October 26, 2004

• Well someone in Canada has to pay for that helicopter you guys sent to Iraq... (it got blowed up in Fallujah btw, we're going to need another)... :) j/k...
• Totally off-topic, mj, but when you told us your profession, I did find myself wondering about taxes, etc. Sounds like you might need to speak to an accountant or tax attorney.
• The (Canadian) government has corrected my income tax return on a few occasions, but it's always worked out to my advantage so I haven't tried to complain. As a result of this experience I'm inclined to give them the benefit of the doubt. I think the first thing you ought to do is call and see if they can explain it. With any luck they'll realize their mistake and correct it.
• I second middleclasstool's recommendation that you speak to a tax accountant. I don't know what Canada's income tax law looks like, but if it's anything like America's, it's a nightmare of Elm Streetian proportions. My own taxes are moderately complex (charitable writeoffs, interest writeoffs, some capital gains taxation, some non-work consulting income, various and sundry loopholery) and I have never regretted having an accountant handle them. There was a notable incident where I managed to forget, one year, to send in any taxes, and another where I was involved in a business that went kerflooey and had significant taxes in arrears, and my accountant stepped in and dealt with the IRS for me on both occasions, which was invaluable. Considering that your income rate was multiplied at a discrete percentage, I would guess that they assume your work is typically paid in cash, and that the multiple is their way of assuming that you've declined to report a significant amount of your income (be advised: I am not an accountant and all of the previous comes directly out of my ass). I'd recommend that you contact an accountant, discuss the situation, then ask him to (first) get you an extension (so you don't have to pay anything right away) and (then) investigate on your behalf why they've assessed your taxes this way. Then go one to look for ways either correct the error or reduce your tax bill from there. If it comes to pass that you need the representation of a tax attorney (some accountants are attorneys as well, but certainly not all, and of course accountant-attorney are going to charge you a premium for their services, and why pay up front for something you don't know you're going to need, right?), you get get a reference from your accountant then.
• If they fuck up or your employer does then yes, they can and will come after you. I'm not sure of your situation, moneyjane, but my mother is currently working through a wicked audit with exactly the same result (2x taxes) because her (Canadian government) employer fucked up and added another year's income to her 2001 declaration. In her case it is a matter of dates. She only earned $14,500 in 2001 but they are wanting $38,000 based on income she earned in 2002 because the 2002 income was backdated to 2001. So check the dates on everything and see if the timing adds up. It has to be a fuck up like that for them to make that big a mistake. I assume you are joking about revealing your profession so I'll leave it at that.
• I assume you are joking about revealing your profession so I'll leave it at that. That'd be a mistake, Jerry.
• Sounds like you got screwed! (sorry, couldn't resist ...)
• I may have screwed up with the actual return - so I'm trying to get them to give me a breakdown of where they think this income came from. And yeah, I really did declare my profession. Stupid? Maybe. But it's not illegal, and I'm not wanting to get bogged down in creating a fictional source of income. Now, that may have done me in, or more likely, I've done something stupid on the return. However, to answer the question I've posed, apparently they can decide what your income is, and tax you on it, using some formula of income on past returns, according to the guy I talked to.
• I know that they tax waitstaff in the US based on what the government thinks that their tips should be (this, in turn, is based on what the gross sales for the server are). So perhaps they believe that your profession typically underreports income by a certain percentage. Or maybe the local agent of your version of the IRS is hoping you will pay him a visit to work things out.
• Disclaimer: IAAA. (I Am An Accountant.) First, kudos to you for filing a return. Second, visit an accountant post-haste and ask for further advice in responding to them. Third, if you refuse to pay the additional tax as they've calculated it, be prepared to show them meticulous records of your fees (& tips!) earned for the year, bank statements showing corresponding deposits, and receipts detailing your deductions. Expect to get this kind of hassle on future tax returns as well. But as long as your records are good, you can beat them. On preview: if you are going through life as "cash-only," you should not. You are in business for yourself and you need good records. Use debit cards, write checks, and make deposits. It'll back up what you say on your tax return and those audits are going to be a lot easier.
• ran across this on a canada bb: It's not illegal to work as an escort. It is illegal to not pay income tax on earnings as an escort. There was a recent newspaper article in the Toronto Star about "underground businesses" and Canada Customs and Revenue Agency. Apparently, they are taking a closer look at businesses where underreporting or non-reporting are historic. Should make every agency and independent run to H & R Block in a flash! any clue there?
• Revenue Canada are pricks. I've been hassled every year for the past four years, and Ive had an accountant process my returns! Each year they request more documentation, and I have to go back to my accountant to rectify it and it ends up costing me another $120. This year they sent a letter asking for proof that I have kids (I've claimed them every year since they were born), and requested copies of their birth certificates. That was 3 months ago and I've ignored their letters and refuse to play their games anymore. Fuck them! I'm sure I'm in for a surprise when I send in next years form, but I don't care.
• My one piece of advice has to do with attitude. Don't be intimidated. This is a business disagreement; treat it that way. If you can think like this, you'll be a lot less stressed out. Good luck.
• Well...they added an extra $25,049 as income for no apparent reason. I'm going to try that at the bank, "I've noticed my balance is $453.00. Please adjust that to $45,300". While I'm fortunate to like escorting, I'm in it to pay off the debt I already have. Like any freelancer, I can make a stack one day, then absolutely nothing for 2 weeks. So I'm not paying it. Period. I have no employer, and no assets. I'll play fair at the moment, and work through their system to get their mistake fixed. If, however, they blow me off, there is no incentive whatsoever not to go underground. Many of the women in my line of work are on social assistance, in order to declare that as their income. That's not something I'd ever do, but it points out a problem with how Revenue Canada collects on this type of income. BTW, the only person I know who declared themselves an escort immediately got audited, so I was expecting that. I'm really, really hoping this is some kind of simple error on their part, and not an arbitrary escort "tax".
• moneyjane: If you're paying taxes, then the Canadian Government is living off the avails of prostitution, which is a criminal offence in Canada.
• but rocket, i thought being an escort WASN'T illegal in canada.
• from canadian sex trade web site: Prostitution is legal; pimping and operating or being found in or working in a "bawdy house" (every place where one or more prostitutes regularly work or where "indecent acts" are performed) are not. Solicitation in public is also illegal, which covers street and hotel prostitution. Massage parlours which provide handjobs or more are semi-tolerated. Generally the best bet are outcall escort services (which operate on shaky ground also, but are legal for both the prostitute and the customer) and independant call girls.
• The Criminal Code specifies the offence as "Every one who...lives wholly or in part on the avails of prostitution of another person, is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years."
• They sure the hell are; and at the city level it's even more obvious - getting a business license in Vancouver for most businesses is less than $500, but a "Massage Parlour" license is $5000 or so. It's an open scam. The city lives off the avails, and the MPA's (massage parlour attendants) and escorts stay out of sight and so don't get bothered by the cops. If you want to treat the whole thing like a farce, fine, but be consistent. I'm keeping my fingers crossed that this is a clerical error. If not, I'm not going down without a very noisy and public fight.
• ah, rocket, wouldn't that be pimping? as opposed to actually working as an escort?
• but then again i guess revenue canada can be prosecuted for pimping? is that what you're saying?
• That's correct SideDish, and why I work only as an independant outcall-only call girl. If I did incalls (worked in my home) I'd be running a bawdy house; as an independent no-one except the Government of Canada gets a cut of my income/avails.
• Sheez. Good luck, mj. It really boils me when it's the ones stepping inside the line and trying to do things legally that get stung.
• Well you know, I had to get all fancy and shit and do this instead of running dope across the border in hockey bags like all the other kids. *hopes it's a clerical error, goes back to forging Tongan passport, airline tickets, and big cardboard lottery winner cheque just in case*
• Here's an article from an accounting organization - the last section deals with Revenue Canada's "net worth assesment" where they say that once the weasels at Revenue Canada have made an assessment, it's up to you to provide the paperwork to prove them wrong. Might be time to call a lawyer if you want to fight it.
• moneyjane, you are beyond a doubt the most interesting person I've never met. As they said in ancient Sumer: 'You can have your Priests, you can have your Kings, but the man to fear is the taxman.'
• Some will try To silence The ones who dare Live Not in fear But fer christsakes get a good accountant
• No doubt...live and damn learn...here's John Lowman, my favourite shit disturber, with a lot to say regarding prostitution law in Canada, with both the academic research and straight-up street sense to back it up.
• mj: They're most likely simply assuming you're full of shit about your income, most likely based on past filings and what other people in your line of work file. Which is insulting when you're playing honest, but it's one of the risks of self-employment (I'm an IT contractor myself, and have been warned that big swings in declared income from year to year can trigger audits). Fleeing to Tonga is a bad idea. Nasty little government, and I doubt they welcome working girls. It's legal here and Australia, though. (Although I'm not sure how easy immigration then is. Proving you're a skilled worker in a niche where there aren't locals to cover demand could be awkward).
• Revenue Canada is not your friend, and they don't fight fair. Engage some professional advice. Trust me on this.
• Wait a second . . . you all are saying in Canada pot is legal, call girls are legal and you're not ruled by an arrogant chimpanzee? I think I may seriously have to look into emigrating to Vancouver! 40 F for a low and 56 F for a high today . . .I suppose that's not too cold . . .
• And boys can marry boys and girls can marry girls. So basically, two hot chicks can hire me for their naked bachelorette party, and we can all smoke dope and make out. Canada; it's a Northern Paradise. With pot and better beer.
• Prostitution is only legal in some parts of Australia rogerd. Here in our fine city, we still have intermittent (and often hypocritical) hysteria campaigns about prostitution.
• Hey, SixDW! Don't be comparing The Shrub to a chimpanzee. Us simians are sensitive about that kind of thing. ;)
• moneyjane, all decisions by any federal body are open to appeal and they quickly back off if one keeps going. I've had a couple of occasions to do this dance with revcan, and CPP, never losing yet. I still owe them several thousand from years ago, which i diminish by payments and finding ways to reduce the amount owing by using their own legislation. I even have developed a good relationship with my "collections" worker, who kept telling me I wasn't eligible for this or that. Take the time to browse the act and their website and all can be revealed. Be creative, the one thing autocrats lack and are hence vulnerable to.
• So basically, two hot chicks can hire me for their naked bachelorette party, and we can all smoke dope and make out. Then I come to the door delivering pizza, but you three girls don't have enough money to pay the bill...
• Bow-chick-a-wow-wow! I am so moving to Canada tomorrow.
• I've had a similiar experience. The key thing is you've got to be able to account for all the incoming money that Revenue Canada thinks you obtained during the year. So if your bank accounts show you deposited $50K during the year and you only delclared 20K in income your in trouble if you can't show a paper trail that explains the 30K wasn't income. Contractors get caught by this all the time: they only declare say $40K in income and all their books match but the gov't notices that lease/plates/insurance/maintence on the shiny new F450 they are driving (even though not taken as a deduction) is more for the year than they supposedly made. Unless they can show a lottery winning or something they are boned. And they goverment can and will assess what ever they feel like at that point and now it is up to you to prove you didn't make that much. If you have stated an honest amount on your return I'd hire a tax accountant. If however you failed to declare any income that there is any chance they can prove you need to wiegh the possible penalties. It may be cheaper to just pay the assessed amount. Again a tax accountant can advise you. On the upside if the worst happens and you are forced to pay the goverment will work out a payment plan at a fairly reasonable intrest rate. Which may be preferable to emigrating.