Triple threat tax fraud targeted by the Canada Revenue Agency Minister Blackburn declares

New release on CRA website: http://www.cra-arc.gc.ca/nwsrm/rlss/2009/m01/nr090123-eng.html

Ottawa, Ontario, January 23, 2009... The Canada Revenue Agency (CRA) has launched a Web page dedicated to Project Trident, a nationwide enforcement and awareness project that targets three types of illegal activity: identity theft, charities‑related fraud, and tax preparer fraud. This Web page will help Canadians recognize tax fraud and learn how to protect themselves against it.

"Project Trident is a hard-hitting CRA project that protects the tax base by prosecuting players in fraudulent tax schemes and reassessing tax returns," said the Honourable Jean‑Pierre Blackburn, Minister of National Revenue. "We have had good results in prosecuting the people who perpetrate these activities, and have reassessed a significant number of returns," added Minister Blackburn.

There are currently over 70 cases that make up Project Trident in various stages of investigation. In addition, there have already been 13 convictions, resulting in over $1.8 million in fines and a total of 210 months in mandatory jail time.

"The three types of illegal activity are often used in combination," indicated Minister Blackburn. "Many of the cases involving tax preparer fraud also involve charities-related fraud or identity theft. For example, some unscrupulous tax preparers sell false receipts for charitable donations to their clients. Others commit identity theft by using personal information from legitimate clients to file fraudulent tax returns."

Charities-related fraud can be committed on its own, without involving identity theft or unscrupulous tax preparers. For example, a charity could be set up to sell inflated tax receipts, but perform little to no charity work.

The CRA audits charities to put a stop to such fraudulent schemes and intends to prosecute tax preparers, directors of charities, and donors who are found to be involved.

The CRA is on the lookout for identity theft. As soon as the CRA confirms that taxpayer information has been compromised, we do everything necessary to prevent the fraudulent use of that information.

Visit http://www.cra-arc.gc.ca/projecttrident/index.html to find out more about these types of fraud, to see a summary of convictions, and to stay up to date on the fines, jail time, and reassessments in these cases.

Gong Xi Fa Cai!

Happy Chinese New Year! Gong Xi Fa Cai!

Wishing you a happy and prosperous new year! The year of the Ox.

Automobile benefits on-line calculator

Don't know how to calculate your automobile benefits? Do not worry!
The CRA just announced the 2009 automobile benefits on-line calculator effective Jan. 1, 2009.

Here's the link: http://www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/bc-eng.html

Remitting GST/HST on Taxable Benefits

Did you know that GST/HST must be remitted on a taxable benefit unless the benefit is tax exempt or zero-rated, for example the benefit on low-interest loans? An example of a tax benefit that is not exempt includes the automobile standby charge and operating expense benefit. GST/HST must be remitted on shareholder benefits if they fall into Subsection 15(1) and are not tax zero-rated or tax exempt.

The amount of GST to be remitted for taxable benefits is 4/104 of the benefit amount or 12/112 of the benefit amount for HST participating provinces. Taxable benefits for automobile operating expenses are taxed at 3% of the benefit amount or 9% for HST participating provinces.

Non-taxable allowances based on kilometres driven are eligible for the GST/HST input tax credits (ITC) claimed by the payor. The ITC is equal to 5/105 (GST) or 13/113 (HST) times the allowance.

How do you become a winner in this recession?

No doubt, it is not an easy time for most of small business owners. The Chinese character for “crisis” consists of two symbols. One means “danger,” the other “opportunity.” While making a strategy may be more challenging during recessions, if you grasp the nettle, opportunities will arise to enhance your business.

As a business owner, it’s the right time for you to:

1. Tidy up your books
   By having up-to-date information, you will be able to know your position so you can make better business decisions. Ask your accountant to help you to bring your bookkeeping up-to-date and keep it current.


2. Save money from paying too much on taxes
   It is not uncommon, many businesses pay too much on taxes. Having a tax planning is the best way to reduce your taxes. Get help you on tax planning so no more paying too much and no more penalties.


3. Know how your business compares to others
   Are your advertising expenses high? How about rent? How do others in your business pay? Ask your accountant to help you to know how your business compares to others in your industry. We have our exclusive product, called "Padgett Reality Check"


4. Improve your cash flow & liquidity
   Having a good cash flow is becoming very important during this rough time. Decrease your overhead cost, get rid of unproductive assets and negotiate with your vendors for longer term. Your accountant can advise you on how to improve your cash flow & liquidity.


5. Be more focused on your business
   Your business needs you more than ever. Let your accountant take care of your accounting, tax and payroll.


6. Be willing to make changes
   It is not easy but do not be afraid to make necessary changes.


7. Get advice from experts
   In running your business, you may face many issues. Some of which you know the solutions to, but some you don’t. Find someone who is expert in accounting & tax, and who is always here to answer questions and offer sound advice that gives you the competitive edge.
   
   Do not let this recession bring your business down! Be a winner!

New Year's resolutions

It’s a beginning of the year again. The New Year is a good time to make resolutions.
Here’re some of the Top Ten New Year’s resolutions, according to About.com:
1. Spend more time with family and friends
2. Enjoy life more
3. Get out of debt
4. Learn something new
5. Get organized

What’s yours?

As small business owners, at the beginning of the year we are hoping that our business will be better than last year. We realized that we made mistakes last year and this year we make a promise not to make those mistakes again. It’s good! But how?

Say, we want to spend more time with family. How do we get more time? There are 24 hours in a day and it’s given. We cannot change it, can we? So How?

One of several things that you can do is let someone else does your clerical works. For example, let your accountant do your bookkeeping, payroll and tax remittances. By doing this, you will get your time back so you can fully concentrate on running your business. Not only that, but also you will be getting more accurate and reliable information so you can make better business decisions. You most likely will be able to save money, i.e. no more late penalties, etc. The bottom line your business will become more profitable.

Sounds good? Yes.

If you do not have accountant, go find one. There are so many accountants out there. But, please be careful in choosing your accountant. Make sure they provide all services you need, such as accounting, payroll and tax. So you do not need to deal with different company for different services. Dealing with one person is better than with two or more. You will save time, money and get better advices. I would recommend that you hire an accountant that suitable to your business that is specialized in small business, and can help you on tax planning.

How about if you already have one?
Do you meet them regularly, i.e. every month? Are they accessible whenever you need them? Do they provide all the services you need? Do they treat you as a number or as their business partner? Are you satisfied with their service? Etc...etc.....

Do not be afraid to change your accountant! I am sure you must have goals and objective when you start your business at the beginning. Therefore, if your accountant cannot help you to achieve your goals, do not feel bad if you have to fire your accountant. It is similar when you have to fire you employee because he/she is not productive or does not perform well.

Again, we are in the beginning of the year. It’s not too late to make a plan and make some necessary changes so your business can be more profitable.

Happy New Year!!!

Happy New Year to you!

May the year 2009 brings in Success, Happiness and Prosperity for you!

And..many more opportunities for us to work together in the year ahead!