Bawdy house owner hit with $420K tax bill

[susi]

the other side of enforcement...good reasons to keep your taxes up to date....

http://www.cbc.ca/news/canada/montreal/bawdy-house-owner-hit-with-420k-tax-bill-1.2673681

Dan Xu, a Brossard, Que., woman convicted last year of running a bawdy house and living off the avails of prostitution, is now facing a $420,000 tax bill from Revenue Quebec in connection with the crimes.

The provincial tax agency says Xu made more than $1 million in undeclared revenue between 2005 and 2011.

Revenue Quebec spokeswoman Geneviève Laurier said Xu’s income stemmed from illegal activities run out of a business in Montreal’s Saint-Laurent borough.

Income is income, whether it’s from legal activities or not, and it has to be declared, Laurier told CBC News.

“Tax law does not differentiate,” she said.

Laurier said going after revenue from illegitimate activities is most common with drug trafficking, but cases like Xu’s are rare.

The undeclared funds helped to finance Xu's Brossard property and her daughter’s house in Montreal.

Revenue Quebec has now obtained a court order to ensure the money is recovered through Xu's real estate and financial holdings.

 

[overdone]

I personally have no sympathy. Tax evasion is tax evasion.

lol, no, it isn't

there is legalized tax evasion, after all, if you have the power or the friends with power and ability to design the laws to evade the taxes "legally", it's still the same thing

it's just a matter of perception, bias

the tax laws in Canada are certainly not just, balanced and most importantly fair for everyone

 

[susi]

i feel like if we want to be viewed as full citizens we should pay like full citizens. i do agree that big corporations and rich folks get away with paying next to nothing so it falls to the lower and middle classes to foot the bill....but that faces all canadians in our income brackets...

i felt it was an important wake up call for all of us that even if the laws do finally get struck down or if we find a way to get around new laws...they will find other ways to attack us and undermine our safety.

i was trying to get an escort license a number of years ago and had i big fight with the VICE officers about approval of my license. i couldn't get it because i had prostitution charges on my record....yeah...i know....so stupid...anyway, i threatened to get a lawyer and they said "if you wanna play hard ball, we'll play hard ball"...the next thing i knew, i was being audited for GST...i paid my taxes but not GST and so they wanted $30,000.00 based on my declared income....i ruined me financially....

some people here believe the police will do the right thing, that they won't stoop these kinds of tactics....in vancouver ...sure, we fought long and hard to make them see reason...but in other places, i can see the income tax/ GST audits being used to attack our community. i don't hold alot of faith in the honor of police officers, they have proven over and over that they only care about making their quotas and ensuring their full funding for the next year...in other words, they just want to justify their jobs and don't care about us at all.

love susie

 

[canuck33660]

i feel like if we want to be viewed as full citizens we should pay like full citizens. i do agree that big corporations and rich folks get away with paying next to nothing so it falls to the lower and middle classes to foot the bill....but that faces all canadians in our income brackets...

i felt it was an important wake up call for all of us that even if the laws do finally get struck down or if we find a way to get around new laws...they will find other ways to attack us and undermine our safety.

i was trying to get an escort license a number of years ago and had i big fight with the VICE officers about approval of my license. i couldn't get it because i had prostitution charges on my record....yeah...i know....so stupid...anyway, i threatened to get a lawyer and they said "if you wanna play hard ball, we'll play hard ball"...the next thing i knew, i was being audited for GST...i paid my taxes but not GST and so they wanted $30,000.00 based on my declared income....i ruined me financially....

some people here believe the police will do the right thing, that they won't stoop these kinds of tactics....in vancouver ...sure, we fought long and hard to make them see reason...but in other places, i can see the income tax/ GST audits being used to attack our community. i don't hold alot of faith in the honor of police officers, they have proven over and over that they only care about making their quotas and ensuring their full funding for the next year...in other words, they just want to justify their jobs and don't care about us at all.

love susie

Susie I do admire the work you do but I gotha disagree BIG TIME with some of your premise here.

Are you implying that application of income tax laws is a way of the government finding another way to attack escorts? "they will find other ways to attack us and undermine our safety"

Because CRA audits lots and lots of people/companies all the time.

Had you paid your GST as required by law then what would your GST audit have yielded? Was the requirement to collect and remit GST correctly applied in your case. If so they did not cause your financial ruin you did by not remitting the taxes.

I mean there are lots of unfairness in the tax laws BUT I don't think you will get much sympathy from those of us that have to pay our taxes.

Off topic but here is a good example of unfairness in tax laws ...... A while ago I owned a manufacturing business. This business required that I put labels on my products. The labels could be purchased without PST because they went into making the product or so I thought. The PST auditor charged me PST because I did not self remit PST on the portion of the cost that the non sticky back sheet of paper that held the label represented because he stated that portion was not used in making the product. Who knew?

It seems to me that if you correctly pay your income taxes and GST then an audit will not cause you any grief.

I mean we all hate being audited and CRA often will pick on a profession or business in their audits.

Do you think that the guys in the construction industry are being persecuted by the government? Because a lot of my buddies in the construction industry are ALWAYS being audited.

How about the guys who own bars? The Provincial government has a mandate to audit them for the PST at least once every 6 years.

And the CRA has had audit projects that audited restaurant worker for unreported tips and real estate salesmen etc etc.

Sorry but the way I see it is if someone is not paying their share of taxes then I am having to subsidize them for the share they should have paid.

 

[johnniejetpack]

Agreed Susi, there will be dues to pay one way or another. Most self employed people keep a contingency fund aside in case they run in to unexpected tax or other expenses, It's prolly a good idea for SP's to do this as well, you are probably already doing this. 42% (what the quebec lady was charged) is excessive, but certainly everyone should have 15 - 20% of your annual income stashed somewhere in case of a rainy day :nod: The more the better.

The other thing noted here was the government was tracking her assets, be careful if you or your family members own property or other tangible assets

Keep doing what you are doing sisters we appreciate your efforts.

 

[CAEC]

If a person is subjected to an audit as a response to some other interaction with the police, that is corruption on the part of the police and the auditing agency, regardless of the justification or outcome of the audit.

 

[susi]

Susie I do admire the work you do but I gotha disagree BIG TIME with some of your premise here.

Are you implying that application of income tax laws is a way of the government finding another way to attack escorts? "they will find other ways to attack us and undermine our safety"

Because CRA audits lots and lots of people/companies all the time.

Had you paid your GST as required by law then what would your GST audit have yielded? Was the requirement to collect and remit GST correctly applied in your case. If so they did not cause your financial ruin you did by not remitting the taxes.

I mean there are lots of unfairness in the tax laws BUT I don't think you will get much sympathy from those of us that have to pay our taxes.

Off topic but here is a good example of unfairness in tax laws ...... A while ago I owned a manufacturing business. This business required that I put labels on my products. The labels could be purchased without PST because they went into making the product or so I thought. The PST auditor charged me PST because I did not self remit PST on the portion of the cost that the non sticky back sheet of paper that held the label represented because he stated that portion was not used in making the product. Who knew?

It seems to me that if you correctly pay your income taxes and GST then an audit will not cause you any grief.

I mean we all hate being audited and CRA often will pick on a profession or business in their audits.

Do you think that the guys in the construction industry are being persecuted by the government? Because a lot of my buddies in the construction industry are ALWAYS being audited.

How about the guys who own bars? The Provincial government has a mandate to audit them for the PST at least once every 6 years.

And the CRA has had audit projects that audited restaurant worker for unreported tips and real estate salesmen etc etc.

Sorry but the way I see it is if someone is not paying their share of taxes then I am having to subsidize them for the share they should have paid.

with respect, i got an accountant who worked through my receipts, all of which i had kept, and only really owed $8000.00 and had no idea that as an escort i was required to pay gst. i paid taxes every year...i still do....you have completely misunderstood my post and the way i do business.

government agencies work together all the time to enforce their moral code against "sundry" businesses. sex industry businesses are targeted often in this way. in vancouver they used to have the NIST teams. members of police, health, city inspections, fire, etc would go into businesses deemed to be a "problem premises" and use whatever code or by-law they could to make the business owners life hell....

this enforcement and subsequent publishing of the "earnings"of the business is backlash and police beginning to use their much discussed "discretion" to attack our community. they want to send a message about what kind of people we are. instead of looking through the books and realizing that most business owners, if they have any sense, pay their taxes and that the country actually benefits from the sex industry through these revenues.

instead, they publish a case of someone who didn't pay with a huge sum of money as they tax bill detailed in the press release. they did this to make outsiders/ canadians believe their assertions about the huge amounts of money being made in human trafficking of little girls. they are mounting a communications campaign which will be hard to beat with stories like this. they set the sex industry as outside of canadian society, non tax payers, a burden and a threat to regular communities....

i have always warned the community when i believe there is imminent danger and this is one of those times. everything is in flux and while they claim to want to focus on john's as the bad guys, it will be the workers and business owners who pay the price.

in the lower mainland approx 90% of workers work for someone else....

if they target the business owners, what will happen?

workers will be forced out onto the street and the jobs that remain indoors will become highly competed for....

essentially the same as it is now, but worse as advertising will become illegal/ more difficult as well .....

hope this makes sense to you and that you can understand why it concerns me.

love susie

 

[kauffman]

How do you feel about this susi?
I personally have no sympathy. Tax evasion is tax evasion. If we don't want to be treated differently because of our job then we shouldn't expect double standards. If she were running a daycare and evading tax I'd feel the same.

In fact, stuff like this only serves to make us look worse in the public eye. Perhaps that was the ulterior motve behind the charges.

Pssst... It's actually a global moral assessment.. God and the Devil are both resigning and they need to choose their replacements. I heard they have their eye on the same person...

 

[overdone]

Because CRA audits lots and lots of people/companies all the time.

Sorry but the way I see it is if someone is not paying their share of taxes then I am having to subsidize them for the share they should have paid.

lots of audits all the time, sorry basic math says bullshit

around 17million tax files, last stat I heard, 5000 auditors, would think it's more than 17 now and there was talk of reducing the amount of auditors, don't know if that actually went through

subsidizing others for what they should have paid, again, bullshit

which gov't, municipal, provincial and of course the federal, is completely debt free and/or not running a deficit?

the pricks in charge will spend all you give them and borrow as much as they can, despite what Trudeau says about budgets balancing themselves

even if everyone was paying what you think they should have paid, you'd still be taking it up the ass and then some

politicians of all stripes and of course bureaucrats, who really run the gov'ts, have insatiable appetites/greed when it comes to tax money, when it comes to their pet projects or to preserve their basic survival

they won't ever get enough, regardless of how much you or anyone else gives them

even if no one evaded taxes, we would still have debt and deficits, it would take decades to reverse the situation

just look at the morons in Ontario, 10years doubled the debt, 3rd largest expenditure is to service their debt, yet they still re-elected the same crooks to a majority

you really think the amount of tax evaded in Ontario would have made a difference?

 

[canuck33660]

lots of audits all the time, sorry basic math says bullshit

around 17million tax files, last stat I heard, 5000 auditors, would think it's more than 17 now and there was talk of reducing the amount of auditors, don't know if that actually went through

subsidizing others for what they should have paid, again, bullshit

which gov't, municipal, provincial and of course the federal, is completely debt free and/or not running a deficit?

the pricks in charge will spend all you give them and borrow as much as they can, despite what Trudeau says about budgets balancing themselves

even if everyone was paying what you think they should have paid, you'd still be taking it up the ass and then some

politicians of all stripes and of course bureaucrats, who really run the gov'ts, have insatiable appetites/greed when it comes to tax money, when it comes to their pet projects or to preserve their basic survival

they won't ever get enough, regardless of how much you or anyone else gives them

even if no one evaded taxes, we would still have debt and deficits, it would take decades to reverse the situation

just look at the morons in Ontario, 10years doubled the debt, 3rd largest expenditure is to service their debt, yet they still re-elected the same crooks to a majority

you really think the amount of tax evaded in Ontario would have made a difference?

So if 1/2 of the people don't pay their taxes what would happen?

Sorry but I get pissed when I pay my share of taxes and other do not.

I am not taking about how the taxes collected are wasted and not about how fair the taxes are.

Just that if the government does not get enough of it pound of flesh from us taxpayers who actually pay they will just increase the taxes till they get their haul. THATS what I mean by subsidize.

Please read my post again.

It was NOT about how the government spends our taxes.

And your comment about audits. Go and ask someone in the pub business how often they get audited for PST. Or ask anyone who is a realtor if they have been audited recently. Or ask anyone with rental properties that reported a loss if they have been audited or received a letter from CRA basically blackmailing them that they will be audited unless they amend their returns to remove the loss.

Please find out the facts before you call bullshit.

 

[Tugela]

i feel like if we want to be viewed as full citizens we should pay like full citizens. i do agree that big corporations and rich folks get away with paying next to nothing so it falls to the lower and middle classes to foot the bill....but that faces all canadians in our income brackets...

i felt it was an important wake up call for all of us that even if the laws do finally get struck down or if we find a way to get around new laws...they will find other ways to attack us and undermine our safety.

i was trying to get an escort license a number of years ago and had i big fight with the VICE officers about approval of my license. i couldn't get it because i had prostitution charges on my record....yeah...i know....so stupid...anyway, i threatened to get a lawyer and they said "if you wanna play hard ball, we'll play hard ball"...the next thing i knew, i was being audited for GST...i paid my taxes but not GST and so they wanted $30,000.00 based on my declared income....i ruined me financially....

some people here believe the police will do the right thing, that they won't stoop these kinds of tactics....in vancouver ...sure, we fought long and hard to make them see reason...but in other places, i can see the income tax/ GST audits being used to attack our community. i don't hold alot of faith in the honor of police officers, they have proven over and over that they only care about making their quotas and ensuring their full funding for the next year...in other words, they just want to justify their jobs and don't care about us at all.

love susie

But that was only possible because you had not been paying the appropriate taxes in the first place.

Another place the audit could have got you would be CPP contributions. For a self employed person it is double the normal amount (because normally your employer pays half).

If you are working as an independent contractor providing a service, there are a variety of taxes that need to be paid.

WCB insurance is another one, for example.

 

[Tugela]

If a person is subjected to an audit as a response to some other interaction with the police, that is corruption on the part of the police and the auditing agency, regardless of the justification or outcome of the audit.

It is not corruption, anyone can inform to Revenue Canada. If they use the threat as a form of coercion (and then do it) to achieve an outcome however, it becomes extortion and that is a criminal offence. You would have to prove it though, a verbal conversation would not be adequate.

What Susi should have done is gone back afterwards with a wire and got them to repeat the threat. Then they would have been in trouble . She would still have had to pay her GST though.

 

[Tugela]

This is just plain wrong Susi. Here's a quote from the National Post:

This progressivity can help us understand why the top 1% of income earners paid a staggering 21.2% of the total federal and provincial taxes in 2010. The top 10% paid 54.8% of all taxes while the bottom 50% of Canadian income earners contributed 4% towards the collective personal tax bill.

That is only because those top 10% earn an overwhelming bulk of the national income. They probably earn more, but if you are rich enough there are ways to shield a large part of that income from tax.

 

[newatit]

This issue of sp's paying their taxes and GST contributions, and CPP payments is a good one. Britain is including the sex industry income as part of the country's Gross National Product calculation. And important item. We are going the other way in trying to eliminate it yet still tax it. Can't you see the link here. If you report a sum to the tax man, they will know how successful you are, report that to the police who can then watch you if you are a high earner, find out who your buyers are, and then prosecute them. But yes you must pay your taxes.

A former SP who worked out of the Fraser Valley area has told me she has been threatened with charges in new location in Canada. She did not file taxes on her SP income, but did file them last year for all the missing years. She lead me to believe that she had been dealing with someone who knew how to file the taxes in such a fashion that suspicion would be avoided. didn't happen, too many computer links or whatever, but she was caught. She signed the forms, on the bottom line where it warns about an offence when filing falsely. Ignored it or thought a slap on the wrist is all she would get. She is the type that rather than realize the full extend of the predicament, she would lie and deny till the cows come home. They had her for over $24,000 in taxes at the time we communicated, and still counting. No mention of GST or pension allotment, but hey. I reported this on PERB earlier. I don't have any recent news, she has stopped communicating, but I am afraid she has created a scenario where others she dealt with are being dragged into a not reporting cash income either. i actually tried to find out if the CCRA had looked at my bank account but no luck on that


I feel sorry for her stupidity, not in getting caught, but for not taking her place in society and paying her fair share. She was greedy, knew it all, and blamed others now. She blames those who paid her in an identifiable and traceable manner. She hadn't accepted the fact that she falsified documents she signed, not her clients. It was up to her no matter how she was paid.

Tough eh?

 

[Tugela]

She would be hit with interest and penalties as well, if she backdated missed years where she owed money. That stuff can add up pretty quickly.

The people paying her have no responsibility, traceable or not, it will be her responsibility. The person receiving the cash is the one that has to collect the tax. If they don't collect it on top, it is included in the total. Either way, the responsibility is theirs.

 

[canuck33660]

with respect, i got an accountant who worked through my receipts, all of which i had kept, and only really owed $8000.00 and had no idea that as an escort i was required to pay gst. i paid taxes every year...i still do....you have completely misunderstood my post and the way i do business.

government agencies work together all the time to enforce their moral code against "sundry" businesses. sex industry businesses are targeted often in this way. in vancouver they used to have the NIST teams. members of police, health, city inspections, fire, etc would go into businesses deemed to be a "problem premises" and use whatever code or by-law they could to make the business owners life hell....

this enforcement and subsequent publishing of the "earnings"of the business is backlash and police beginning to use their much discussed "discretion" to attack our community. they want to send a message about what kind of people we are. instead of looking through the books and realizing that most business owners, if they have any sense, pay their taxes and that the country actually benefits from the sex industry through these revenues.

instead, they publish a case of someone who didn't pay with a huge sum of money as they tax bill detailed in the press release. they did this to make outsiders/ canadians believe their assertions about the huge amounts of money being made in human trafficking of little girls. they are mounting a communications campaign which will be hard to beat with stories like this. they set the sex industry as outside of canadian society, non tax payers, a burden and a threat to regular communities....

i have always warned the community when i believe there is imminent danger and this is one of those times. everything is in flux and while they claim to want to focus on john's as the bad guys, it will be the workers and business owners who pay the price.

in the lower mainland approx 90% of workers work for someone else....

if they target the business owners, what will happen?

workers will be forced out onto the street and the jobs that remain indoors will become highly competed for....

essentially the same as it is now, but worse as advertising will become illegal/ more difficult as well .....

hope this makes sense to you and that you can understand why it concerns me.

love susie

Susie I do get what you are saying. I think.

You are saying that the various government agencies ... cops, city officials, CRA etc. are banding together to create a toxic environment for escorts because the government want to impose their policy of eliminating prostitution.

I think you will find that the CRA has all sorts of targets in their sight for audits.

Right now the biggest one is offshore tax evasion. Anyone who has offshore investments including an investment account with US stocks (even though it is managed/brokered thru a Canadian brokerage account and therefore the details are reported to CRA) has to file a very detailed form that discloses each stock, its cost base at year end and at the highest point in the year, income earned and capital gains. I know I was surprised at the details of this tax form this year and had only a couple of months to figure it out.

Another target that CRA has been going after are construction guys being paid in cash and not reporting GST and income taxes.

I admire that you pay you share of taxes (including GST now) but how many in the industry do?

Those who are caught for tax evasion are regularly published in the papers.

The key point that I was trying to make is that if you want to eliminate the potential for penalties and huge tax liabilities file your GST and personal tax forms.

It may not eliminate the tax audits but if all your records are in order there should be no surprises.

Oh and who ever pointed out the CPP payments is absolutely correct. To me that is a 3rd tax in addition to income tax and GST.

Lastly the CRA now has a "snitch" line for everyone to report prospective tax cheats so its official ........ the CRA is the go to agency if you want to get back at someone.

 

[overdone]

Just that if the government does not get enough of it pound of flesh from us taxpayers who actually pay they will just increase the taxes till they get their haul. THATS what I mean by subsidize.


And your comment about audits. Go and ask someone in the pub business how often they get audited for PST. Or ask anyone who is a realtor if they have been audited recently. Or ask anyone with rental properties that reported a loss if they have been audited or received a letter from CRA basically blackmailing them that they will be audited unless they amend their returns to remove the loss.

Please find out the facts before you call bullshit.

facts, lol

look at tax freedom day, hasn't changed much over the last couple decades, if anything, it's gone down a little

taxes aren't being increased to make you subsidize anyone, pretty stable overall, vary a little depending on which province you live in

pretty much why they borrow, have debt, cause they don't want to increase the taxes, they like to stay in power, so once again, your opinion isn't backed up by the facts

just cause you know a few people who get audited in certain industries doesn't mean it's a LOT, your opinion of what's a lot isn't a fact

they target certain areas of the economy for a reason, it's still a drop in the bucket, the amount of audits is still small, saw a stat from 2008/9, if there were around 17million files, around 2% were looked at

so you know people who've been audited, so what, I only know one person, he was audited 3 times, he was well off, hired a good accountant and lawyer, did nothing wrong, his returns were accepted

your personal experiences or your friends stories aren't an indication of the whole

plus "threats" to audit, isn't an audit

it's their M.O

the CRA doesn't audit LOTS, it doesn't have the ability, manpower, plain and simple

 

[newatit]

Yes, the CRA has laid off something like 3000 auditors. They hit a lot of targets, set up a lot of people, collected lots of money and left a reputation behind. If your tax submission is logical, and fits the trade, chances are you will not be audited.
Those you deal with and paid for a service if found out likely will be audited if there is evidence or a chance that you paid them. Like if you had a landlord in a condo, and declared your rent, no issue. But if you rented space from another gal, and she didn't declare your donations, she is in trouble when you are caught too.

Just not worth the chance, and it can ruin your life for a long time. what is poetic about this and bill 36 is the promise of a fund to help SP's out of the business. so will they select sP's who have paid their income tax or not? Like that SP mentioned above cheated and is up for charges and she was told jail time was not impossible. so shouldn't this new fund bill her out, pay her student loans since she cheated to go to school and get out of the industry. Harper should turn this over in his goody two shoe stance.

 

[canuck33660]

facts, lol

look at tax freedom day, hasn't changed much over the last couple decades, if anything, it's gone down a little

taxes aren't being increased to make you subsidize anyone, pretty stable overall, vary a little depending on which province you live in

pretty much why they borrow, have debt, cause they don't want to increase the taxes, they like to stay in power, so once again, your opinion isn't backed up by the facts

just cause you know a few people who get audited in certain industries doesn't mean it's a LOT, your opinion of what's a lot isn't a fact

they target certain areas of the economy for a reason, it's still a drop in the bucket, the amount of audits is still small, saw a stat from 2008/9, if there were around 17million files, around 2% were looked at

so you know people who've been audited, so what, I only know one person, he was audited 3 times, he was well off, hired a good accountant and lawyer, did nothing wrong, his returns were accepted

your personal experiences or your friends stories aren't an indication of the whole

plus "threats" to audit, isn't an audit

it's their M.O

the CRA doesn't audit LOTS, it doesn't have the ability, manpower, plain and simple

I have pointed out facts like CRA's audit of offshore investments, the construction industry and rental income etc.

Also PST's audits of pubs at least once every 6 years is a fact.

And I would suggest someone being audited three times is a lot but again I will agree that that is just my opinion and not fact.

So I only have one simple question.

Do you have any objections to someone earning income and not paying their share of taxes?

I do.

 

[newatit]

I am with you Canuck.

by the way for what it is worth, the CRA has a website with convictions on it and the name of the person convicted and the penalty. easy to find, I just don't have the address right now handy.