Deemed Taxes QRLSP Info (Qualifying Retroactive Lump-Sum Payments)

I think what will make the difference is how pays for the legle fees.

Greatfoot and Redfisher, I agree wholeheartedly in what you are saying and my concerns and your suggestions are valid options however, I just don't know what can be done about it in this point of the settlement proposal. I brought this up previously and was told it is not up for negotiations it is just a yes or no from the judge end stop. I really have no confidence at this point we will get any adjustment to tax penalties. As for the reduction of legal fees, I don't see that happening either based on the 30% that was agreed upon by the lead plaintiff originally. It will be stated that 17.5% is being more than fair compared to 30%. So, I have no illusions unfortunately.

I agree Greatfoot DISGUSTING, and may add , This deal looks ok up front, but its going to be the taxation,long after the deals done,thats going to show the real Deal.

The 3.27% top-up is not enough to cover legal fees. If it were 8% then zero sums with a few years retro would break even. When I mean break even I mean that all the interest top at 8% would give us enough retro to pay the legal fees and not out of our pockets.

Either lower the legal fees to 10% or raise the interest top up from 3,27% to 8%. This way we don't loose even more money.

Call of Duty, I absolutely agree.

I have no problem paying taxes, but I feel it is only fair that we pay the tax that would have been applied to the monies that we received if we had received it at that time. Again, because this was a situation forced on us, beyond our control, by the body that is responsible for income taxes to begin with.

That is to say, if I was supposed to pay 10% tax on that money, then that's all I should have to pay, not 10% plus interest on the amount owed over X number of years.

Or perhaps, the GoC agreed to the 3.27% top-up, knowing full well that they would benefit in the overall scheme of things by tax-raping those owed past 5 years, and some people, in their short-sightedness to get paid, overlooked that glaring error. And now that the 3.27% top-up is almost agreed to, the government can claim the deemed taxes with impunity by stating that it has been accounted for in the top-up.

Disgusting, really, when you can wrap your head around it.

It is called Deemed taxes, as I Had a return that clearly stated the added Taxes, were Deemed Taxes, that were also known as" Notional taxes" that are applied to QRLSPS , in accordance with the Income Tax act. Joan of arc is right , the avereage CRA agent has no idea about QRLSPS, and our unique tax situation, only a specialist within CRA can answer those questions properly. In my case the Deemed tax or Notional Tax was , I believe,calculated using their refund interest rate, and compounded back each year I received retro, Thats why, it was a Nasty tax hit. As to whether the QRLSP is suppose to ease the tax Burden, in my case it was almost as bad as claiming all, in 1 year, because of the Deemed taxes. This is a complicated issue for those who have never expierienced it and you may find CRA is of little help to answer your questions, as I encounted this time and time again. Retros that go back more then 5 years will most likely, as I have seen, not get much releif from a 3.27% top up, Just my opinion from what I have encountered. That is why I am pointing this out to certain Vets that are in this situation. Like Joan of arc said, You will probably need to talk to a CRA agent, that is involved in that special area of taxation to get a clear picture of what you will owe in Deemed taxes. And BTW i feel only the revised taxes should be owed to CRA, which are the taxes we would have nomally paid in those years, simply because we did not create this situation the GOC did, `THATS A FACT JACK``.

prime plus 2% calculated yearly on the amount of taxes owing ...contact revenue Canada have them explain...

Its really a comparison to determine the best route to take to save taxes.....lump sum or spread over the time owing....since its taxes owing RC for calculation purposes adds an interest charge on past due taxes ...that is why we got the 3.27 to offset that some...

They do not call it deemed taxes .....its a confusing topic but if you call RC and ask they will explain it better ...( you will need to discuss it with a higher level employee)

What are the amounts of Deemed taxes going to be? For instance is it going to be 5% for 2010 on top of regular taxes? Will it be 10% or more?

Is there a table outlining this somewhere?

If you will be attending the hearing on feb 14, 2013. and will be making an oral statement about the impact of taxation, please let me know! I am regretably unable to attend. I have been put in a unique situation, where I have received retro payments, from SISIP that ran over 12 years. I have seen the Deemed tax inmplications, and how unfair they are, as will alot of you. I have taken CRA to court over what I felt was unfair Taxation, of QRLSPs, especially QRLSPs that go back over 5 or more years. I tried the Fairness provisions, to offset the Deemed Taxes, but was turned away by CRA saying that QRLSPs dont qualify for tax relief. I challenged that, in the Tax court of Canada, only to have the Judge agree that this Deemed Tax was "Interest". But there was nothing he could do, as it would take an Act of Parliament to change QRLSP Legislation. So i met with my MP at the time . the Honorable Tony Clement, and reviewed with him my situation and he, appeared to agree with me, that this looked unfair also, and would make enquiries. Last word I got, was they would have to go through the GOC, to have changes made to the QRLSP Legislation. So far to my knowledge this has not been addressed. So if you feel that these Taxes will hurt you Big time, If you can attend , please bring up this important issue to the Judge, because I really fear there will be nothing we can do , but live with the Huge tax burden, after this settlement is over. Deemed taxes will really impact alot of us I think. One of my other concerns for Vets, that have Retro, that go back further then 10 years, is that, the Deemed Tax burden will, put you in a higher Tax Liability, than if you claimed it all in the tax year you received it. ie the QRLSP calculation may be more Damaging, than claiming it all in the 1 year. Some, may get their tax return, and say, when did I become the CEO of a large corporation, or a Doctor, or a lawyer. If you have a long Retro, going back 5 or more years, get in touch, with CRA, and try to get the real picture of how much you may have to pay in Taxes.

thanks buds.

propat

Propat, I salute you for recognizing how good this deal is, I wish you luck in you individual tax issue

nav our tax rights WERE NOT traded away with this deal.we still have as much right as any other canadian to send in any tax form we are LEAGALLY entitled to.if you ore anyone elce thinks that sending in a form that cant be sent till we get our worksheets becouse we would need a copy of that(hence after the agreement is signed)ore any other helpfull tax info is some how an attack at you the lawfirm the deal ore anything elce you are wrong.

propat

Thank you, Peter, all i was saying is the taxes could never have been altered or change because in doing so you would have to change the income tax act and that will never happen! Guys, don't you think if there was a way out of this ,Peter and the law firm would not know or tell us, taxes are bad and were paying them

verry good advice call.

propat

My main advice to the class, is to expect to pay more then 20% in taxes in some cases ,and to be prepared tax time.