CRA’s proposed VDP changes allows it to continue obfuscating the Income Tax Act (“ITA”), and so continue assessing income tax where, in certain cases, none is owing. Instead of the VDP, explain to Canadians how the ITA really works. Such transparency will result in nearly 100% compliance. Then eliminate the VDP.
Instead of changing the VDP, just explain to Canadians how the ITA really works
Tax lawyer David Rotfleisch’s July 26th, 2017 article in the Globe and Mail summarizes CRA’s proposed VDP changes.
The Department of Finance’s (“DoF”) ITA obfuscation means even tax lawyers and professional accountants do not fully understand it. For example, tax guru Vern Krishna stated in his Jan-Feb 2011 CGA Magazine article, “Tax Simplification is Imperative”, that “the ITA is mind-numbingly complex (and) incomprehensible”. Larry MacInnis, former President of the Institute of Chartered Accountants of Ontario, said in his talk to the Empire Club of Canada, “The Canadian ITA is an unmitigated mess! The reason I say that is because it is incomprehensible!”
“The ITA is mind-numbingly complex (and) incomprehensible“ – Tax guru Vern Krishna
No wonder ordinary Canadians cannot understand the ITA either. That is why thousands participated in tax minimization schemes such as by Demara Consulting and by Fiscal Arbitrators. Around 500 Fiscal Arbitrators participants appealed their gross negligence penalties to the Tax Court of Canada. Another 40,000 or so Canadians participated in abusive charity tax donation shelters. They have either been reassessed with gross negligence penalties, or are still waiting for reassessments. Despite all this, the DoF still refuses to explain how the ITA really works. If they did, these Canadians arguably would not have resorted to such schemes and suffered penalties, divorces, and bankruptcies.
The VDP usually waives prosecution and penalties. However, the proposed VDP changes merely allows the DoF continuing not explaining to Canadians how the ITA really works. Is the DoF maintaining the status quo to increase Canada’s revenue?
Is the Department of Finance maintaining the status quo to increase Canada’s tax revenue?
For example, we have never met a CRA officer, tax lawyer, or professional accountant who has been taught that:
Why the DoF does not teach this to tax lawyers, professional accountants, or CRA officers remains a mystery.
“income is deemed not to inure to the benefit of private persons if such persons are the intended beneficiaries of a governmental program” – Income Tax Act, s.270(1)
We believe most CRA officers are not taught how the ITA really works. However, in 2015, a taxpayer mailed Stephanie Henderson, currently CRA Manager for Offshore Income (and a witness in the FINA Committee Report) our paper theorizing how the ITA really works. (In 2015 she was Manager of CRA’s Special Enforcement Program).
Thirty-nine other Government of Canada officials, including Deputy Minister of Finance Paul Rochon, the Attorney General of Canada, and the Minister of National Revenue also received copies by registered mail. (Rochon’s letter, and the 40 registered mail receipts, are archived at http://bit.ly/2vq5pI8.) Therefore, these Government officers are choosing to continue obfuscating the ITA.
These Government officers are choosing to continue obfuscating the ITA
If the DoF explains to Canadians how the ITA really works, we expect compliance increasing from 92% to nearly 100%. This is because the ITA respects a private person’s private property rights. In addition, that 1936 SCC case also reiterates work is outside federal jurisdiction, since work is a civil right within the Provinces. That is why our theory paper concludes Canada’s individual income tax is a fee for accessing benefits from “public money”. That way, no private property theft occurs, making income tax both legal and constitutional.
If DoF explains all this, then Canadians can knowledgeably decide to keeping their paycheques as private property, or paying the fee (income tax) for accessing benefits through that “office”.
If there is such transparency, then there is no need for a VDP. Then, also prosecute all tax evasion cases.
CRA’s proposed VDP changes allows the DoF to continue obfuscating the ITA and continue unjustly enriching Canada. This is because CRA does not have a form for reporting a private person’s private property, and that also does not convert it into Canada’s “public money”, with income tax then owing. This year is the 100th anniversary for Canadian income tax. After 100 years, the only “right balance to tax fairness” is explaining to Canadians how the ITA really works.
CRA’s proposed VDP changes allows the DoF to continue obfuscating the ITA and continue unjustly enriching Canada
Apu Nahasapeemapetilon, Legalese Interpreter
Click on the top picture to download the PDF of our letter to CRA!