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How the Canada Revenue Agency abetted Brian Mulroney - Part 3 : CRA
SOTW

To get you up to speed, Brian Mulroney received at least $225,000 in
cash, which he was lax in reporting on his tax return.

Now, Mulroney claimed that he did not declare the $225,000 as income
because it was not yet income – it was simply a retainer for future
services. But if he really believed the money was not taxable then why
did he suddenly change his tune? In 1999? Four years after receiving
the money. Because Brian Mulroney still had not delivered any services
to Schreiber by 1999. So why did he suddenly decide that the $225,000
was income? In 1999. When he stated that he clearly believed that it
was not income – his excuse for not declaring the money in the first
place – until he had rendered a service.

Clearly something is wrong here.

But the Canada Revenue Agency did not ask any questions. Nope. Instead
his lawyer’s negotiated a deal that, allegedly, allowed Brian Mulroney
to escape payment of half the tax that would have normally been owed.
That’s right, he had the immediate ability to pay in full plus
interest and penalty but the CRA allowed him a steep deduction for
being so honest and forthright and coming forward and declaring the
money he had forgotten to declare previously. What an upstanding thing
to do and what a great example for and to all Canadians. Coming clean
like that. Laugh.

And when Brian Mulroney was questioned about the memory lapse and his
lax reporting of his tax duties and his lenient treatment by the tax
authorities what did he have to say? Did he take responsibility for
his actions? Nope. Brian Mulroney blamed his lawyers and he blamed his
tax advisers. It was everyone’s fault. Everyone’s but his. Now, if the
advisers gave him the wrong tax advice then surely it was their fault.
But if he did not disclose to them that he had received $225,000 (or
perhaps as much as $300,000) then it would not be their fault. It
could not be their fault. Because they did not know. So their advice
was correct based on the information that Brian Mulroney disclosed to
his professional tax advisers.

And there’s another kicker.

Pleading ignorance is no excuse for not obeying the law. Any law. Not
just tax law. And when you sign your tax return you are saying that
you have knowledge of the returns contents and so are responsible for
what follows. And when you are a SOPHISTICATED person who is a lawyer,
a lawmaker and a former Prime Minister then ignorance is absolutely no
defense. Yet the CRA accepted this argument and let Brian Mulroney off
the hook.

And this result, Brian Mulroney’s escape of paying his honest share
and the CRA’s lax behavior in enforcing tax law is what is now
emboldening more and more Canadians to pull a Mulroney – to declare
less than what they have truly earned on theirr tax return.

NEXT WEEK: Brian Mulroney and the World’s Number One Tax Haven


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Visit the CRA SOTW Library at http://canada.revenue.agency.angelfire.com
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Alan Baggett – http://www.angelfire.com/tx5/taxbible – Tax Collector’s
Bible