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Curler swept up in tax controversy

BOB WEEKS

From Friday's Globe and Mail

Latest comment posted at 12:18 PM EDT 04/04/08

Ruling by Canada Revenue Agency may have implications for other amateur athletes ...Read the full article

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  1. ex banker from St. John's, Canada writes: My advice as a CRA audit survivor: take it to court. CRA is being too severe in not allowing travel expenses, training costs, equipment costs, coaching costs, etc to be deducted from income. In my business if I travel to meet a client, and I earn money from that client, I am certainly allowed to deduct from income travel expenses. I get to deduct from income my costs for training me and my staff, professional fees etc. A judge in tax court will resolve this issue quickly.

    My advice to Mr Middaugh: fire your accountant and get a lawyer, head to court. Judges in tax court tend to allow certain bits of common sense, like deducting your expenses from income, to be considered.

    By the way there are good CRA tax auditors (mine was one of them) and there are idiots in audit. Mr Middaugh apparently drew a short straw.
  2. Vote NDP in the next federal/ provincial election from Toronto, Canada writes: Instead of the CRA trying to audit or recouping money from back taxes from our athletes, the CRA should be funding our atheletes so they win more gold medals than fans can count
  3. Erik D. from Ottawa, Canada writes: The tide of Canadian dominance in curling will change, China funds their team, full time, lets them train in Canada, and the result, they nearly won the women's World championship after four years as a team ... in Canada, we try and nit pick tax our players to death. If this keeps up, I guess we can expect no Curling gold in 2010...
  4. Strongarmlouis Rules from Canada writes: Erik D., you may be right, but from what I've seen of curlers and the love of the game, Canadian curlers will always be there. It's sort of like farmers being tied to the land. Some will never leave.
  5. Erik D. from Ottawa, Canada writes: To Strongarmlouis Rules: Yes, they will always be there, but they won't dominate. Other countries, like China, Japan, are funding professional teams, they have gained great skill, but currently lack the sense of strategy most top Canadian teams have, but it is only a matter of time before they gain that, as they employ Canadian coaches...and in the mean time, we hamstring our teams with such nit picking practices, with seemingly arbritary decisions on professional status or not.
  6. JA M from Our Town, Canada writes: Great I'm a net loss for my curling career time for me to start decalring losses.
  7. Randal Oulton from Canada writes: More details on it here from 2005 (the Globe's not too far behind, LOL!)

    http://www.bdo.ca/about/media/news/taxman.cfm

    Apparently the $50,000 tax is owed on income around $300,000.
  8. steve allan from Canada writes: Screw him, let him pay his taxes like the rest of us. The guy thinks he can earn money and not pay taxes??? What is it with some of these athletes? Winning money in sporting competitions is considered earnings.

    His claim that he doesn't have $50,000 is a bit lame. If he can't come up with that sort of money then he should seriously consider a career change.
  9. Dave Pelley from Newfoundland, Canada writes: The rules are there for everyone and should be applied.

    Given the amount of travel required for these cash tournaments, Mr. Middaugh should have legitimate expenses to apply to his taxes.

    His status as an athelete does not place him above the law.

    If he had consulted an accountant he likely would not be in this mess
  10. Green Canada from Canada writes: income is income...to claim it's not is tax evasion. the whole thing about a second job as being proof of not making money is non-starter...its all relative. Tiger Woods also has a second job for Nike...does this prove he makes no money from golf. The article doesn't actually give anyone the real picture here so commenting on whether he owes taxes or not is a bit of a stretch.
  11. Shawn Petriw from Prince George, Canada writes: This is a business and tax issue, not a sports issue. It's a business like any other. Curlers would be wise to set up books, and show a loss, if that is the case, or use the expenses to offset revenue to pay less tax.

    The beautiful thing is there is no 'expectation of profit' as there was years ago, and so now curlers could claim that loss, year after year, on their T1 and offset the taxes they pay from their day jobs.

    Furthermore, I'm sure a home office is needed to run the curling business, so a portion of your rent or mortgage interest payment is tax deductable. And you probably need to hire your children to do work in your curling business - payroll expense is tax deductible, and the money in their hands is not taxed until it reaches $5,000 or so. Let the kids pay for their own school supplies, music lessons, hockey equipment, etc.

    And if you're a good curler, incorporate and have even more ways to split that income with dividends, bonuses, preferred shares, etc. etc.

    Don't fight the Tax Man, use his weapons against him.
  12. R. Carriere from Maritimes, Canada writes:

    Things have changed significantly in curling over the last several years. In the older days, you hoped to win a cash speil to pay for the beer and gas.

    Today there is a lot of money floating around.

    Although it is truly unfair to judge without total details, these ladies and fellas appear to be educated, and probably know that all income is taxable-there are no free rides. Most know the rules.

    Perhaps the Sponsor or Curling Canada could set up a situation of witholding and remitting a certain portion of winnings-even if it was 15% because there are expenses to match off against revenue.

    Possibly a threshold of $5,000 per event is established before witholding and remittance comes into play.

    Just a thought!
  13. Brian Todd from Canada writes: One must adhere to the requirements of Income Tax which generally are sufficiently clear. If one is supposed to pay Income Tax and does not then you are at your own peril.
  14. Greg Out West from Canada writes: I think the CHR is being way to HARD. But they could also be way HARDER, HARDER, HARDER, HARDER. It's time to SWEEP this under the rug..

    HARDER HARDER HARDER
  15. Ricky for a Centrist Canada from Canada writes:
    Pay your taxes.

    I do.
  16. GlynnMhor of Skywall from Canada writes: Middaugh has paid his taxes, but the CRA has decided to change the rules of taxation without notice, and has also decided to apply those new rules retroactively.

    It's a grotesque mockery of anything resembling fairness.

    Think next of the CRA deciding all lotto and casino winnings to be taxable, but not allowing any losses to be deductible, and applying that ruling to anyone who's ever won ten dollars or even a free ticket on the super seven over the last seven years.
  17. GlynnMhor of Skywall from Canada writes: Brian Todd from Canada writes: "... requirements of Income Tax which generally are sufficiently clear."

    Dream on. The income tax act is a nightmare of vagueness and contradiction that some believe is deliberately written that way to allow the CRA to charge anyone with anything at any time and not be challengable without extensive court and lawyer costs.

    "If one is supposed to pay Income Tax and does not then you are at your own peril."

    But if you're not supposed to pay tax, and then they come round and demand that you do so on years and years of so-called 'earnings', then the ones in peril ought by rights to be the CRA management.
  18. GlynnMhor of Skywall from Canada writes: R. Carriere from Maritimes, Canada writes:"... probably know that all income is taxable..."

    Which would be an error, since not all income is taxable.

    It's beginning to look like the government cut the GST and is trying to make up the revenue by abusing the taxpayers in other areas.
  19. Broken Record from Victoria, B.C., Canada writes: This will make another great story about how one of our athletes (if curlers can be considered so) overcame all the hurdles and roadblocks thrown at him by the Canadian System and went on to win gold, or at least silver or perhaps bronze. Sometimes I wonder why they bother.
  20. Compos Mentis from Toronto, Canada writes: If the CRA went after drug dealers, theives, prostitutes and con artists, with the same kind of zealousness that they have with Mr. Middaugh, they might be able to justify their actions. However, having seen how incompetent and lazy they truly are, this just proves once again that they would rather take on the little guy!
  21. kelly moss from Canada writes: based on very little knowledge - im guessin

    that the problem is the expenses - wayne probably cant claim them because the sponsors who paid them are ...

    if you add 300,000/4 players = 28,000 to other income of 40,000 then extra tax could easy be 15,000 x 3 years = $45,000 plus some interest..
    if he had paid the$20,000 acctg to rev can he would only 20 ,000 now

    but i might be wrong

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