June 08, 2020
So You Don’t Think The CRA Is Going After Personal Value Of A Business Paid For Expense…. Think Again
“The circumstances giving rise to this appeal are unusual and exotic, but the issues that arise in the appeal are not,” wrote Federal Court Justice Mary Gleason.
“I find that the motivating, essential and overwhelmingly primary purpose of the travel was personal,” wrote Tax Court Justice Patrick Boyle at the time.
The Tax Court had set the business portion of the trip at 10 per cent, or $4.2 million, which means that the remaining 90 per cent of the trip ($37.6 million) represented the amount that is a taxable benefit.
So You Don’t Think The CRA Is Going After Personal Value Of A Business Paid For Expense…. Think Again
It’s amazing the lengths people go at organizations to try to bury their heads in the sand and try to deny the taxable consequences of a cellphone that is company paid.
They readily admit that there is personal usage (because no sane person is going to deny it) of a business paid for expense.
When we show them that the CRA has tripled down on cellphones since they called us to Ottawa; it makes lives more difficult for them to deny the tax consequences, especially when we show them the HST changes. “I find that the motivating, essential and overwhelmingly primary purpose …. was personal,” wrote Tax Court Justice Patrick Boyle at the time. The appeal was denied and the arbitrary number that was assessed by a lower tax court was upheld.
90% of the benefit went to the individual and 10% of the benefit was legitimately a business expense.
The key here is that the CRA made an arbitrary evaluation, and there was nothing to substantiate a different number. The CRA is allowed to do this, and you have to prove a different #.
mobilityView provides the substantiation that is better and more detailed than any wireless operator billing system.
It will make it very difficult for the CRA to dispute the number that we provide, as the documentation is more than sufficiently detailed.
Use mobilityView to ensure your company is protected and in this instance the CRA will be going after $10m in back taxes, penalties and interest for the failure to properly substantiate and account for the business portion of cellphone bills.
Use mobilityView as an employee to protect yourself as the CRA is now going after $36m in personal benefits were no tax paid was paid PLUS interest PLUS penalties
We are the global experts in the field of cellphone taxation & splitting business vs. personal costs.
We were featured in Forbes for tax compliancy in Canada and USA : https://lnkd.in/eeVr-_J
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