Michel Chevalier(18) TaxAction Log in to become a member of Michel Chevalier's Fan Club!
Carl Sagan said, "One of the saddest lessons of history is this; if we have been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It is simply too painful to acknowledge even to ourselves that we've been so credulous."
Hello Dear Reader! This is the first of what I hope will be many columns. It is my fondest wish that through this vehicle I will be able to share with you some of what I have learned along the way and so help to de-bamboozle the subject of income tax in our very highly taxed country.
I should, right now at the outset, make it quite clear that I am not an expert, self-proclaimed or otherwise, but rather a person who has gained a fair bit of life and business experience, and who, because of an on-going desire to learn, would like to share and teach, illuminate and elucidate, proclaim and expound on the subject of income tax and the reduction thereof, and such other matters relating to small and medium business as I may be permitted to address (this is really why, you see, I have snuck the'Other Matters' into the title of this column).
I came from many years of working in the field of trade association management to starting and running my own service business with a partner. At the time, several years ago, after 7 or 8 years in business, we were doing nearly 1 million a year in sales with 10 full-time and a dozen steady part-time employees; we had incorporated, which was a mistake, and we had chartered accountants doing our books and tax returnsand I didn't know a thing about taxes! I had a strong feeling that I was paying too much tax and I just had a feeling that I wasn't getting all the help that I could or should from our accountants. They were good accountants and did help us in some waysbut not when it came to taxes.
To shorten the story, I found a small company that had a different approach to tax and became a client; 8 months later I became an associate and now I am a tax consultant on my own working to educate and help people reduce their taxes and deal with Canada Revenue Agency (CRA) audits and problems.
Now that I have, in a general way, set the stage as it were, and we are all quite clear that I have no credentials but myself, let us turn to the subject at hand income tax.
Income tax has been made in to a complicated subject and unnecessarily so I think this is part of the bamboozle. There is no one person expert in all areas of taxation. I would venture to guess that the closest thing would be a small and select group of gnomes buried in the bowels of CRA who have learned how to manipulate and control the system pretty effectively to ensure that as much money as possible defaults to CRA, the biggest collections agency in the country.
Over the years, and on different occasions, tests have been undertaken that show just how much grey there is in the tax system. In one such test one persons' tax return for 1 taxation year was given to 10 tax preparers the result was 10 different tax returns. This is not a good thing! Most especially it is not a good thing for the taxpayer. I mean, if trained tax preparers and accountants can't agree then where does that leave most of us? I know that when I had my own business prior to becoming a tax consultant, I didn't know what I didn't know and I didn't really know where to go to find out.
If I am permitted to continue this column I will very much look forward to sharing what a previously untutored taxpayer has learned. I will shed some light on how CRA operates and what mechanisms are in fact in place should a taxpayer disagree and wish to take issue with CRA. I will even, I hope, get the message across that it is a good thing to take issue with CRA, when you feel you have a case. Contrary to popular belief it is better to fight than simply write a cheque to make them go away.
If you're right you are rightand guess what? CRA's job is to collect money. If you simply pay them whatever, whenever they ask, they will come back for more. On the other hand if you make it difficult and time consuming and you have a case, and you take the time to make your case, you will more than likely save yourself some money over time thereby making it time well spent.
I will be writing about the best way, in my view, that anyone can use to reduce taxes which is to be in business or to have your own business. All of you real estate agents and brokers are in business and until you are making a great deal of money and can afford the expense of tax accountants, tax lawyers and trusts etc., the absolute best thing you can do is to grow your business, maximize your income and do everything you legally can to deduct legitimate business expenses money you spend to generate business income.
It is my strong intention to take the bamboozle' out of tax by sharing with you the knowledge I have gained, that we all should have received as part of our schooling. Knowledge gained by working with clients, all the way through the various objection and appeals phases with CRA to helping represent them in tax court, and helping to win. All this to say that what you will be reading is based upon direct hands-on experience with what works. I look forward to the journey.
Michel Chevalier has many years of business experience combining over 20 years managing multiple trade associations representing several dozen industries; building his own small business from the ground up and more recently as a consultant specializing in helping individuals and small business significantly reduce taxes by implementing legal business strategies; and as well, representing clients in audit and other difficult situations with Canada Revenue Agency (CRA). Email: michel@taxaction.net
Wow! I too research and do my own taxes. Few do - and your opening quote is priceless - I'm in the US and our tax system is similar - slanted in favor of collection and not reducing taxes.
I started when I sold real estate - and discovered how the "rich get richer." After all - in the US -- 95+% of congress are attorneys - elected by big money and the rich -- and they write the tax codes!! You can guess that there are many ways to save your money from IRS. All the wealthy have trusts and corporations - as that is where the tax shelter is here. I just read a study that the RICH pay less than 23% in taxes - and that study is ONLY on the money they pay themselves....not the fortunes diverted to tax sheltered entities!
Glad you are writing this - maybe more of the middle income people will "wake up" and do some tax saving strategies! It's long over-due. Those that work the hardest could keep a lot more of their income with a little planning.
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