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Old 10-04-2021, 09:09 AM   #381
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Bold prediction: no one in power gets in any trouble, the person who broke the story will die under mysterious circumstance and the media will never mention it again after this news cycle.
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Old 10-04-2021, 09:16 AM   #382
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The failure of our government to do anything at all to stop blatant tax avoidance by multimillionaires is disgusting. How the Conservative party didn’t rally around the fact that the liberals not only failed repeatedly to intervene, or prosecute these high dollar schemers, under their watch the CRA wrote off $133M in tax owed by a single entity.
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Old 10-04-2021, 09:21 AM   #383
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The failure of our government to do anything at all to stop blatant tax avoidance by multimillionaires is disgusting. How the Conservative party didn’t rally around the fact that the liberals not only failed repeatedly to intervene, or prosecute these high dollar schemers, under their watch the CRA wrote off $133M in tax owed by a single entity.
Thats not even the half of it. Technically the Liberals under Trudeau authorized a significant increase in CRA's budget to target Off-Shore schemes just like these, as I recall somewhere in the range of a Billion dollars.

There was even evidence that the Big 4 Accounting firms in Canada were basically running a Caribbean Rat-Line for their High-Value clients.

Number of Prosecutions: 0

Dollars Recouped: $0

Hm. I wonder who else has their money there...
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Old 10-04-2021, 10:24 AM   #384
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Thats not even the half of it. Technically the Liberals under Trudeau authorized a significant increase in CRA's budget to target Off-Shore schemes just like these, as I recall somewhere in the range of a Billion dollars.

There was even evidence that the Big 4 Accounting firms in Canada were basically running a Caribbean Rat-Line for their High-Value clients.

Number of Prosecutions: 0

Dollars Recouped: $0

Hm. I wonder who else has their money there...
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Old 10-04-2021, 10:45 AM   #385
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The failure of our government to do anything at all to stop blatant tax avoidance by multimillionaires is disgusting. How the Conservative party didnít rally around the fact that the liberals not only failed repeatedly to intervene, or prosecute these high dollar schemers, under their watch the CRA wrote off $133M in tax owed by a single entity.
The Conservative party members are probably equally worried about their own supporters and members. Any party supporter who thinks their own party is less guilty here is delusional....unless you support one of those fringe parties, where the leader can't pay his own rent, let alone squirrel money away overseas.
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Old 10-04-2021, 01:27 PM   #386
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Sorry, I've been away. Rotating sick family members and whatnot. I had a few things I wanted to address in the earlier stuff, but I think it's not really necessary. You guys kind hashed it all out.

I've actually spent time and sat down with people in the CRA/CPA institute and Department of Finance and even individuals involved in tech criminal investigations (Using tech to open up the right channels to convict someone of bad things that are not just tax evasion is all I can say) via round tables, over beers etc. It is something that I have an inherent passion to figuring out and in the long term, perhaps contributing towards finding a resolution.

The amount of people who don't even know the distinction between the CRA and Department of Finance is pretty high. On occasion, knowing that distinction is important as it links into how certain CRA case law has been reversed in favor of the tax payer because the CRA over stepped their bounds to try and get a result.

There is no clear cut way to resolve the issue. The biggest reasons being legal reasons (ie: different legal jurisdictions, legality of bringing a case against the individual/corporation) and a smoking gun (ie: limiting the individual/corporation's ability to fight back and increase the margins of recovery as a result).

As I mentioned before, there is a cost to recover these funds. If it costs $100 million in audit fees, legal fees etc. to recover $150 million over 5 years in unpaid taxes, interest and penalties, that might sound reasonable. But as I mentioned, that's a drop in the bucket vs real local tax evasion happening on Canadian soil that offers less resistance if brought out into the open.

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Yeah, I read about that this morning.

Well...thats what happens when you dont do anything about it.

I could go on and on, but if there is no enforcement this is just going to continue to happen. The wealthy can continue to do this kind of thing, thats why just 'increasing the tax rates on the wealthy' isnt going to do anything.
I am nearly confident that the CRA knew of this long before these papers were revealed. The details might be a little hazy or not in a specific order or grouping that makes as much sense as what was revealed perhaps.

One doesn't think that at least a specific someone with these "schemes" going all the way back to 1992 couldn't be identified by someone critically thinking about Canadian high income earners?

You can win a lawsuit, but then how do you collect? Many people don't think about these things which is why certain "accounts" aren't ripe for collection. There are plenty scenarios where the CRA can win countless battles, but still lose the war. The ultra rich know this (or at least those the ultra rich pay to play, know this).

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The failure of our government to do anything at all to stop blatant tax avoidance by multimillionaires is disgusting. How the Conservative party didn’t rally around the fact that the liberals not only failed repeatedly to intervene, or prosecute these high dollar schemers, under their watch the CRA wrote off $133M in tax owed by a single entity.
We aren't the only country that struggles with this. Nearly every country struggles with this. This isn't just a Canada issue, it's a global one. I want to tag these guys as much as the next guy, but the guys I talk to guys who have chatted with those who were involved in some of the cases and it sometimes just came down to basic tact and strategy. It pisses me off that the CRA writes off a huge sum of money, but when you look at many lawsuit cases, it kinda makes sense (ie: Going back to winning, but not collecting) even if I'm pissed at the result. Let's say CRA has a situation where there's 500MM in taxes they should collect. $100MM in lawsuits later, the individuals will settle for $250MM.

$500MM
100MM costs
------
600MM out of pocket so far
(250)MM settlement
------
350MM "loss/write off"

Keep in mind that technically, CRA is guaranteed the $250MM in a settlement like this. They could keep "investing" money into lawsuits, but maximum collection (not litigation wins) is the end goal. CRA starts with nothing (because of illegal tax avoidance) invests $100MM and gets "$150MM in profit" is the actual calculation. Again, it pisses me off too, but it's apparently a necessary compromise at times. It's worse off if the CRA ends up in headlines along the lines of, "CRA spent $300MM fighting over X years and has collected zero dollars via this program".

It's kinda similar to two individuals fighting about the split of their assets in a divorce. One side might win over the other, but if there's nothing but debts left over afterwards, no one but the lawyers wins that duel. There's nothing to collect. Ultra rich can kinda wag their fingers from a distance knowing that they CRA cannot reach them due to legal reasons. CRA can win any form of legal outcome on Canadian soil, but if there are no assets (or not enough assets on Canadian soil) to collect on, they're stuck. I am under the understanding that one of the reason why the ultra rich settle, because they know they can and they are willing to do it because it resolves a minor hindrance to their operations. The alternative is the other side just stonewalling and wasting the CRA's time/resources using funds that in theory are CRA's to begin win. The more CRA invests/spends to collect, the more CRA potentially wastes.

Again, I'm pissed too. But I kinda see why the CRA on occasion chooses to go through that channel to close the chapter.

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Originally Posted by Locke View Post
Thats not even the half of it. Technically the Liberals under Trudeau authorized a significant increase in CRA's budget to target Off-Shore schemes just like these, as I recall somewhere in the range of a Billion dollars.

There was even evidence that the Big 4 Accounting firms in Canada were basically running a Caribbean Rat-Line for their High-Value clients.

Number of Prosecutions: 0

Dollars Recouped: $0

Hm. I wonder who else has their money there...
I don't completely understand the semantics of the situation because it's been harder to have "informal chats" with people due to the pandemic and my personal situation, but I think that the CRA was asked to divert quite a bit of those funds/resources into other things (ie: Sorting out the chaotic pandemic program and the lost funds via CERB etc. that was happening in 2020).

Beyond that, I'm not too sure. I was chatting with a guy who got a taste of the different powers collaborating their digital resources. He was mostly an outsider with an idea of what was going on, but not as hands on as the other government guys, CSIS etc. He said that a few weeks of supporting these guys and understanding what was going on was enough for him. The depravity they were uncovering via back door means to build a case with stuff that was not unlawfully collected was nightmare fuel. As in, you have info that cannot be used in a lawsuit, but it gives you a major hint how to use other methods get lawful evidence in for a slam dunk legal cases. Tax evasion was the least of their concerns vs things like human trafficking and porn type cases. The synopsis was chilling. The actual stories? No thank you.


@Mathgod. As I mentioned before, I'm not trying to tear you down for no reason, but if "fun" is semantically the wrong word, then is "passion" better? It's a topic that obviously means something to you which is why you started the thread. That's what I was getting at. There's a reason why simply pointing out the concept is useless for guys who have had decades worth of insulation plus millions of dollars worth of counter measures when the CRA decides to try and chase it down.

You hinted at the concept of UBI. My opinion on UBI is that it's a good concept, except it's something designed for a new type of government/social system and will absolutely not work with the existing system. I've gotten to the point that it's pointless to debate the concept if the person I discuss it with isn't on the same page that practically speaking, no current governmental and social system combination will be able to effectively implement one without overhauling the system.

Metaphorically it's a new microchip that is completely incompatible with older versions of intel systems and/or AMD systems. You cannot demand it work. You can mash it with the old system and it will break each other. It doesn't matter it's doing something that was done before with older tech in a different way, it just doesn't match. UBI will IMO never work without a major over haul of government and social systems. Or, it's a modern system that is completely incompatible with an archaic system like DOS.

I do think that UBI will be implemented in some manner sooner or later, but not without major undertaking but many individuals to clean up stuff "under the hood" to ensure it is possible to successfully deploy it.


The CERB/CEWS stuff you hinted at isn't a good example of UBI. It was rife with exploitations and issues that cost tax payers around $500MM in fraudulent claims that will take resources and many years to recuperate. Almost $300MM to employers at high risk of insolvency. $800MM in less than a year is crazy. Even if some will be recuperated, there is a cost to recuperate. There's a ton of unrecoverable leakage. This also not completely addressing other cross over issues like foreign groups hacking MyCRA to "legitimately claim CERB" but squirrel the funds elsewhere or people retroactively modifying payments to employees so that they suddenly qualify for CERB. We know that the program was designed to get cash to Canadians as soon as possible with an expectation to a cost like this of fraudulent claims. This is why any future distribution system needs to be overhauled to restrict these vulnerabilities.

https://globalnews.ca/news/7719393/c...eneral-report/

Practically speaking, it's not so simple as just changing some rules. Look at the implementation of the Phoenix pay system. CRA had a gong show situation paying their own employees with a new system at one point in 2019. Implementing a UBI system with this type of crap back bone long term is a disaster waiting to happen. Like I said, IMO major overhauls to the entirety of certain government and social backbone before UBI will work properly.

https://www.canada.ca/en/treasury-bo...ent-leave.html

Imagine if you compounded the issues of both together? Yeesh. It's a constant plug one hole to expose another one over and over.

You'd need major overhaul with internal data infrastructure, internal reporting requirements, legal laws, global partnerships in terms of enforcement across jurisdictions etc. We will get there one day, but we don't have the pieces in position for a check mate yet. This isn't a fresh game of chess. We have to play the game with many positions already on the board. The game has been played over the years been designed to give the rich the advantage because they spent the time to have a better grip on the theory. The rich are are also better equipped than the government to benefit and win if changes are haphazardly implemented.

Take a step back. I think it should mean something that nearly all countries world wide struggle with some of the illegal/immoral tax avoidance that occurs. If everyone is struggling, not one single country is going to solve it on their own. It's also obvious and we have a ton of examples that it's a headache to get a few countries to completely play nice with certain legal jurisdiction stuff without political games and other things, let alone the entire global community to work together to close out the exploits that some of the ultra rich are using. That's one of the fundamental issues that those addressing these problems, deals with.

For a more cynical thought, consider how you'd change the rules to target these people when these people being targeted have their own agents in the system to bog down the groups trying to chase them. Those trying to solve these things often have one hand tied behind their back vs the people they are playing against. It's not easy which is why having more passionate and well informed players playing a complex game against the ultra rich is important long term.

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Old 10-05-2021, 06:43 PM   #387
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certain CRA case law has been reversed in favor of the tax payer because the CRA over stepped their bounds to try and get a result.

There is no clear cut way to resolve the issue. The biggest reasons being legal reasons (ie: different legal jurisdictions, legality of bringing a case against the individual/corporation) and a smoking gun (ie: limiting the individual/corporation's ability to fight back and increase the margins of recovery as a result).

As I mentioned before, there is a cost to recover these funds. If it costs $100 million in audit fees, legal fees etc. to recover $150 million over 5 years in unpaid taxes, interest and penalties, that might sound reasonable. But as I mentioned, that's a drop in the bucket vs real local tax evasion happening on Canadian soil that offers less resistance if brought out into the open.
That's just it, corporations and wealthy individuals currently have (imo) too much leverage allowing them to fight CRA rulings and bog things down in the courts. There needs to be a fundamental rethink of the system, if there's ever going to be true progress made toward solving this problem. As you said, the trickiest part will be getting all the major governments around the world on board with implementing the new laws, norms, etc.
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Old 10-12-2021, 08:39 PM   #388
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That's just it, corporations and wealthy individuals currently have (imo) too much leverage allowing them to fight CRA rulings and bog things down in the courts. There needs to be a fundamental rethink of the system, if there's ever going to be true progress made toward solving this problem. As you said, the trickiest part will be getting all the major governments around the world on board with implementing the new laws, norms, etc.
I sometimes wonder if we could get really aggressive with civil forfeiture laws to go after people who are illegally cheating on their taxes. Just start seizing any assets you can tie to the cheating.

Probably impossible to prove and enforce, but seems like it'd be a much bigger deterrent than fines of paying back taxes.
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Old 10-12-2021, 09:02 PM   #389
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I sometimes wonder if we could get really aggressive with civil forfeiture laws to go after people who are illegally cheating on their taxes. Just start seizing any assets you can tie to the cheating.

Probably impossible to prove and enforce, but seems like it'd be a much bigger deterrent than fines of paying back taxes.
Civil forfeiture in the hands of the CRA would be pretty open to abuse. Take a look at some of the US issues with police departments shaking down people using these laws.
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Old 10-12-2021, 10:24 PM   #390
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Civil forfeiture in the hands of the CRA would be pretty open to abuse. Take a look at some of the US issues with police departments shaking down people using these laws.
Yeah, the CRA is not trustworthy enough to have civil forfeiture.
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Old 10-12-2021, 11:20 PM   #391
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Civil forfeiture in the hands of the CRA would be pretty open to abuse. Take a look at some of the US issues with police departments shaking down people using these laws.
We already have civil forfeiture in Canada (at least in BC). I don't think the CRA should be able to seize assets without a conviction, but I do wonder if the prospect of losing assets would provide some form of deterrent. Fines that only represent a tiny fraction of a person's wealth sure don't seem to be doing much to curb the issue.
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Old 10-13-2021, 09:31 AM   #392
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We already have civil forfeiture in Canada (at least in BC). I don't think the CRA should be able to seize assets without a conviction, but I do wonder if the prospect of losing assets would provide some form of deterrent. Fines that only represent a tiny fraction of a person's wealth sure don't seem to be doing much to curb the issue.
I don't think you understand the type of nightmares that would be created by something like this. It would be beyond a police state dystopian nightmare.

The vast majority of people who participate in Canada's underground economy are not the ultra rich. They're basically like the blue collar guys working on your house for cash under the table. Those guys are more likely to not accumulate their wealth and instead blow that extra capital on substance and gambling addictions than they are on assets that actually retain value. The most valued possessions these people have are likely an assortment of used and beat up tools and some crappy pick up trucks. Some are servers not claiming their tips and they drink and party that money away.

These are some of the things that were discussed when the CRA was looking into some of the underground economy. Does it even make sense to try and make examples of certain people who are already in hard times? (ie: You can succeed with the claim, but then the person just ends up filing for bankruptcy). You also can't legally arbitrarily enforce on high income and ignore low income types. It's one hell of a challenge.

The CRA is also not a realtor or an auction house. Could you imagine if the CRA had a site to auction off #### they took? Call it TaxEbay... E as in evasion. Coked out exotic animals, orgy stained vans, burnt out houses with #### and piss in the HVAC systems, a dirty minivan with the car seats still strapped in the back... The CRA likely would have to destroy more than they'd recuperate in many of those situations.

This isn't even with the disputes of the value of things that CRA takes. There's already plenty of tax situations where the dispute is on the value of the asset, thus the amount of actual taxes owed to the CRA.
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Old 10-13-2021, 03:15 PM   #393
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I don't think you understand the type of nightmares that would be created by something like this. It would be beyond a police state dystopian nightmare.

The vast majority of people who participate in Canada's underground economy are not the ultra rich. They're basically like the blue collar guys working on your house for cash under the table. Those guys are more likely to not accumulate their wealth and instead blow that extra capital on substance and gambling addictions than they are on assets that actually retain value. The most valued possessions these people have are likely an assortment of used and beat up tools and some crappy pick up trucks. Some are servers not claiming their tips and they drink and party that money away.

These are some of the things that were discussed when the CRA was looking into some of the underground economy. Does it even make sense to try and make examples of certain people who are already in hard times? (ie: You can succeed with the claim, but then the person just ends up filing for bankruptcy). You also can't legally arbitrarily enforce on high income and ignore low income types. It's one hell of a challenge.

The CRA is also not a realtor or an auction house. Could you imagine if the CRA had a site to auction off #### they took? Call it TaxEbay... E as in evasion. Coked out exotic animals, orgy stained vans, burnt out houses with #### and piss in the HVAC systems, a dirty minivan with the car seats still strapped in the back... The CRA likely would have to destroy more than they'd recuperate in many of those situations.

This isn't even with the disputes of the value of things that CRA takes. There's already plenty of tax situations where the dispute is on the value of the asset, thus the amount of actual taxes owed to the CRA.
Theoretically, there could be workarounds:

1. Crackdown on offshore holdings specifically.
2. Make penalties relative to the extent of the offence. If you get caught not reporting $1,000 in under the table work, the penalty is different than if you get caught hiding $1,000,000 in revenue. There's already precedents for this in the criminal law. For example drug and theft charges fall into different categories based on the amounts involved.
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Old 10-13-2021, 03:30 PM   #394
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Theoretically, there could be workarounds:

1. Crackdown on offshore holdings specifically.
2. Make penalties relative to the extent of the offence. If you get caught not reporting $1,000 in under the table work, the penalty is different than if you get caught hiding $1,000,000 in revenue. There's already precedents for this in the criminal law. For example drug and theft charges fall into different categories based on the amounts involved.
I believe these already exist in some form. The major issue is being able to enforce these rules in a foreign jurisdiction.

On Canadian soil, the CRA can legally garnish money from you and freeze certain assets on Canadian soil to enforce payment. But in foreign jurisdictions even with a tax treaty in place, I do not believe that is possible.

But I think that's what we see. Someone like Edwards, cash value would be garnished from his Canadian companies/certain types of freezes would occur until they are paid up. So he won't risk those types of things. Someone like Villeneuve though, there isn't really any liquid assets on Canadian soil that I am aware of they can use in the enforcement.

Keep also in mind that in certain transacting scenarios, if a certain amount of cash is sent to the foreign individual before filing taxes (ie: no withholding tax), then individuals responsible for the transaction and transfer of cash out of Canada become liable for those unpaid taxes.

We already have variations of these rule which should work in theory, but as I mentioned to Mathgod, the fact there are many countries that do not cooperate and all have their own unique rules, is why many ultra rich can find ways to squirrel assets to tax havens and give us/other countries the middle finger salute when they try to collect.
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Old 10-13-2021, 04:06 PM   #395
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Dollars Recouped: $0
Tax returns of my friends balance themselves.
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