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Wondering about reporting laws for banks and trusts companies in Canada. If someone were to recieve a payout from an offshore for 5 figures up does the bank report this transaction? What about recieving a check by fedex for over 5 figures? If customs opened it up and saw the about could they then charge duty or withold it? What about cashing the check ath the bank for this amount? Would the bank be obligated to withold tax or contact revenue Canada?
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Actually I heard on the radio today that a guy in BC is being audited because Revenue Canada wants him to pay taxes on $1.5 million he won betting. They stated that for him to win that much he must have been engaged in the businsess of betting which he denies.
As you know winfalls are tax free here.
I'll see if I can find a link. -
Taxman targets wealthy gambler
Made millions in legal sports betting
Fri, Nov 17, 2000
By Zev Singer
OTTAWA -- Brian Leblanc has done so well at sports wagering that the federal government wants to charge income tax on his winnings.
During the last few years, legal sports betting tickets have made Leblanc, 29, a multimillionaire.
Although such winnings are supposed to be tax-free, Leblanc has been so successful that the Canada Customs and Revenue Agency now considers betting to be his job.
The agency is attempting to re-assess Leblanc's taxes back to 1996 as well as those of his brother Terry, who does the same type of betting.
"We consider your gambling activities as a business activity and those revenues are taxable for income tax purposes," says a letter Leblanc received this week from the agency.
That's something he'd like to bet on.
In the office of his lawyer, Mark Siegel, Leblanc says he will fight this one all the way.
How can this be considered his job, he asks, when he spends 10 minutes a day making his picks on which hockey, football or basketball teams will beat which others?
"It takes virtually no time at all. I can do it just like that," says Leblanc snapping his fingers.
His system is all about finding the few really good bets -- situations where the odds offered seem to be out of sync with what they ought to be.
Last year, for example, he won $1.7 million when he noticed that the Atlantic Canada sports lottery was setting odds on NBA basketball based on outdated team rosters.
He won't say how much money he's made, but his largest single pay day was $7 million.
Revenue Canada has taxed the income of at least two other skilled gamblers -- a professional pool player and a horse racing bettor.
The pony player was using inside information, and the pool shark wagered on his own games -- big distinctions, says Siegel.
Leblanc has another thing going for him. Unlike other forms of gambling, income tax legislation specifies that lottery winnings are tax-exempt.
That point is acknowledged by Michel Proulx, a Revenue agency spokesman.
Proulx could not comment on actual cases. But in general, he said, "The Income Tax Act clearly states that lottery winnings are exempt."
Proulx also said that sports betting, unlike horse race handicapping, is like a lottery in the challenge it holds for the would-be professional.
Proulx also acknowledged the potential for another consequence should his agency successfully assess income tax charges on sports lottery winners -- the potential for those gamblers to write off their losses as business expenses when they are not successful.
-- Ottawa Citizen
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I don't see how Revenue Canada can win this one since it's written down that lottery winnings are not taxable.
I especially don't understand why they would even try. If they win their case the amount of money wagered in lotteries will probably drop since people will perceive correctly that they won't win as much if they win. There will be a movement towards gambling activities such as betting offshore that are nearly impossible for the government to trace. Also big losers will take advantage of the ruling to declare their losses against their taxable income. And we all know there are more losers than winners.Comment
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