Feb 13, 2017
We are having great discussions via email, phone and in-person with many. This week's newsletter is a question (by a non member) and Randy's answer to his request for clarity about a hypothetical $100k tax debt in the Jan 30th message.
It went something like this:
I'm wondering how you come up with the 40,000 dollar reduction by the tax court appeal? and then reduced to 30,000 by a consumer proposal? I spoke with a trustee and I don't think that's exactly how it works. You first have to sell all your assets that are not protected by law that the CRA can take and then they look at your income. There is also the point that your credit rating is in the toilet after doing this and I'm not sure what happens if your mortgage comes up for renewal during the 5 years.
I had to write this because it sounds like you put the best possible outcome, yet as I was told by the trustee.... the CRA never loses and they are the richest dept. in the govt. There are a lot of individuals that are going to jump on Jeff's appeal and again may give money they don't have.
I guess my point is if you are going to put a hypothetical example that looks like a best case outcome, put a worst case too, so people are seeing both sides.
Great points, _____. We try to be cautious about putting opinions out there especially to the public (our 1,200+ database with many varying attitudes and circumstances).
The info you were reading normally just goes to our smaller like-minded group called members. Temporarily, yes that info is searchable to public on our site and hey, let's face it, it's there for strategizing and comment among the group but also to say to other like-minded individuals who are not yet members 'the overall benefits including library resources and weekly newsletters are definitely worth a hundred and fifty bucks.'
- Tax lawyer Jeff Pniowsky is on record for citing optimism in getting a 40%+ reduction to the average GLGI tax bills (what he calls a measurable benefit). His position is clearly stated in a 50 minute telephone conference call available in our members site. To those even remotely considering the option of Tax Court appeal they have to hear and consult with the law firm. We are in no way involved in that other than as clients.
- Each trustee to their own position... our various trustee contacts agree about the credit rating hit (hell 65% of us are going down that path in any event when CRA starts collections)... but I have not seen or heard discussion that the Consumer Proposal process forces asset sales. Bankruptcy, on the other hand, certainly is restrictive as you point out and a last resort for some. Yes assets will be looked at as part of the overall proposal affordability and whether CRA says 'No, you must go the bankruptcy route' but I know 1st hand of individuals who would be destroyed by CRA debt to the tune of $400 to 500K+ who, independent of other factors, had CRA debt reduced by 50 to 73% and then 5 years of payments without creditor interference or accumulating interest. One fellow I see occasionally is not singing poverty... pays an affordable set monthly bill to his trustee for UNSECURED creditors including CRA, makes payments on his secured loans (mortgage, vehicles, etc), and his toys, truck, expensive car, pension and lifestyle apparently intact. Is he the happiest camper, no, but like everyone else he put himself there. Great learning resources on all aspects relating to trustees are available online.
- The 2 strategies cited... Tax Court appeal and Insolvency Trustees are a) independent of each other b) in one way or another necessary for a significant majority of our contacts (what other measures?) and c) optional obviously. Our motivation? We receive $0 compensation from lawyers or trustees so what's left? Arguably that we are directing traffic for some great people who won't soon stop seeking it from us. Oh, and that the greater the number of people who pressure the government resources by participating in legal actions can't hurt our own individual tax cases. Not at all enamored of govt.
- The other side of the tale ____, I personally know of some who have or will be completely out of CRA debt by write downs/write offs and avoidance tactics. Easy no, worthwhile maybe... for general public distribution NEVER. Accessible to investigative types like me in the members site, yes;)
That's it for this week. Any thoughts or concerns let us know.
Randy Shoeman - cell (306) 501-2613; firstname.lastname@example.org
Reno Giambattista - cell (306) 737-7476; email@example.com