tax debts

There are usually several sides to every story.  It seems like the Toronto Star reporter really spent a lot of time getting information from the key players in this drama unfolding in Toronto. Check out the following article: http://www.thestar.com/news/gta/2015/02/04/tax-fighter-philippe-dioguardi-has-serious-battles-of-his-own.html.

It is great that we live in a country where our courts get to make the decisions when it may not be all that clear who is right and who is wrong, and that may be just how this particular saga will finally get resolved.

Is this lawyer a hero for challenging (including, it appears, by not complying with) the rules set by his professional body?

The Law Society of Upper Canada sets out rules to protect the integrity of the process by which a lawyer may draw a client’s retainer funds that are required to be held in trust. Trust funds are sacrosanct. Many lawyers have been punished for messing with trust funds.

CRA definitely has the power to seize a taxpayer’s monies if there are unpaid tax bills. CRA freezes bank accounts, investment accounts (even RRSP accounts), places liens on houses and will garnishee wages every day.  If a person owes money to CRA and knows that the collector is going to seize his money, he cannot simply hide his wealth in a convenient lawyer’s trust account.  It is still the taxpayer’s money and the way the Income Tax Act and Excise Tax Act are written, CRA do not need a court order (or even a warning shot) they can just freeze and seize for unpaid tax debts including the money sitting in the lawyer’s trust account.

However, CRA is sometimes wrong and it seems only fair that the taxpayer ought to be able to use the resources available to defend against the CRA attack. The taxpayer should be entitled to legal defence, and the money the lawyer is holding on retainer to provide those services needs to be safe from being seized by CRA – so it is a fair fight.  That’s what I think the lawyer in question is saying.

But what do you think and what will the LSUC and the courts (if it gets that far) think?

The good news is that professional tax companies such as ours are not handcuffed by the Law Society of Upper Canada rules.  Monies paid to us for your defence against CRA are not open to garnishment and you can still avail yourself of all the types and levels of protection.

Protect your assets as much as possible. Tax Solutions Canada can help. Think a seize or freeze is in your future? Call us today at 1-888-868-1400.

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