No Rights, No Taxes is an exaggeration of course. Things aren't that good or that bad. But there is an opportunity for sex workers to torment Stephen Harper. It would only be fair given Bill C-36.
When the Harper Government passed Bill C-36, it may have made it a criminal offence for the Canada Revenue Agency (CRA) to knowingly accept tax payments from sex workers. This allows sex workers to withhold a portion of their income tax payment and file an objection with the CRA. This could be a major embarrassment for Harper in an election year. It could cost him votes. It could cost him the election.
Have you declared enough income to the CRA over the past ten years?
Are you paid up and in good standing with the CRA?
Are you willing to file with the CRA as a sex worker?
Are you willing to deal with some CRA paperwork?
If so, you can withhold any portion of your tax payment related to sex work (payment for sexual services) and file a formal "Objection" regarding the withheld payment. While your objection is being considered the CRA will suspend collection actions.
The standard disclaimers apply. I have no legal qualifications. I am presenting personal opinions rather than recognized facts.
The legal argument in brief is as follows.
Bill C-36, the so called "Protection of Communities and Exploited Persons Act", makes it a criminal offence for any person or agency to knowingly accept a payment from a sex worker if any sort of threat is used to encourage that payment.
The Canada Revenue Agency (CRA) uses threats to encourage payment of taxes. As a result, it is a criminal offence for the CRA to knowingly accept income tax payments from a sex worker.
I have submitted a formal request for a Technical Interpretation, reference number 2015-056653, with detailed arguments regarding this matter. In response, the CRA has chosen to simply ignore the Criminal Code of Canada (CCC). Their response stated in part "Since the Income Tax Rulings Directorate provides interpretations with respect to provisions of the Act, we cannot comment on your interpretation of the Criminal Code"
Bill C-36 has no effect on the need to submit annual tax returns or the need to eventually pay your income taxes. The question of whether or not payments that are due can be collected after Bill C-36 is struck down or amended will need to be decided in the future.
Sex workers who want to withhold a portion of their tax payments need to inform the CRA that their money and other assets are derived in some part from violations of the Criminal Code of Canada section 286.1(1) (sex work) and that the CRA has intimidated or coerced them by describing and threatening to employ its collection methods against them if they fail to pay at the end of an unsuccessful objection process.
The Harper Government has refused to provide any definition of "sexual services" or sex work. Harper is leaving that for the courts to deal with after the 2015 election. I have asked the CRA to provide the definition of "sexual services" that the CRA will use for interpreting the Criminal Code. This request for definitions has been ignored just as the CCC itself is being ignored. As a result it is up to each individual tax payer to decide for themselves whether or not the services they provide are "sexual services"as referred to by the Criminal Code of Canada, section 286.2 (1), Material Benefit from Sexual Services.
While it may be possible to withhold tax payments due to the language of Bill C-36, it is still necessary that everyone submit their tax returns. This is a serious legal requirement that is unaffected by Bill C-36 and the Criminal Code.
In addition, it is likely that tax payments can only be delayed rather than avoided. In order to avoid interest and penalties should you eventually need to pay the taxes that you withhold, it may be best to withhold only a portion of the tax payable, say $100. The political effect will be the same. It may be tempting to withhold more in hopes that the money will never be collected but that would be risky.
An impartial review by the courts may determine that the CRA can lawfully accept tax payments from sex workers. We hope and expect the laws created by Bill C-36 will eventually be repealed, amended or struck down with the unfortunate result that the CRA can again accept tax payments from sex workers. In any case it is likely that taxes assessed will eventually need to be paid. They may need to be paid with interest or penalties added. As a result, anyone who chooses to withhold tax payments will need to keep money aside for paying those taxes. If you withhold only a token amount then any interest or penalties should be insignificant.
If you want to withhold a portion of your income tax payments because of Bill C-36 then this is what you need to do.
Generally, your tax return for 2014 has to be filed on or before April 30, 2015. If you or your spouse or common-law partner carried on a business in 2014 (other than a business whose expenditures are primarily in connection with a tax shelter), your return for 2014 has to be filed on or before June 15, 2015. File your income tax return by (or as soon as possible after) the required filing date but don't include any payment associated with income from providing sexual services. Instead of making a payment for income from sexual services, send the following message with your tax return.
*******************************************************
A portion of my assets are obtained by or derived directly or indirectly from the commission of an offence under subsection 286.1(1) of the Criminal Code of Canada, Material Benefit from Sexual Services. It follows that I would be committing a criminal offence if I pay such money to the Canada Revenue Agency while the Canada Revenue Agency is threatening action against me for any failure to pay. As a result, I intend to withhold a portion of my tax payment. Please refer to the Request for Technical Interpretation reference number 2015-056653 for a detailed legal argument.
*******************************************************
If the CRA responds with a notice of assessment related to your income from providing sexual services, it will then be necessary that you pay the portion you wish to pay and file an objection regarding the portion you do not wish to pay. This is the first step in the formal process of resolving a dispute. An explanation of this process is at
http://www.cra-arc.gc.ca/gncy/cmplntsdspts/ncmtx-eng.html
The time limit for filing an objection is as follows:
If you are an individual, the time limit for filing an objection is whichever of the following two dates is later:
- one year after the date of the return’s filing deadline; or
- 90 days after the day the CRA sends the notice of assessment.
In every other case you have to file an objection within 90 days of the day the CRA sends the notice of assessment.
If you decide to withhold a portion of your tax payment and file an objection with the Canada Revenue Agency or if you have any questions or comments about this response to Bill C-36 please contact the Canadian Adult Entertainment Council, info@caec.ca . If you wish I will send you ongoing information regarding this challenge against the Harper Government and Bill C-36. If enough people choose to file an objection it may be possible to work together on legal advice and an appeal to the courts. We can also work together to secure an amnesty for late filing of returns, an exemption from any interest or penalties and an explicit assurance that there will be no reprisals against those who withhold payments while the objection is being considered.
The legal argument in detail is as follows.
From the CRA web site at http://www.cra-arc.gc.ca/E/pub/tg/rc4417/rc4417-13e.htmgardl with some editing:
****************************************************
If You Do Not Pay Your Taxes
Depending on the particulars of your case, the CRA may use one or more tools such as those listed below to recover the money you owe:
Certifying Your Debt in the Federal Court of Canada
The CRA can legally register your debt with the Federal Court of Canada and get a certificate confirming the amounts you owe to the Crown. Once registered, the certificate has the same force and effect as a judgment obtained in a court and makes your debt a matter of public record.
Seizing and Selling Your Assets
The CRA can get a writ or memorial and seize your assets and property such as your car, boat, art, cottage, rental property, or personal residence and have it advertised and sold by a court enforcement officer. If we do this, you will have to pay all reasonable costs and any other charges we incur, as well as any balance that remains after the proceeds of the sale have been applied.
Holding another party jointly responsible for your debt
The CRA may hold a third party jointly responsible for your tax debt. The third party could be your spouse, a business partner, or a related corporation. For example, if a corporation has not remitted its GST/HST debts or source deductions, the CRA can hold the directors of that corporation jointly responsible for the corporation's debt.
******************************************************
The important point here is that tax payers are being intimidated by the threat to seize their property. Implicit in this threat is the threat to use any force or violence necessary to seize property. The CRA is threatening tax payers so that they will comply with any request to pay.
Tempering these worst case threats, taxpayers are protected by the CRA's Taxpayer Bill of Rights. From the CRA website at http://www.cra-arc.gc.ca/E/pub/tg/rc4417/rc4417-13e.html with some editing:
*******************************************************
Taxpayer Bill of Rights
- You have the right to privacy and confidentiality.
- You have the right to a formal review and a subsequent appeal.
- You have the right to be treated professionally, courteously, and fairly.
- You have the right to complete, accurate, clear, and timely information.
- You have the right, unless otherwise provided by law, not to pay income tax amounts in dispute before you have had an impartial review.
- You have the right to relief from penalties and interest under tax legislation because of extraordinary circumstances.
- You have the right to expect us to warn you about questionable tax schemes in a timely manner.
*******************************************************
Of particular interest here is the right "not to pay income tax amounts in dispute before you have had an impartial review". Disputing the legality of a sex worker paying taxes under Bill C-36 should prevent the CRA from attempting to collect those taxes. This should continue as long as the sex worker refuses to pay and follows any appeal process available until the matter is considered by a court outside the CRA where the matter would be subject to "an impartial review".
Having established that tax paying sex workers are the subject of intimidation by the CRA and that they have certain rights under the Taxpayer Bill of Rights, we come to the language of Bill C-36, the Criminal Code of Canada, and the detailed legal argument.
********************************************************
Commodification of Sexual Activity, Obtaining Sexual Services for Consideration
286.1 (1) Everyone who, in any place, obtains for consideration, or
communicates with anyone for the purpose of obtaining for
consideration, the sexual services of a person is guilty of
(a) an indictable offence ...
or
(b) an offence punishable on summary conviction...
********************************************************
This is the crime that gets the legal challenge started, a client paying a sex worker for services.
****************************************************
Material Benefit from Sexual Services
286.2 (1) Everyone who receives a financial or other material
benefit, knowing that it is obtained by or derived directly or
indirectly from the commission of an offence under subsection
286.1(1), is guilty of an indictable offence and liable to
imprisonment for a term of not more than 10 years.
******************************************************
This section of the Criminal Code seems to state that any person or agency, including the CRA or the Receiver General of Canada, commits a criminal offence if they or it knowingly receives money or other assets from a sex worker.
****************************************************
Exception
(4) Subject to subsection (5), subsections (1) and (2) do not apply
to a person who receives the benefit
(b) as a result of a legal or moral obligation of the person
from whose sexual services the benefit is derived;
No Exception
(5) Subsection (4) does not apply to a person who commits an
offence under subsection (1) or (2) if that person
(a) used, threatened to use or attempted to use violence,
intimidation or coercion in relation to the person from
whose sexual services the benefit is derived;
******************************************************
The Exception allows a tax accountant, lawyer or family member to accept money from a sex worker without committing a criminal offence. However, the "Exception" does not apply to the CRA or the Receiver General of Canada because the CRA has used intimidation or coercion and has threatened to use violence against sex workers to encourage their payment of taxes. This invokes the "No Exception" subsection. As a result, it remains a criminal offence for the CRA to knowingly accept money from a sex worker.
******************************************************
Parties to Offences
21. (1) Every one is a party to an offence who
(a) actually commits it;
(b) does or omits to do anything for the purpose of aiding any person to commit it; or
(c) abets any person in committing it.
******************************************************
If the CRA knows that a tax payment is from a sex worker then the CRA commits a criminal offence by receiving the payment. In accordance with the CCC, Parties to Offences, 21. (1)(b), the sex worker making the payment is a party to the CRA's criminal offence because they aided the offence. Being a party to a criminal offence is itself a criminal offence. If the CRA commits a criminal offence by receiving the money then a sex worker also commits a criminal offence by paying the money.
The obligation to avoid committing a criminal offence is a criminal matter and takes precedence over any civil obligation to pay the CRA. It follows that sex workers have a right to refuse to make tax payments to the CRA because making such payments would be a criminal offence.
******************************************************
Immunity — Aiding, Abetting, etc.
(2) No person shall be prosecuted for aiding, abetting, conspiring
or attempting to commit an offence under any of sections 286.1 to
286.4 or being an accessory after the fact or counselling a person to
be a party to such an offence, if the offence relates to the offering
or provision of their own sexual services.
********************************************************
This states that sex workers will not be prosecuted for the criminal offence of aiding the CRA in its criminal offence. This immunity from prosecution does not change the prior fact that the sex worker has committed a criminal offence by aiding the CRA in its commission of a criminal offence. Sex workers can voluntarily pay their taxes without being prosecuted but they are still committing a criminal offence when they pay their taxes to an informed CRA. As a result sex workers cannot be required to pay those taxes. In addition, anyone who successfully encourages a sex worker to pay their taxes and anyone who successfully encourages the CRA to accept a sex worker's tax payment where the CRA knows the payment is from a sex worker is committing a criminal offence by abetting the commission of a criminal offence.
If you have questions or comments please send a message to the Canadian Adult Entertainment Council, info@caec.ca or post them here on the forum.
When the Harper Government passed Bill C-36, it may have made it a criminal offence for the Canada Revenue Agency (CRA) to knowingly accept tax payments from sex workers. This allows sex workers to withhold a portion of their income tax payment and file an objection with the CRA. This could be a major embarrassment for Harper in an election year. It could cost him votes. It could cost him the election.
Have you declared enough income to the CRA over the past ten years?
Are you paid up and in good standing with the CRA?
Are you willing to file with the CRA as a sex worker?
Are you willing to deal with some CRA paperwork?
If so, you can withhold any portion of your tax payment related to sex work (payment for sexual services) and file a formal "Objection" regarding the withheld payment. While your objection is being considered the CRA will suspend collection actions.
The standard disclaimers apply. I have no legal qualifications. I am presenting personal opinions rather than recognized facts.
The legal argument in brief is as follows.
Bill C-36, the so called "Protection of Communities and Exploited Persons Act", makes it a criminal offence for any person or agency to knowingly accept a payment from a sex worker if any sort of threat is used to encourage that payment.
The Canada Revenue Agency (CRA) uses threats to encourage payment of taxes. As a result, it is a criminal offence for the CRA to knowingly accept income tax payments from a sex worker.
I have submitted a formal request for a Technical Interpretation, reference number 2015-056653, with detailed arguments regarding this matter. In response, the CRA has chosen to simply ignore the Criminal Code of Canada (CCC). Their response stated in part "Since the Income Tax Rulings Directorate provides interpretations with respect to provisions of the Act, we cannot comment on your interpretation of the Criminal Code"
Bill C-36 has no effect on the need to submit annual tax returns or the need to eventually pay your income taxes. The question of whether or not payments that are due can be collected after Bill C-36 is struck down or amended will need to be decided in the future.
Sex workers who want to withhold a portion of their tax payments need to inform the CRA that their money and other assets are derived in some part from violations of the Criminal Code of Canada section 286.1(1) (sex work) and that the CRA has intimidated or coerced them by describing and threatening to employ its collection methods against them if they fail to pay at the end of an unsuccessful objection process.
The Harper Government has refused to provide any definition of "sexual services" or sex work. Harper is leaving that for the courts to deal with after the 2015 election. I have asked the CRA to provide the definition of "sexual services" that the CRA will use for interpreting the Criminal Code. This request for definitions has been ignored just as the CCC itself is being ignored. As a result it is up to each individual tax payer to decide for themselves whether or not the services they provide are "sexual services"as referred to by the Criminal Code of Canada, section 286.2 (1), Material Benefit from Sexual Services.
While it may be possible to withhold tax payments due to the language of Bill C-36, it is still necessary that everyone submit their tax returns. This is a serious legal requirement that is unaffected by Bill C-36 and the Criminal Code.
In addition, it is likely that tax payments can only be delayed rather than avoided. In order to avoid interest and penalties should you eventually need to pay the taxes that you withhold, it may be best to withhold only a portion of the tax payable, say $100. The political effect will be the same. It may be tempting to withhold more in hopes that the money will never be collected but that would be risky.
An impartial review by the courts may determine that the CRA can lawfully accept tax payments from sex workers. We hope and expect the laws created by Bill C-36 will eventually be repealed, amended or struck down with the unfortunate result that the CRA can again accept tax payments from sex workers. In any case it is likely that taxes assessed will eventually need to be paid. They may need to be paid with interest or penalties added. As a result, anyone who chooses to withhold tax payments will need to keep money aside for paying those taxes. If you withhold only a token amount then any interest or penalties should be insignificant.
If you want to withhold a portion of your income tax payments because of Bill C-36 then this is what you need to do.
Generally, your tax return for 2014 has to be filed on or before April 30, 2015. If you or your spouse or common-law partner carried on a business in 2014 (other than a business whose expenditures are primarily in connection with a tax shelter), your return for 2014 has to be filed on or before June 15, 2015. File your income tax return by (or as soon as possible after) the required filing date but don't include any payment associated with income from providing sexual services. Instead of making a payment for income from sexual services, send the following message with your tax return.
*******************************************************
A portion of my assets are obtained by or derived directly or indirectly from the commission of an offence under subsection 286.1(1) of the Criminal Code of Canada, Material Benefit from Sexual Services. It follows that I would be committing a criminal offence if I pay such money to the Canada Revenue Agency while the Canada Revenue Agency is threatening action against me for any failure to pay. As a result, I intend to withhold a portion of my tax payment. Please refer to the Request for Technical Interpretation reference number 2015-056653 for a detailed legal argument.
*******************************************************
If the CRA responds with a notice of assessment related to your income from providing sexual services, it will then be necessary that you pay the portion you wish to pay and file an objection regarding the portion you do not wish to pay. This is the first step in the formal process of resolving a dispute. An explanation of this process is at
http://www.cra-arc.gc.ca/gncy/cmplntsdspts/ncmtx-eng.html
The time limit for filing an objection is as follows:
If you are an individual, the time limit for filing an objection is whichever of the following two dates is later:
- one year after the date of the return’s filing deadline; or
- 90 days after the day the CRA sends the notice of assessment.
In every other case you have to file an objection within 90 days of the day the CRA sends the notice of assessment.
If you decide to withhold a portion of your tax payment and file an objection with the Canada Revenue Agency or if you have any questions or comments about this response to Bill C-36 please contact the Canadian Adult Entertainment Council, info@caec.ca . If you wish I will send you ongoing information regarding this challenge against the Harper Government and Bill C-36. If enough people choose to file an objection it may be possible to work together on legal advice and an appeal to the courts. We can also work together to secure an amnesty for late filing of returns, an exemption from any interest or penalties and an explicit assurance that there will be no reprisals against those who withhold payments while the objection is being considered.
The legal argument in detail is as follows.
From the CRA web site at http://www.cra-arc.gc.ca/E/pub/tg/rc4417/rc4417-13e.htmgardl with some editing:
****************************************************
If You Do Not Pay Your Taxes
Depending on the particulars of your case, the CRA may use one or more tools such as those listed below to recover the money you owe:
Certifying Your Debt in the Federal Court of Canada
The CRA can legally register your debt with the Federal Court of Canada and get a certificate confirming the amounts you owe to the Crown. Once registered, the certificate has the same force and effect as a judgment obtained in a court and makes your debt a matter of public record.
Seizing and Selling Your Assets
The CRA can get a writ or memorial and seize your assets and property such as your car, boat, art, cottage, rental property, or personal residence and have it advertised and sold by a court enforcement officer. If we do this, you will have to pay all reasonable costs and any other charges we incur, as well as any balance that remains after the proceeds of the sale have been applied.
Holding another party jointly responsible for your debt
The CRA may hold a third party jointly responsible for your tax debt. The third party could be your spouse, a business partner, or a related corporation. For example, if a corporation has not remitted its GST/HST debts or source deductions, the CRA can hold the directors of that corporation jointly responsible for the corporation's debt.
******************************************************
The important point here is that tax payers are being intimidated by the threat to seize their property. Implicit in this threat is the threat to use any force or violence necessary to seize property. The CRA is threatening tax payers so that they will comply with any request to pay.
Tempering these worst case threats, taxpayers are protected by the CRA's Taxpayer Bill of Rights. From the CRA website at http://www.cra-arc.gc.ca/E/pub/tg/rc4417/rc4417-13e.html with some editing:
*******************************************************
Taxpayer Bill of Rights
- You have the right to privacy and confidentiality.
- You have the right to a formal review and a subsequent appeal.
- You have the right to be treated professionally, courteously, and fairly.
- You have the right to complete, accurate, clear, and timely information.
- You have the right, unless otherwise provided by law, not to pay income tax amounts in dispute before you have had an impartial review.
- You have the right to relief from penalties and interest under tax legislation because of extraordinary circumstances.
- You have the right to expect us to warn you about questionable tax schemes in a timely manner.
*******************************************************
Of particular interest here is the right "not to pay income tax amounts in dispute before you have had an impartial review". Disputing the legality of a sex worker paying taxes under Bill C-36 should prevent the CRA from attempting to collect those taxes. This should continue as long as the sex worker refuses to pay and follows any appeal process available until the matter is considered by a court outside the CRA where the matter would be subject to "an impartial review".
Having established that tax paying sex workers are the subject of intimidation by the CRA and that they have certain rights under the Taxpayer Bill of Rights, we come to the language of Bill C-36, the Criminal Code of Canada, and the detailed legal argument.
********************************************************
Commodification of Sexual Activity, Obtaining Sexual Services for Consideration
286.1 (1) Everyone who, in any place, obtains for consideration, or
communicates with anyone for the purpose of obtaining for
consideration, the sexual services of a person is guilty of
(a) an indictable offence ...
or
(b) an offence punishable on summary conviction...
********************************************************
This is the crime that gets the legal challenge started, a client paying a sex worker for services.
****************************************************
Material Benefit from Sexual Services
286.2 (1) Everyone who receives a financial or other material
benefit, knowing that it is obtained by or derived directly or
indirectly from the commission of an offence under subsection
286.1(1), is guilty of an indictable offence and liable to
imprisonment for a term of not more than 10 years.
******************************************************
This section of the Criminal Code seems to state that any person or agency, including the CRA or the Receiver General of Canada, commits a criminal offence if they or it knowingly receives money or other assets from a sex worker.
****************************************************
Exception
(4) Subject to subsection (5), subsections (1) and (2) do not apply
to a person who receives the benefit
(b) as a result of a legal or moral obligation of the person
from whose sexual services the benefit is derived;
No Exception
(5) Subsection (4) does not apply to a person who commits an
offence under subsection (1) or (2) if that person
(a) used, threatened to use or attempted to use violence,
intimidation or coercion in relation to the person from
whose sexual services the benefit is derived;
******************************************************
The Exception allows a tax accountant, lawyer or family member to accept money from a sex worker without committing a criminal offence. However, the "Exception" does not apply to the CRA or the Receiver General of Canada because the CRA has used intimidation or coercion and has threatened to use violence against sex workers to encourage their payment of taxes. This invokes the "No Exception" subsection. As a result, it remains a criminal offence for the CRA to knowingly accept money from a sex worker.
******************************************************
Parties to Offences
21. (1) Every one is a party to an offence who
(a) actually commits it;
(b) does or omits to do anything for the purpose of aiding any person to commit it; or
(c) abets any person in committing it.
******************************************************
If the CRA knows that a tax payment is from a sex worker then the CRA commits a criminal offence by receiving the payment. In accordance with the CCC, Parties to Offences, 21. (1)(b), the sex worker making the payment is a party to the CRA's criminal offence because they aided the offence. Being a party to a criminal offence is itself a criminal offence. If the CRA commits a criminal offence by receiving the money then a sex worker also commits a criminal offence by paying the money.
The obligation to avoid committing a criminal offence is a criminal matter and takes precedence over any civil obligation to pay the CRA. It follows that sex workers have a right to refuse to make tax payments to the CRA because making such payments would be a criminal offence.
******************************************************
Immunity — Aiding, Abetting, etc.
(2) No person shall be prosecuted for aiding, abetting, conspiring
or attempting to commit an offence under any of sections 286.1 to
286.4 or being an accessory after the fact or counselling a person to
be a party to such an offence, if the offence relates to the offering
or provision of their own sexual services.
********************************************************
This states that sex workers will not be prosecuted for the criminal offence of aiding the CRA in its criminal offence. This immunity from prosecution does not change the prior fact that the sex worker has committed a criminal offence by aiding the CRA in its commission of a criminal offence. Sex workers can voluntarily pay their taxes without being prosecuted but they are still committing a criminal offence when they pay their taxes to an informed CRA. As a result sex workers cannot be required to pay those taxes. In addition, anyone who successfully encourages a sex worker to pay their taxes and anyone who successfully encourages the CRA to accept a sex worker's tax payment where the CRA knows the payment is from a sex worker is committing a criminal offence by abetting the commission of a criminal offence.
If you have questions or comments please send a message to the Canadian Adult Entertainment Council, info@caec.ca or post them here on the forum.
