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What our clients have said, and what happened to them.
1. My pay was not enough to live on. Now I pay no income tax, and can afford to live well. A.R.
Result: In 1988, this taxpayer came to the founder of Graycliff to reduce her income tax payable. He suggested that she become an leased employee through a corporation.
She approached her employer, who was willing to cooperate. He provided an amended employment contract that reflected the new arrangement. Thereafter, her employer paid her with no payroll deductions taken off her pay.
No income taxes were ever paid in respect of her earnings, and no audit was ever done. Although income tax authorities became aware of this arrangement many years later, no objection was ever made because all laws had been complied with.
This is an example of an executive becoming an leased employee and thereafter paying no income tax. And she has never paid any income tax since.
2. They have assessed my company for over $80,000.00, and, as officer and director, I am personally liable for it all. L.S.
Result: After all assets of the company were sold (pursuant to plans made before the tax problem arose), he transferred the remaining shell company to us, and we defended the tax assessment case and won. So no tax is owing, and none will be paid.
Personal liability for taxes would arise only if payment were requested within two years of a person ceasing to be an officer or director. This case lasted for over two years. So even if we had lost, he would no longer be personally liable. And we are not liable because we were not officers or directors at the time the relevant transactions occurred.
3. You have to help me! They are going to take my house away and put me in jail. C.D.
Result: They didn't touch his house. They didn't charge him with anything (or put him in jail, or fine him). And he didn't pay even one cent for taxes, penalties, or anything else. (Although, they did assess him for a considerable amount of money, which he never had to pay.)
4. I don't want this hanging over my head (after receiving an assessment for over $60,000 for which he was personally liable). D.M.
Result: We took over the company (which had no significant assets, and which was about to shut down anyway), filed an appeal in January 2002, for the tax assessment, and we have not yet been contacted about the appeal hearing date. The tax authorities were so intimidated by our reputation with them that they were afraid to set an appeal hearing. They knew that they would lose. Since personal liability for taxes would arise only if payment were requested within two years of a person ceasing to be an officer or director, and since this case has lasted for over two years, even if we were to lose, he would no longer be personally liable. And we are not liable either because we were not officers or directors at the time the relevant transactions occurred.