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FROM: MAR-APR 2008 ISSUE
Details on Tax Relief Measures
The CRA has set up a toll-free GST/HST rate reduction line for businesses and consumers at 1 866 959 7797. Information on new tax measures is available at www.cra-arc.gc.ca/economic and at www.gst.gc.ca.
Taxpayers can find details on tax credits and services for individuals and businesses posted regularly at www.cra-arc.gc.ca/taxtips. For more information on the tax measures passed into law on December 14, 2007, visit www.fin.gc.ca.
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RRSP/RRIF Scams and Schemes
The CRA is finding an increasing number of questionable RRSP and RRIF tax-free withdrawal schemes. Tax professionals may want to advise clients to avoid schemes promising:
- Withdrawal of funds from an RRSP or RRIF without paying tax. Promoters often promise to return part of the taxpayer’s investment by offshore debit or credit cards, offshore bank accounts, or loan-back arrangements;
- Immediate access to assets in “locked-in” RRSPs or RRIFs; income tax deductions of three or more times the amount invested;
- Unrealistic returns on investments.
Promoters of questionable schemes often instruct the owner of a self-directed RRSP or RRIF to purchase an investment through a specific trustee. The investment could be shares in a company, units of participation in a co-operative, a mortgage, or other types of investments.
The CRA has reassessed over 3,100 taxpayers who participated in such schemes, resulting in additional taxable income of approximately $144 million.
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