webfolk

If you or your corporation owe the government for unremitted HST, you want to pay attention to this. A fellow owed the government money. He sold his personal house. The mortgage company got their money and he applied the balance towards his outstanding HST balance. The CRA challenged this feeling they had higher priority than the bank. The CRA won. The bank had to take some of the proceeds used to pay off the mortgage and pay off the CRA balance.

Do you think the bank is going to change their paperwork as a result of this? I suspect loans and mortgages will be conditional on HST and payroll remittances being current.

An accountant applied a commonly used tax strategy for a taxpayer. One condition of this strategy is that it cannot be used BEFORE the end of the year. The accountant missed that one point, and because of this mistake, the CRA assessed a tax of almost $180,000. The CRA would not allow the accountant to fix this mistake so it went to court.

The judge determined there was no wrong doing other than the mistake of applying the strategy a bit too soon. He concluded that allowing the problem to be fixed was fairer than the CRA’s proposed alternatives.

A solely owned corporation performed services for a customer over a two year period. The owner pocketed the money and did not report the revenue nor the GST collected. CRA learned of this and reassessed the corporation for collecting the revenue and not remitting the GST. 

The taxpayer had to pay the income taxes on this money AND the GST that was collected. Penalties of 100% of the income taxes evaded and the GST not remitted were applied.

The taxpayer was sentenced to 12 months in jail if he did not pay the CRA $837,859. Another 12 month sentence was ordered if other certain conditions were not met.