Connect with us
[bsa_pro_ad_space id=12]

Opinion

The 3Rs are very important, when it’s convenient, when it’s trendy…….

Published

on

If you like this, share it!




  • Reduce, Reuse, Recycle, the 3Rs is popular among people and is tossed out there, often, in the news. When it comes to plastic bottles, bags and straws but not when it comes to cars and neighbourhoods, for example.
    There are a lot of small cars out there and most often it is an economic decision, but not always. You go to any parking lot, even those in front of discount stores and you will see many new, very large vehicles. The 3Rs do not seem to apply to our vehicles, apparently.
    Our neighbourhoods offer another example. We all seem to be clamouring for newer, bigger homes in new neighbourhoods. When I was growing up it was normal to see a family of six living in houses of a 1,000 square feet. Now a family of six is rare but houses of 1000 square feet is rarer, and even rarer still is a family of six living in a 1000 square foot house.
    The 3Rs comes into play when you hit retirement and it is usually a health or an economic decision.
    Why do we march on Parliament Hill to stop using plastic straws and piping oil if we insist on bigger houses and bigger cars?
    History says that we are building on the best agricultural land as we expand our cities with new neighbourhoods. I do not think reducing our arable land or reusing or recycling our farmland into residential neighbourhoods and industrial parks is in the goal of the 3Rs philosophy.
    It seems to me that we pave over 1000s of acres of farmland to build newer homes every year, but we are worked up over how many plastic straws hit our waste management sites.
    Every city has older run down neighbourhoods, ignored or avoided by homebuyers and politicians. Often times they become rentals or the first step on the property ladder, seldom thought about in the 3Rs scheme of things. Focusing on appearances and not on the potential it often easier to build or buy new houses in new neighbourhoods.
    I live in an older neighbourhood, a mid century home, with deer visiting my yard. I have a view of trees and a short walk to the creek. I also have decade old cracks in my sidewalk, a shrub growing in my street. The neighbour’s house sold recently but it was a hard sell and it went for less than it was bought for almost 10 years ago. A realtor mentioned that people want new, modern homes inside mid-century houses. They see antiques and character as simply old.
    So the politicians are only following the wishes of the populace when they abandon the 3Rs, pave over farmland to make room for new homes, new roads and new conveniences.
    Are we only environmentalists when it is convenient and only in trends?
    I do not wish to live in a cave, but I think that there is a sense of disproportionate importance in our lives that needs addressing.
    Maybe the answer is paving new roads out of used plastic bags and straws, and building new houses out of bricks made of compacted trash. Maybe, and this may be unrealistic, we could just reduce the number of neighbourhoods, recycle our old houses and reuse abandoned schools.
    Just a thought.


    If you like this, share it!

    Opinion

    Taxpayers DO have the right to remain silent

    Published

    on

    If you like this, share it!




  • A taxpayer-friendly unanimous Federal Court of Appeal ruling came out this week in MNR v Cameco [2019 FCA 67]. At issue was whether or not the Minister (through the CRA) has the authority to compel oral answers to oral questions from taxpayers or their employees.

    In his ruling, Justice of Appeal Rennie stated “…the Minister does not have the power to compel a taxpayer to answer questions at the audit stage…”, however, it may be in the best interest of the taxpayer to provide reasonable answers to reasonable questions in order to expedite the process. The full entire ruling can be found and read here

    This ruling simply re-confirms, that even in an audit, you (and your staff) have the right to remain silent, and that the Minister’s powers are limited to physical evidence.

    An exception to this is you are required to provide assistance in locating and providing that physical evidence, which may need to be orally.

    Personally, when dealing with a very large number of taxpayers on our own office, we want to be certain that the file that the CRA is talking about is the same file in front of us. As such, we are a firm believer in the Canadian Home Builders’ Association motto that is ironically supported by the Government of Canada: “Get it in Writing.”

    I am not advocating answering no questions, as the Minister (CRA) still has the ability to issue reassessments, thereby shifting burden of proof to the taxpayer further to disprove the reassessment.

    I am, however, advocating at a minimum to get those questions detailed, and in writing. This will help to provide clarity and allow for proper thought in your answers as opposed to stating something with unintended consequences.

    Here is a little example of what happens when you don’t get it in writing: in my dark-side days as a field auditor with the (then called) CCRA, we used to ask prying questions that the taxpayer had no idea they were answering.

    For example, in one particular circumstance I was reviewing a file where it was suggested that the taxpayer was doing under-the-table cash jobs. This meant I would have to be creative in figuring out the taxpayer’s cost of living, and ruling out other sources of income.

    Meeting in a quiet restaurant in a small Saskatchewan town, I was eventually able to have the taxpayer relaxed enough to think that we were having a normal conversation. Just a couple of ‘Riders fans that aren’t a fan of Ottawa, but hey, I have a job to do. When the taxpayer started complaining about the government, I joined in:

    “Hey, I hear you. I’m not some suit from Ottawa. I’m from Regina. I mean both the feds and the province already get enough out of me from tax on my smokes.”

    I don’t smoke.

    The taxpayer didn’t know that, but the anger was timely because the province had just raised up the cigarette tax the previous year so packs were well over $6 a pack.

    “Yeah I know”, the taxpayer said, “I smoke a pack a day”.

    Music to my ears as a tax auditor, the taxpayer just told me that they need ($6 x 365) = $2,190 of after-tax income just to feed their cigarette habit.

    I continued, “That’s terrible! Between getting our money on that, and getting it at the casino, it’s just crazy how much they make it hard to enjoy our weekends.”

    “Yeah, I don’t win nuthin’ at the casino either,” the taxpayer stated.

    To me I heard ‘I didn’t have any non-taxable casino winnings. In fact, the taxpayer likely had lost money in the year. This means the taxpayer needed to have more disposable income to gamble.’

    The conversation continued for a good 30 minutes. Once I was armed with more knowledge of the taxpayer’s lifestyle and spending habits, I went to work. Bank statements, receipts, mileage information, fuel costs, type of vehicle, etc.

    We would use information tools not only from Statistics Canada for price of fuel in different regions, we would also use websites like www.fueleconomy.gov that provide different estimated fuel consumption based on type of use and mileage going back to cars from the 1980s. Then we work backwards to see if the numbers made sense with respect to the taxpayer’s vehicle and costs.

    When it was all said and done, I used the results of our conversation against the taxpayer. When I was finished, I found over $30,000 in an income variance between the taxpayer’s living costs and change in net worth compared to what was reported. Not only that, but the taxpayer had already backed themselves into a corner because of the questions that were answered which I had documented.

    My guess is that in conclusion, the taxpayer thought they should have got the questions in writing instead of meeting me at a restaurant.


    Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html


    If you like this, share it!
    Continue Reading

    Opinion

    Budget 2019 – Poor wording requires 2 ex-spouses within 5 years for Home Buyers Plan

    Published

    on

    If you like this, share it!




  • This is one of those rare times I hope I am wrong in my interpretation, and look forward to being proven wrong by my professional colleagues.

    On March 19, 2019 the federal government tabled its election-year budget. One of the newest and strangest provisions is the ability for people going through a separation or divorce to potentially have access to their RRSP under the Home Buyers Plan.

    Now in my article and podcast entitled: “Escape Room – The NEW Small Business Tax Game – Family Edition” with respect to the Tax On Split Income (TOSI) rules, I made a tongue in cheek argument that people will be better off if they split, because then the TOSI rules won’t apply.

    In keeping with the divorce theme, beginning in the year of hindsight, 2020, the federal government is giving you an incentive to split up and get your own place.

    However, there are a few hoops:

    On page 402 of the budget, under new paragraph 146.01(2.1)(a), at the time of your RRSP withdrawal under the Home Buyers Plan, you must make sure that:

    • – the home you are buying is not the current home you are living in and you are disposing of the interest in the current home within two years; or
    • – you are buying out your former spouse in your current home; and

    you need to:

    • be living separate and apart from your spouse or common-law partner;
    • have been living separate and apart for a period of at least 90 days (markdown October 3, 2019 on the calendar),
    • began living separate and apart from your spouse or common-law partner, this year, or any time in the previous 4 years (ok, you don’t have to wait for October); and…

    …here is where the tabled proposed legislation gets messy.

    Proposed subparagraph 146.01(2.1)(a)(ii) refers to where the individual

    • wouldn’t be entitled to the home buyers plan because of living with a previous spouse in the past 4 years that isn’t the current spouse they are separating from

    “(ii) in the absence of this subsection, the individual would not have a regular eligible amount because of the application of paragraph (f) of that definition in respect of a spouse or common-law partner other than the spouse referred to in clauses (i)(A) to (C), and…”

    The problem with the wording of this provision, is that it is written in the affirmative by the legislators using the word “and”. This means, you must be able to answer “true” to all the tests for the entire paragraph to apply.

    The way I read this, the only way to answer “true” to this subparagraph is if you have a second spouse (ie: spouse other than the spouse referred to) that you shared a home with and you split from in the past four years.

    If you have a second spouse that you shared a home with in the past four years, then “paragraph (f)” in the definition of “regular eligible amount” would apply and the answer would be “true”.

    If the answer is “true” you can then get access to your RRSP Home Buyers Plan.

    If you don’t have a second spouse then, even though “paragraph (f)” might be met, the phrase “spouse other than the spouse referred to” would not be met, and therefore the answer would be “false”.

    This would, in turn, cause the entire logic test of the provision to be “false” and so you would not be able to take out a “regular eligible amount” from your RRSP for the Home Buyers plan because you do not meet the provisions.

    If my interpretation is correct then I would really be curious as to what part of the economy they are trying to stimulate.

    In my opinion the legislation could be fixed with a simple edit:

    “(ii) in the absence of this subsection, the individual would not have a regular eligible amount because of the application of paragraph (f) of that definition in respect of:

    (A) a spouse or common-law partner; or

    (B) a spouse or common-law partner other than the spouse referred to in clauses (i)(A) to (C); and…”


    Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html


    If you like this, share it!
    Continue Reading

    april, 2019

    fri8mar - 30aprmar 85:30 pmapr 30Real Estate Dinner Theatre(march 8) 5:30 pm - (april 30) 10:00 pm

    sat20apr1:00 pm- 4:00 pmMAGSaturday @ the MuseumMAGnificent Saturdays welcomes all ages and abilities to participate in a fun art project every week! 1:00 pm - 4:00 pm

    tue23apr5:30 pm- 7:00 pmLiving Life to the FullCanadian Mental Health Association5:30 pm - 7:00 pm

    thu25apr8:30 am- 4:30 pmApplied Suicide Intervention Skills Training (ASIST)Canadian Mental Health Association8:30 am - 4:30 pm

    fri26apr8:30 am- 4:30 pmApplied Suicide Intervention Skills Training (ASIST)Canadian Mental Health Association8:30 am - 4:30 pm

    sat27apr1:00 pm- 4:00 pmMAGSaturday @ the MuseumMAGnificent Saturdays welcomes all ages and abilities to participate in a fun art project every week! 1:00 pm - 4:00 pm

    mon29apr1:30 pm- 4:00 pmWellness Recovery Action PlanningCanadian Mental Health Association1:30 pm - 4:00 pm

    tue30apr5:30 pm- 7:00 pmLiving Life to the FullCanadian Mental Health Association5:30 pm - 7:00 pm

    Trending

    X