The trucking industry (driver specific) has, at least in my opinion, never been so quiet. There seems to be a silent desperation going on. Those who are making money say nothing and those who are not are eaking it out. Options are slim. Saving every penny, including taxes, is on too many minds.
I stated in my prior blogs that when times are tough the crooks come out from the woodwork. The temptation amoungst drivers and operators is also there. I urge people great and small to weather the temptation. Stay true to integrity. Just because Canadians don’t like taxes dosen’t mean they can cheat on them. Let’s be clear Canadians don’t ike “over paying taxes” not “not paying taxes”. The key is organizing your finances and business to pay the LEAST amount of taxes.
Those who regularly read my blog know the best possible method of reducing taxes to the position of national equality. If you want to know the whole story read the 50 entries below. I guarantee you won’t be sorry.
About Me
Friday, April 24, 2009
Tuesday, April 21, 2009
Who's responsibility is it anyway? The demise of the TL2!
In a perfect world where justice and equality prevails, everyone pulls their own weight, carries their own pail of responsibilities. There would be no government bailout of GM, Chrysler, Banks or Insurance companies. Sink or swim is the motto of business.
If in that world every industry carries their own there would be no need for the TL2. Why should the government reimburse citizens for industry related costs? And yet this is what is being done. Thirty years ago the trucking industry paid meal expenses on the road, but they abandoned that (or the responsibility taken from them) when the government started issuing a “rebate”.
In a perfect world a truckers wages would be separated from his job related costs. But we’re not in a perfect world.
If in that world every industry carries their own there would be no need for the TL2. Why should the government reimburse citizens for industry related costs? And yet this is what is being done. Thirty years ago the trucking industry paid meal expenses on the road, but they abandoned that (or the responsibility taken from them) when the government started issuing a “rebate”.
In a perfect world a truckers wages would be separated from his job related costs. But we’re not in a perfect world.
Thursday, April 16, 2009
Canadian Tax Savings...
All hail head colds, the stumper of all thoughts!
Saving taxes is a love for many. The extent to paying taxes boils down to one fact “fair share”. Canadians are not averse to paying taxes just so much as they believe they are not paying “too much”. Using the per-diem system ensures the Canadian truck operator they are in fact paying no more (and no less) than what is fair and reasonable. Check it out! If every lease/owner operator in Canada used the system they would save $100-200 million dollars in taxes.
E-mail me at Robert@thrconsulting.ca and you’ll enter to win my book on CD… FREE don’t even have to pay shipping and handling. Just read the entries and learn for yourself the real benefits.
Saving taxes is a love for many. The extent to paying taxes boils down to one fact “fair share”. Canadians are not averse to paying taxes just so much as they believe they are not paying “too much”. Using the per-diem system ensures the Canadian truck operator they are in fact paying no more (and no less) than what is fair and reasonable. Check it out! If every lease/owner operator in Canada used the system they would save $100-200 million dollars in taxes.
E-mail me at Robert@thrconsulting.ca and you’ll enter to win my book on CD… FREE don’t even have to pay shipping and handling. Just read the entries and learn for yourself the real benefits.
Tuesday, April 14, 2009
Audit trail one of the pillars of compliance
I watch CSI at times, piecing together evidence of an event. Blood trails, angles of entry, exit and deflection are all set together to tell a story. There is nothing that is left out. It shows motive, it shows intent and it shows what actually happened. Evidence usually dose not lie, things can sometimes be covered up but even the absence of evidence is evidence.
So it is with an audit trail. It is the paperwork that supports an agreement (employer-employee). It also reflects motive and intent, especially over an extended period of time. Where money goes reflects probably the clearest intent of it owner.
I once took a survey of leaders in a specific field. I was given the mandate to find out the priorities and intent of the field as a whole. I decided to ask only one question. “If I gave you $5000 dollars what would you do with it?” The results of my survey were an in-depth reflection of the entire field. It was very successful.
How an operator manages their cash in their corporation MUST reflect their employer-employee agreement, both its intent and its ultimate results. If all an accountant does is make journal entries to a shareholder loan account at the end of the year it is GROSELY inadequate. If the operator doesn’t want to conform to the requirements then the operator should not be able to benefit from compliance. NO COMPLIANCE… NO BENEFIT… (non-taxable that its!)
If an accountant doesn’t educate their clients to provide a reasonable audit trail, one that reflects the employer-employee agreement, I suggest the accountant find another industry to serve… maybe specialize in Chiropractors!
I know I’m harsh to accountants, but I believe that they are critical to the national implementation of subsistence/per-diem for the entire trucking industry. If they don’t get it right, the potential negative publicity of a failed appeal will delay tax savings to thousands of operators…
Don't forget to enter for this weeks free draw (see prior few entries for details). Last weeks winner has been notified and their CD's are on the way!
So it is with an audit trail. It is the paperwork that supports an agreement (employer-employee). It also reflects motive and intent, especially over an extended period of time. Where money goes reflects probably the clearest intent of it owner.
I once took a survey of leaders in a specific field. I was given the mandate to find out the priorities and intent of the field as a whole. I decided to ask only one question. “If I gave you $5000 dollars what would you do with it?” The results of my survey were an in-depth reflection of the entire field. It was very successful.
How an operator manages their cash in their corporation MUST reflect their employer-employee agreement, both its intent and its ultimate results. If all an accountant does is make journal entries to a shareholder loan account at the end of the year it is GROSELY inadequate. If the operator doesn’t want to conform to the requirements then the operator should not be able to benefit from compliance. NO COMPLIANCE… NO BENEFIT… (non-taxable that its!)
If an accountant doesn’t educate their clients to provide a reasonable audit trail, one that reflects the employer-employee agreement, I suggest the accountant find another industry to serve… maybe specialize in Chiropractors!
I know I’m harsh to accountants, but I believe that they are critical to the national implementation of subsistence/per-diem for the entire trucking industry. If they don’t get it right, the potential negative publicity of a failed appeal will delay tax savings to thousands of operators…
Don't forget to enter for this weeks free draw (see prior few entries for details). Last weeks winner has been notified and their CD's are on the way!
Thursday, April 9, 2009
Political Will continued...
The publicity around per-diem (subsistence/meal allowance) is not an income tax issue! It is a political issue, guided by political will! Let me take the long road, with a few stops along the way, to explain what I mean.
CRA has many, many levels of authority. The higher up someone advances the more politics are involved in their job descriptions. In order to advance as high as the upper crust “generals” (as I described them in my book) civil servants need to make sure they don’t get blamed for ANYTHING! “Cover your butt” is the first course taken by civil servants when contemplating advancement. This means that any new application of the income tax act must be able to be flexible enough to weather shifts in political parties. Sometimes new administrations direct CRA in different directions.
Here is the latest example of “upper level” income tax legislation designed to be applied through political will rather than clear legislation! The article is called “Lawyers see overkill hidden in federal bill” it is found at http://www.thebottomlinenews.ca/index.php?section=issue
The article can be summarized as follows. Current changes to the Competition Act and the Investment Canada Act hidden in our government’s budget implementation bill is legislation that is aimed at those who “fix prices” through cartel style agreements. It “…changes the conspiracy law to make it illegal to conspire with a competitor, without proof of the impact on competition…”, “…there will be no test… any agreement will be a violation…”. Another significant change comes with the label “abuse of dominance” (anti-bullying policy). As the article states “…caution is the keyword as it will be hard for many companies to know, in advance, when they have abused their dominant position… it is difficult to distinguish between aggressiveness and abusiveness…”
In this legislation there is deliberate vagueness. It produces an INVISIBLE glass ceiling, imposing “law” without clarification or definitions yet with record setting fines and penalties. So we must be realistic in the application of the law, ultimately it will come down to “political will”. Who will complain? Who will listen? Who will send out the dogs (no pun intended). Owners of monopolies, oligopolies etc would view the legislation as forcing a “blank check” to be written to the government… with no clear invoice!
Legislation like this may be designed to intimidate and control without specifics. It is a reflection of how the higher level CRA officials view their jobs and positions. Legislation must have administrative flexibility, no definite right/wrong, no clarity just authority.
The only way to affect long term stability in the application of some income tax issues (such as subsistence/per diem) is political will. Most “exceptions” must be individually defended until they become common knowledge with universal application. Once enough people use the exception it would create a negative public perception if it suddenly was taken away.
The more people know about it, the more people who use it the safer it is for everyone. Political will, in a democracy is always the citizens. Think about the implication of long term application and stability of any tax benefit!
Keep sending your e-mail's to win the CD version of my book (see prior entries)
CRA has many, many levels of authority. The higher up someone advances the more politics are involved in their job descriptions. In order to advance as high as the upper crust “generals” (as I described them in my book) civil servants need to make sure they don’t get blamed for ANYTHING! “Cover your butt” is the first course taken by civil servants when contemplating advancement. This means that any new application of the income tax act must be able to be flexible enough to weather shifts in political parties. Sometimes new administrations direct CRA in different directions.
Here is the latest example of “upper level” income tax legislation designed to be applied through political will rather than clear legislation! The article is called “Lawyers see overkill hidden in federal bill” it is found at http://www.thebottomlinenews.ca/index.php?section=issue
The article can be summarized as follows. Current changes to the Competition Act and the Investment Canada Act hidden in our government’s budget implementation bill is legislation that is aimed at those who “fix prices” through cartel style agreements. It “…changes the conspiracy law to make it illegal to conspire with a competitor, without proof of the impact on competition…”, “…there will be no test… any agreement will be a violation…”. Another significant change comes with the label “abuse of dominance” (anti-bullying policy). As the article states “…caution is the keyword as it will be hard for many companies to know, in advance, when they have abused their dominant position… it is difficult to distinguish between aggressiveness and abusiveness…”
In this legislation there is deliberate vagueness. It produces an INVISIBLE glass ceiling, imposing “law” without clarification or definitions yet with record setting fines and penalties. So we must be realistic in the application of the law, ultimately it will come down to “political will”. Who will complain? Who will listen? Who will send out the dogs (no pun intended). Owners of monopolies, oligopolies etc would view the legislation as forcing a “blank check” to be written to the government… with no clear invoice!
Legislation like this may be designed to intimidate and control without specifics. It is a reflection of how the higher level CRA officials view their jobs and positions. Legislation must have administrative flexibility, no definite right/wrong, no clarity just authority.
The only way to affect long term stability in the application of some income tax issues (such as subsistence/per diem) is political will. Most “exceptions” must be individually defended until they become common knowledge with universal application. Once enough people use the exception it would create a negative public perception if it suddenly was taken away.
The more people know about it, the more people who use it the safer it is for everyone. Political will, in a democracy is always the citizens. Think about the implication of long term application and stability of any tax benefit!
Keep sending your e-mail's to win the CD version of my book (see prior entries)
Tuesday, April 7, 2009
Ethical application of the Income Tax Act
I’ve been in discussion with some very interesting people in the last several months. Privately accountants nod their head in acknowledgement and slap my back in support of the effort I’ve displayed in applying ethics to the income tax act. However, as several have asked “…what does the income tax act have to do with ethics?...”. It is a very interesting topic, especially amongst accountants. Placed as bluntly as that, reactions usually vary from philosophical interest to “deer in the headlights”. Applying ethics to the Charter of Rights and Freedoms is a given. The Federal Accountabilities Act is a shoe-in for an ethics discussion, but the income tax act? The longer a person’s been in the profession the more it appears wasted effort. It’s wasted because the act is so complex and produces such conflicting results, not the atmosphere that fosters feelings of security, justice and equality all results of solid ethics.
I read a couple articles lately that show examples of this. There was an article in “The Bottom Line” http://www.thebottomlinenews.ca/index.php?section=issue page 19 by writer Vern Krishna titled “Law consistent in its inconsistencies”. Without going through details (which are pretty amazing as well as complex) it discusses the outcome of a court case similar to the one I described on December 19, 2008 Singleton vs Canada. Without me drawing to much attention to a different case I’d just like to quote the writer’s final statement of the supreme courts decision “… Westminster prevails over GAAR, except in the circumstances where GAAR prevails over Westminster…”. It was a clear example of the “super complexity” and circular reasoning/results within the income tax act.
There have been many people who have stated that accountants refuse to publicly fight for their “clients”. They too often assume “all accountants just work for the government anyway”! These are the people who believe that the income tax act is a “black and white law”. They believe it is clear what is allowed and clear what is NOT ALLOWED! Thinking they know the white they accuse accountants of painting things black. This may be a serious misrepresentation of the industry… note the vague terms.
The income tax act has over two thousand pages that are added to it every year. For every concrete rule there are several (if not many) concrete… or vague exceptions. The more complex a deduction, generally, the more clarity is lost to various interpretations, as in the English spelling Rule: I before the E… except after c… or in seize… height… either… foreign… It becomes so weird that you can choke on the exceptions and be forced to use the Heimlich maneuver.
Accountants generally like systems and predictable rules. The economy generally likes systems and predictable rules. The income tax act is not friendly to either unless accountants refuse to navigate the plate of spaghetti exceptions. Some accountants assume one primary rule: the fewer exceptions used the more assurance there is of compliance. Better to err on CRA’s favor than to risk explaining your string of exceptions.
GIVEN THIS… the application of per-diem to the trucking industry can be too much of an “exception” to too many accountants even though it is based on sound ethics and applications historically allowed within the income tax act.
If CRA can twist a very flexible act into a contradictory tool of discrimination rather than a guideline, ethics means NOTHING! The bottom line would be… don’t stand in the way of the judge, jury and executioner. Stay quiet!
Who is going to pay an accountant to defend this income tax application? Both an honest and reasonable question! Few, if any, individual operators will pay to have their accountant go before the Supreme Court. Few, if any, individual accountant will pay their own way to go before the Supreme Court.
So why do I write what I write? Why not just apply it and be happy to grow my firm?
I need time to explain my reasoning. Let me give you a hint. It has to do with political will!
See you on Thursday!
Don't forget to e-mail your name for a free CD version of my book. See prior days for details!
I read a couple articles lately that show examples of this. There was an article in “The Bottom Line” http://www.thebottomlinenews.ca/index.php?section=issue page 19 by writer Vern Krishna titled “Law consistent in its inconsistencies”. Without going through details (which are pretty amazing as well as complex) it discusses the outcome of a court case similar to the one I described on December 19, 2008 Singleton vs Canada. Without me drawing to much attention to a different case I’d just like to quote the writer’s final statement of the supreme courts decision “… Westminster prevails over GAAR, except in the circumstances where GAAR prevails over Westminster…”. It was a clear example of the “super complexity” and circular reasoning/results within the income tax act.
There have been many people who have stated that accountants refuse to publicly fight for their “clients”. They too often assume “all accountants just work for the government anyway”! These are the people who believe that the income tax act is a “black and white law”. They believe it is clear what is allowed and clear what is NOT ALLOWED! Thinking they know the white they accuse accountants of painting things black. This may be a serious misrepresentation of the industry… note the vague terms.
The income tax act has over two thousand pages that are added to it every year. For every concrete rule there are several (if not many) concrete… or vague exceptions. The more complex a deduction, generally, the more clarity is lost to various interpretations, as in the English spelling Rule: I before the E… except after c… or in seize… height… either… foreign… It becomes so weird that you can choke on the exceptions and be forced to use the Heimlich maneuver.
Accountants generally like systems and predictable rules. The economy generally likes systems and predictable rules. The income tax act is not friendly to either unless accountants refuse to navigate the plate of spaghetti exceptions. Some accountants assume one primary rule: the fewer exceptions used the more assurance there is of compliance. Better to err on CRA’s favor than to risk explaining your string of exceptions.
GIVEN THIS… the application of per-diem to the trucking industry can be too much of an “exception” to too many accountants even though it is based on sound ethics and applications historically allowed within the income tax act.
If CRA can twist a very flexible act into a contradictory tool of discrimination rather than a guideline, ethics means NOTHING! The bottom line would be… don’t stand in the way of the judge, jury and executioner. Stay quiet!
Who is going to pay an accountant to defend this income tax application? Both an honest and reasonable question! Few, if any, individual operators will pay to have their accountant go before the Supreme Court. Few, if any, individual accountant will pay their own way to go before the Supreme Court.
So why do I write what I write? Why not just apply it and be happy to grow my firm?
I need time to explain my reasoning. Let me give you a hint. It has to do with political will!
See you on Thursday!
Don't forget to e-mail your name for a free CD version of my book. See prior days for details!
Thursday, April 2, 2009
FREE CD Book giveaway draw every Saturday. One (or more) per week for the month of April. Find out how by reading this page!
For some, spring break develops pictures of beaches and university students partying all night. For me it’s a reduced work load at the office so I can spend half days with my kids. Tuesday I watched the Lord of the Rings trilogy with my son. I can’t tell you how many times my feet fell asleep.
The half days are filled with immediate correspondence and critical things (basically a week of partial procrastination). I’m working on developing a more in-depth relationship with my readers. This is one reason I am giving away one copy of my book on CD per week (in a draw) to anyone who e-mails me stating they read each of my entries since November 1st 2008 (honor system). If you want to be included in the draw just e-mail me at Robert@thrconsulting.ca. I promise I won’t sell your e-mail address to anyone. If there are too many participants I will increase the amount of CD’s given away per week to make it easier to win (at my discretion).
The publicity of per diem subsistence allowance is slowly building. There are accountants all across Canada reviewing data, informing drivers and making career choices. Working with accountants is like herding cats. Each has a mind of their own (which, long term, is actually a good thing).
Truck drivers are becoming more and more attuned to the options available to them. It’s a slow process but the information supply chain is starting to work smoother.
The half days are filled with immediate correspondence and critical things (basically a week of partial procrastination). I’m working on developing a more in-depth relationship with my readers. This is one reason I am giving away one copy of my book on CD per week (in a draw) to anyone who e-mails me stating they read each of my entries since November 1st 2008 (honor system). If you want to be included in the draw just e-mail me at Robert@thrconsulting.ca. I promise I won’t sell your e-mail address to anyone. If there are too many participants I will increase the amount of CD’s given away per week to make it easier to win (at my discretion).
The publicity of per diem subsistence allowance is slowly building. There are accountants all across Canada reviewing data, informing drivers and making career choices. Working with accountants is like herding cats. Each has a mind of their own (which, long term, is actually a good thing).
Truck drivers are becoming more and more attuned to the options available to them. It’s a slow process but the information supply chain is starting to work smoother.
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