum for ensuring fair and just adjudication in matters concerning income tax, GST/HST, and other federal taxes.
Initially formed to provide an independent and specialized forum for tax-related disputes, the court has continuously evolved to accommodate the complexities of an ever-changing tax regime. Its judicial decisions have shaped tax policies , have set crucial precedents for similar cases, guiding businesses and individuals in navigating the challenging terrain of tax litigation.
Understanding the intricacies of the Tax Court of Canada is crucial for anyone faced with a tax-related dispute. When should you consider an appeal to the Tax Court? If you believe the CRA has made an error in assessing your tax liability or if you feel that your rights as a taxpayer have been infringed, the TCC can provide an impartial platform for resolving these issues.
In our experience many tax matters can be resolved more efficiently in tax court than putting it forth with the CRA’s appeals department. The process is faster and we have assisted many successful cases. If you have a dispute and would like to explore this avenue, let us review it for you!
5 Tips on running a successful Small Business
Running a small business in Canada can be a fulfilling venture, but it comes with its set of challenges. Let's delve into each 5 tips that can help you navigate the landscape of small business success.
Understand Your Tax Obligations: Familiarize yourself with the Canadian tax system, including GST/HST, payroll taxes, and income tax regulations, to ensure compliance and avoid any penalties.
Build a Strong Online Presence: Invest in building a robust online presence through a well-designed website and active social media accounts to reach a broader audience and engage with potential customers.
Network and Build Local Partnerships: Attend local business events and network with other entrepreneurs to build valuable connections and potentially foster partnerships that can help your business grow.
Prioritize Customer Service: Focus on providing exceptional customer service to build a loyal customer base and encourage positive word-of-mouth referrals, which can significantly contribute to the growth of your business.
Stay Updated on Regulations: Stay informed about any changes in regulations and compliance requirements specific to your industry to avoid any legal issues and ensure your business operates within the boundaries of the law.
Multimillionaire battles CRA over negligence
Money manager Charles Shaker, a British Canadian, has been involved in a 10-year dispute with the Canada Revenue Agency, fighting a nearly $5 million tax assessment, that the CRA failed to notify him of in a timely manner. We have seen many similar cases to date - does anyone remember the Aztec Industries vs The Queen case?
An auditor found in 2017 that Shaker owed $3.8 million in additional taxes for the years 2008 and 2009, along with interest and penalties, increasing the total to $4.8 million. Shaker contends that the CRA neglected to provide proper notice of the reassessment, leaving him unaware of the debt. He is challenging this assessment in Tax Court, looking to have it thrown out.
IRS ramps up taxing the wealthy
We in the North are watching closely as the US wrestles its tax collection challenges. The IRS recently raked in approximately $38 million from top-income earners, bringing the cumulative total for the year to $160 million.
The enforcement campaign comes as a bid to enhance tax compliance among major corporations and affluent Americans and narrow the notorious tax gap estimated at about $600 billion. The Democrats are funding these initiatives along with their health care and climate change spending bill, known as the Inflation Reduction Act, signed into law by Biden in 2022.
This influx of funding has been heavily criticized by the Republicans, arguing that a more robust IRS could potentially harm lower-income Americans.
Is your rental property passive or active income?
Is your rental income active or passive income? What is the difference? Can you deduct expenses such as repairs, energy costs, mortgage interest? Share your thoughts or click to find out more!