In Canada, there are approximately 30,000,000 tax filings annually, including personal income tax, corporate tax, commodity tax filings, employee source deduction remittances, sales taxes, and so on. That’s a lot of paper — and a lot of denuded forests — to ensure that we pay what we’re supposed to, according to the rules made by people who care more about how much they’re collecting than where the money is going.
It appears that these collection agencies love to make a tremendous splash by going after big fish. Again the message is clear: If we can get them with all their resources, then we can certainly get you!
The IRS went after singer Willy Nelson for back taxes after disallowing certain tax shelters in which he invested on the advice of his accountants from a prestigious, national accounting firm. Poor Willy, he had to go back ‘on the road again’ to pay off his debt. It was international news, and the message was, no one, not even Willy Nelson, could evade the clutches of the IRS.
Canada Customs and Revenue Agency (CCRA), formerly Revenue Canada, has disallowed tax shelters. In one particular case, a client had invested in a tax shelter on the advice of his former accountant. Years later it was disallowed. The investors, and there were hundreds, had been duped by promoters who were subsequently jailed for fraud. The promoters had set up a yacht charter business in the Mediterranean, and based on glossy promo material, had lured in millions of dollars. The only problem was there was no boat and no business, nothing but a sales pitch. I was able to help my client negotiate a workable settlement with Revenue Canada but not before they garnished his bank accounts, put a lien on his home and advised his employer that he was delinquent for almost a hundred thousand dollars of taxes and penalties. To my knowledge, some of the other investors are still fighting with Revenue Canada, trying to get justice by attrition, but they are being worn down by a machine with unlimited time and resources leaving investors with no place to turn. To be fair however, after meeting with a person from the CCRA and putting a face to the tax debt, I generally find the people at CCRA reasonable and fair. We can usually work out an acceptable arrangement in which CCRA gets what they feel they’re owed without strangling the golden goose.
So keep things in perspective. Sometimes we’re shown images of what the sender wants us to believe, not necessarily the way it really is.
Currently Martha Stewart is making headlines of a similar sort. She is being hounded for mitigating her stock losses on the basis of inside information. Are they trying to get her because of what she is alleged to have done, or because of who she is and therefore how much media attention they can generate? Are they being fair and impartial, or are they looking for another picture on a wanted poster that they can milk for the next fifty years?
Personally, if guilty of any crime, I believe Martha Stewart should be imprisoned for stupidity and blind advice. How stupid that with all her money, prestige, and power she would risk her credibility and squeaky clean image, for an amount of money that’s probably less than what she spends annually on wine! It rings true, that the bigger one gets, the larger a target one makes. I subscribe to Warren Buffet’s philosophy that the bigger one gets; the cleaner one needs to stay. The larger your business, the easier a target you become, so you need to avoid anything that will tarnish your image or credibility. There isn’t enough money in the world to ease the damage done by acts of greed in moments of temporary stupidity. It’s like robbing a bank. You can’t take out enough money in a hold up to compensate for the risk and endure the cost of evasion should you be lucky enough to escape.
Meanwhile, I’m sure Martha will agree, there’s something to be said for living under the radar! I’ll bet she wishes she were back in her kitchen, instead of being in the cooker.
