Legal Fees (Assorted Topics)

propat, I never thought I would say this but, this discussion is making me anxious to file my 2013 tax return. LOL.

hmmm I would say ALMOAST completely unavoidable.

propat

Immoral, and unavoidable.

right you are trooper ive put all mine away and will figure out what to do with it after tax time.the horrible thing about this as far as im concerned is that the guys that got fracked the most will be told to take it in one year and thus instead of paying close to 25% witch they would have in the past may end up paying close to 50% effectively having 25% of their clawback clawed back!!!!! ya see it may not effect me that much as a 5 year guy but what it will do to these guys really pees me off its fracking immoral .

propat

Hi again propat, good friendly, and interesting discussion here. In my view everyone's tax situation varies from person to person, what may benefit some, will not benefit others, there is no way to avoid paying taxes, so the bottom line is this, 1. CRA will determine which method will benefit us most ( calculating it going back ) or
( calculating it all in 2013 ). So one may see this as being of some sort, or kind of a relief, sort of speak.
2. We also will be able to claim our Legal fees, for our 2013 tax return.
So things may not turn out to be so bad for some, as others may get hit hard, that is why I think that putting some money aside, in the event that some may get hit hard, would be a wise decision to make in this situation.

trooper im not sure how many years you go back but here is an old post of mine useing ACTUAL calculation of one of our own members here who has been through this and tried to fight it as he did not think he should not be penalized for the GOC frack up.nore do i.keep in mind this is only federal tax its much worst when you add provincial.



After talking with Peter this morning I have decided to send a letter of objection based on the Tax Nuetrality top up of 3.27%.

Heres why: I will show you a QRLSP Tax return I did from 1990-2002 having the income spread out and being assessed with the revised Taxes + the additional Deemed taxes so you can see the impact, that alot of Zero Sums are facing. Note revised tax is also known as the( Tax Difference)

revised tax 2002 = 0 Deemed tax =0 Deemed tax % applied=0
revised tax 2001 =0 Deemed tax=0 Deemed tax % applied=0
revised tax 2000=1202.83 Deemed tax=121.40 Deemed tax % applied=10%
revised tax1999=1830.64 Deemed tax352.29 Deemed tax% applied=19.5%
revised tax1998=1887.64 Deemed tax528.74 Deemed tax % applied=28%
revised tax1997=1823.89 Deemed tax680.15 Deemed tax% applied=38%
revised tax 1996=2490.17 Deemed tax1136.89 Deemed tax % applied=46%
revised tax 1995=2419.79 Deemed tax1350.65 Deemed tax%applied=55%
revised tax1994=2607.23 Deemed tax 1864.78Deemed tax%applied=72%
revised tax1993=4582.84 Deemed tax 3939.43 Deemed tax applied=86%
revised tax1992=1725.44 Deemed tax1733.18 Deemed tax %applied=101
revised tax 1991=0 Deemed tax =0 Deemed tax% applied= Guess 120%
revised tax 1990=678.64 Deemed tax=993.93 Deemed tax % applied=146%

This was just the federal portion. Total Tax Difference= 21,249.11 Total Deemed taxes=12,701.44

Deemed tax % overall= 60% in additional Taxes Tax nuetrality top up + 3.27% ? is it even fair or close?.


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propat

trooper you hold that guy to his word buds because if you take it over the past years YOU WILL BE CHARGED DEEMED TAX!!!! yes you will have a choice and anyone with around 5-6 years MAY benefit from taking it over the past years next to no one with more than 6 will not benefit from this and have to take it in one year.

sapper you have gone many years yes even if they were in the lowest tax bracket and taking it in one year puts you in the highest you may be thinking they will say take it in the past years.
they will not with yours I guarantee you right here and now they will say take it all in one year and my advice do what they say.just so you know and are prepared for this.

ive been through this with peter as well.

by McInnes Cooper on Fri 11 Jan 2013, 14:14
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Fair enough. I accept your apology and appreciate it. To be clear I asked to clarify what you were referring to at the outset of our conversation, to ensure we were on the same page. Particularly where we also had a discussion about deemed taxes really being interest as noted by the Judge in your previous case. (No one, except the CRA of course, generally refers to it as deemed taxes, and I am reluctant to call it this so other members do not think it is a penalty of some sort).

In any event, I thought we had a fairly high level useful discussion about the issue. I agree it is not morally or ethically correct that the refunds will be taxed in the manner they will under the ITA, either in the year they are received, or under the QRLSP. That is however, what the ITA and CRA will require. My main point is that, there is (and was) no legal way to force a higher contribution toward this tax exposure.

Again, I encourage you to write to the Court on this issue. However, in my view the global resolution, while not perfect, is an excellent result.

All the best..


McInnes CooperModerator

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Registration date: 2012-09-05


propat

Yes Sapper, we at least will have a choice into which manner will benefit us the most.

Sparrow, anyone can fill out the form, and send it in, Manulife will send it to you, and CRA will do the calculations for you.
I would advise that you have and accountant do your taxes for you, at least this time around, better to air on the cautious side.

Trooper, so what do we do at tax time, do we still have an accountant or tax preparer do our taxes or do we just send in the tax return with appropriate forms and they do it in house at CRA?

Great info Trooper...It has me quite worried about tax time. My retro did go back to 1989 and I have some put away in a liquid account just in case of extra taxes owing. I had heard about the tax penalties, but they never made sense to charge us for money we never had. It was beyond our control...
Sapper

Ok teen thanks, the way it was explain to me was that when we file our taxes, the T1198 form will be sent in with our taxes. CRA will calculate each year back from which we would have received it, when making their calculations if certain years put us in a higher tax bracket, which puts us in the owe the tax man category for any given year, and or years, interest will be charged on the amount that we would have had to pay for that particular year, or years. This is where some would consider a tax penalty. However if this type of calculation does not benefit us, in other words if claiming the whole retro for the 2013 tax year turns out to be more beneficial to us, we have the choice to claim it that way. Some individuals depending on their income throughout the past years may find, that it is more beneficial for them, to pay the interest if any, as calculated by the CRA. So my understanding is that the only penalty, and or penalties, that may be applied, is if and individual chooses to take the going back calculations, and is charged interest, even though choosing this route may benefit certain individuals.

If CRA adds the retro to your 2013 income then your income for the year will be a lot higher so prepare to pay a bit more taxes. If this T 1198 QRLSP form helps us rather than screw us than we will see. I for one had my accountent check on my 2012 taxes and as it stands now I will owe a lot more and I for one do not think 3.27% is any were close to enough to cover the bill on penilties(if there are any), subject to change with more information.

Trooper I tried looking for it but couldn't find it. During the negotiations when Peter D was still sharing info he sent me a quote straight from the tax laws book that all retro money can and will be penalized by CRA.

It's the law so that is why we all got a 3.27% tax penalty interest top up on our retro to take care of the tax penalties we are going to get hit with.

Navrat, if you are worried about it, my advice would be to contact and accountant to look into it for you. The accountant can get it in writing for you, just remember to be specific about information given about your retro. The reason for this is that there is certain criterias where tax penalties would be applied, when receiving lump-sum payments, however I was assured that in our case tax penalties would not be applied. Let's hope they got it right.

Anything official because I am scared of tax time it's giving me Walking dead syndrome