If you have questions about a previous relationship with the Fiscal Arbitrators in Canada and what they mean, including whether or not any advice or materials you have received from them are accurate or applied to your individual situation, you want the help of experienced and knowledgeable tax professionals in Canada. Our office can assist you with a broad variety of tax related issues and can provide you with prompt and informed answers to your key questions.
Relying on professionals or those people who allegedly claimed to be professionals is one way to file your taxes. However, as recent issues have shown, if you work with the wrong people this can be a situation that follows you for months or even years. Many people who chose to partner with Fiscal Arbitrators found themselves on the wrong end of a massive tax bill and are now sorting out the consequences. If that’s you, we might be able to help.
Fiscal Arbitrators Case Background
The Fiscal Arbitrators Organization convinced many Canadian taxpayers to allow self-claimed tax experts to handle the preparation amendment and filing of their tax returns in order to exploit non-existent expense deductions. The purpose of this was to reduce the taxpayers' taxable income to produce tax refunds throughout this scheme.
Fiscal Arbitrators would charge a set fee for preparation of the return plus a portion of any refund produced. This is not the only company that has been accused of this fraudulent scheme. DCS Lifestyle Services is another company that was also involved and would refer its clients to Fiscal Arbitrators for a cut of the proceeds. An estimated 1,800 Canadian taxpayers fell victim to Fiscal Arbitrators' fraud.
Tax Fraud Cases Caused by Fiscal Arbitrators
Regardless of the reason for which the tax fraud was perpetrated, it can be the responsibility of the individual or business to correct these issues and this individual or business will also be the one responsible for communicating with the CRA. Because of the advice provided by Fiscal Arbitrators, several taxpayers were slapped with gross negligence penalties from the CRA.
This happened after the CRA completed a tax audit of the taxpayers' taxation years denying the fictional deductions and levying gross negligence penalties. In other cases, Fiscal Arbitrators advised taxpayers to register as a business on account of a legal loophole and taxpayers were advised to file their tax returns as an independent business entity. These taxpayers were led to believe that they could deduct all of their living expenses as business expenses, leading to fiscal arbitrators receiving a portion of the received tax refund. None of these taxpayers thought to consult with an experienced Canadian tax lawyer before filing these returns but are now dealing with the aftermath of sorting this out with the CRA.
Appeal of Gross Negligence Penalties
It is important to take action as soon as possible if you believe that you fell victim to this fraudulent scheme. Of the four tax court judgements released on fiscal arbitrators' gross negligence penalty cases, three of those taxpayers were successful. All four of these cases involved appeals of the income tax charge of a gross negligence penalty levied by the CRA.
Factors in a Tax Court's Decision
Tax courts will take numerous factors into their devaluation of whether or not you will need to pay the penalties. In these cases they had to decide if the taxpayer stepped over the line of being careless or naive into purposeful blindness. Gross negligence penalties are to be upheld depending on those levels of care or lack thereof exercised by the taxpayers entrusting the advice of Fiscal Arbitrators.
Avoid schemes in the future by consulting with a Canadian tax lawyer. Call Rotfleisch & Samulovitch PC today.
Contact a Canadian Tax Lawyer Through Rotfleisch & Samulovitch PC
Call Rotfleisch & Samulovitch PC today at 416-367-4222. Our office can also be reached through email or fax and you can use the online contact from at our website or visit our Toronto office to get your questions about Fiscal Arbitrators answered.
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“Falling victim to schemes and penalties from the CRA can be avoided through proper consultation with a Canadian tax lawyer.”
FAQs on Fiscal Arbitrators
Can you appeal a gross negligence penalty levied by the CRA?
There are certain circumstances in which you are indeed eligible to appeal a gross negligence penalty levied by the CRA. Because of these complex tax concerns it is important that you proceed in these kinds of cases with the support of a Canadian tax lawyer. This is true whether or not you were impacted by the Fiscal Arbitrator scheme.
What should the victims of Fiscal Arbitrators have done to avoid trouble?
It is important to always thoroughly vet any tax professional that you are thinking about working on your individual or business tax return. Seeking out the advice of Canadian tax professional attorneys could have helped to avoid these significant challenges and all of the administrative work or appeals necessary for those individuals who fell victim.
How can I avoid similar schemes from untrustworthy tax professionals?
Always do a thorough research about a tax professional that you are intending to communicate with regarding your tax preparation or tax reduction strategies. Experienced and knowledgeable lawyers can always review any existing plans or structures to help you make the right decision going forward. Schedule a consultation with a trusted tax preparation professional today to learn more.
"These articles provide information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."