Debunking Tax Myths
Posted by TaxSOS December 11 2011
Tagged Under : cra, income tax act, tax law
There are Canadian individuals and groups who feel they do not have to file a tax return or pay taxes. This myth comes from a group of people who convinced the public that for a payment they will give them the information that proves they don’t have to pay taxes. They are taking advantage of the misunderstanding of the individuals that are confused about the tax laws.
Canada is a free and open democracy and every citizen has the right to protest any part of the Constitution and they are free to express their opinions. The Canadian Revenue Agency (CRA) is worried that the individuals who have been fed lies about the laws are now confused and don’t really understand the tax laws at all. This could cause fines, penalties and possibly prison time if they go too long without paying taxes. All Canadian citizens must abide by the Income Tax Act.
The people profiting on the misunderstanding of the Income Tax Act keep the material of lies flowing to people to make money. They themselves probably pay their taxes and file returns, but they are convincing other individuals they have a choice not to. If you have any questions, check with a professional tax accountant or the CRA. Don’t let someone charge you to get you to break the law. It is time that you learn the truth about the Income Tax Act Myths and the Facts. Hopefully the people who read this will get the answers in their case from a professional.
If you find that you have been wrong and have not paid taxes or filed a tax return for a long time there is hope for you, but you have to act on it and take the opportunity you are being given. The government has created a program called the Volunteer Disclosure Program. It would be best to get advice and help from a tax professional when contacting the CRA. All a citizen has to do is contact the CRA admitting that they have not been paying taxes or filing tax returns for a long time. They can do this without the worry about penalties or prosecution. The sooner you take care is best for you. The CRA could become aware of you not paying taxes and then you could be looking at prison time not just the taxes, penalties and fees.
The CRA is hoping that many people who have not paid their taxes will use the program to come clean with them and make arrangements to pay the past taxes. Many Canadians have been misled. This article is for the people who were just doing understand the Income Tax Act and the ones who were deliberately misled by others to profit.
If a person doesn’t cooperate with the employee taxes of the CRA they can force them to lower their taxes or eliminate them completely.
The CRA enforces and administrates the tax laws that are passed by provincial legislation assemblies and Parliament. The CRA does not have the Ability to eliminate, lower, nor have any say in how the money will be spent once they collect it.
Canada has a parliamentary system under which new tax laws and changes to the laws are made by the Department of Taxation under the direction of the Minister of Taxation. Changes in taxation are put in fron of Parliament in the form of legist ration. The House of Commons and the Senate must pass a law for it to become law. The CRA also collects taxes passed by the provincial legislation assemblies.
The CRA and its employees are subject to the law. If you feel that they have failed to respect your rights or have acted without authority you have a right to address the issue with the courts.
The Income Tax Act only applies to corporate entities not human beings. The Common Law rights going back to Magna Carta makes all taxes on citizens voluntary.
The court rejected these myths. On August 31, 2000, the Ontario Supreme Court of Justice issued a ruling that the Income Tax Act did include persons. The judge found that in s. 248(1) that the Income Tax Law did include both a natural person and an entity other than a person. He said that it also stated that the applicant is a person and a taxpayer. All persons were obligated to file income tax returns and pay taxes. The judge also found that no where did it state that paying taxes were voluntary.
A number of groups of people are promoting the idea that it is legal for a person to declare they exempt form taxation. Believing those individuals could cost taxpayer penalties, fees, the original tax, and imprisonment. An individual needs to consult a professional in taxes or the CRA if they have any questions about any information that they have heard from others.
Some individuals say they are exempt from GST/HST and they have a card to prove it.
The GST/HST legislation does not state that there is any individual allowed to be tax exempt. If a person’s status is Indian they may be tax exempt from paying GST/HST taxes under certain conditions under the Indian Act. Any card that a person has is a fraud.
A person can make tax-free withdrawals for their self-directed RRSP.
If a person uses any part of their Registered Retirement Savings Plan (RRSP) it becomes taxable income. There are people who run schemes that will tell you that you can use part of your RRSP to purchase stock in a private company and then they will loan it back to you at a low or no interest loan. Once you use the RRSP funds they become taxable income.
The CRA sends emails to conduct e-audits.
The CRA does not use email to inform you of an e-mail. There is no such thing as an e-mail. The person sending the email is running a scam to get your personal confidential information most likely for use in an identity theft scam. Do not ever give anyone your confidential information unless you know who they are and there is a purpose. The CRA wouldn’t ask you for that information in an email.
Winners of the lottery or sweepstakes in Canada have to pay fees and taxes to the CRA before claiming their prizes.
When someone wins the lottery or sweepstakes in Canada, they do not have to pay any fees or taxes. If you get any email saying you have won an amount of money, but you have to send fee to get, you should call the police and the Royal Canadian Mounted Police. It is scam.