The Citizen, 1988-05-11, Page 17THE CITIZEN, WEDNESDAY, MAY 11, 1988. PAGE 17.
Farmers face new crop of tax penalties
BY HAROLD SMITH, CA
Tax reform means a lot more
than just lower tax rates. The
government is eliminating many
deductions and expenses that you
may have claimed in the past and it
likely will be turning a sterner eye
toward infractions whether they ’ re
made by stock brokers or farmers.
Of special note is the fact that
many of the penalties in the income
tax law have been doubled. For
example, the penalty for tax
evasion when the government can
show fraudulent intent or gross
negligence in the preparation of
the income tax form has doubled
from 25 per cent of the tax liability
evadedto50percent. And, with
the general crackdown under tax
reform undoubtedly will come
more vigilance on the part of
Revenue Canada.
A number of new penalties also
have been introduced. For exam
ple. shortly there will be a penalty
for failing to report income result
ing in an understatement of tax
liability. A key feature of this
measure is that the taxpayer,
Tara Newell of RR 5, Wingham, a member of the Belgrave 4-H Club,
assists in planting trees at the farm of Ray Hanna at RR 2, Auburn, part
of her “Encounter the Outdoors” project work in recognition of
National Forest Week, May 1*7. The seedlings are part of the 150,000
trees planted by hand and the350,000 machine planted by the Ministry
of Natural Resources office at Wingham this spring. - Photo by Dorene
Cardiff.
Bennett heifer tops Friday market
Continued from page 16
$94 to$98 with sales to $103.25;
good heifers went for $89 to $94.
Seven heifers consigned by Wm.
Bennett & Sons Ltd. of RR 1,
Gorrie, averaging 1137 lbs., sold
for $103.25, and were purchased
by Star Brand Packers of Binbrook.
Their total offering of 16 heifers,
averaging 1081 lbs., sold for an
overall price of $99.64.
A heifer consigned by Harold
Wolfgram of RR 3, Stratford,
weighing 1070 lbs., sold for $99,
with his total lot of 19 heifers,
averaging 1148 lbs., selling for an
average price of $86.16. Four
heifers consigned by Murray
including corporations, does not
have to be shown guilty of
intentionally defrauding the
government. Firsttime “offen
ders” will receive a warning from
Revenue Canada. Repeat offen
ders , even those making a different
type of error that leads to the
misreporting of income, will be
“fined” 25 per cent of the tax
evaded.
Many penalties could be enforc
ed in a typical farm situation. For
instance, many farm families live
in a house owned by a farm
corporation. In such cases, the
farmer should be paying fair value
re nt to the corporation for use of the
house. In the past, Revenue
Canada has encountered cases in
which rent was not paid or in which
estimates of the rent which should
have been paid have been far below
fair market value.
In theory, both the farmer and
the corporation could be fined if the
farmer failed to pay fair value rent.
The farmer could be charged with a
taxable benefit to the extent that
the re nt is be low fair value. This
Smith of RR 2, Dublin, averaging
993 lbs., sold for an average price
of $92.45, with sales to $96.25.
Five heifers consigned by Gord
on Daer of RR 1, Auburn,
averaging 1018 lbs., sold for $93.83
with sales to $95. Four heifers
consigned by Neil Rintoul of RR 2,
Lucknow, averaging 1180 in
weight sold for an overall price of
$93.57 with sales to $94.25.
A heifer consigned by Earl
Bennewies of RR 1, Borholm,
weighing 1120 lbs., sold for $93.75.
Six heifers consigned by Ron
Gorden of RR 2, Blyth, averaging
960 lbs., sold for an overall price of
$89.42 with sales to $93.
would give rise to tax and penalty to
the farmer. In addition, the
company may be denied the
write-off of various house expens
es. In this case the corporation
would be taxed and penalized.
Also of note to farmers are the
dramatic changes to the rules for
claiming deductions on automo
biles used for business purposes.
Again, given the new climate of
toughening up on transgressors,
any claims on automobiles for farm
use should be reasonable and
Program provides jobs
In its 17th year, the Junior
Agriculturalist program is bridg
ing the rural-urban gap. This is
accomplished by offering students
between the ages of 15-24, with no
previous farm experience, an
opportunity to appreciate rural life
and gain farm experience. The
Junior Ag. lives and works with
his Host Family, 12 out of 14
days, for a period of nine weeks
starting June 20 and runs to
August 19.
Host families must run a full
time commercial operation, and
have an interest in supervising and
working with inexperienced youth,
helping them develop the skills
OCA supports Free Trade
The Ontario Cattlemen’s Asso
ciation supports the Canada-
United States Free Trade Agree
ment according to a press report
from the organization.
According to the organization,
during the last 10 years Canada has
achieved a significant penetration
into the United States market for
livestock and red meats.
Canada’s trade balance in cattle
and beefwith the United States has
been about four to one in Canada’s
favour. About 20 per cent of
Canadian pork production is ex
ported to the United States and
since 1982 exports of livestock,
meat, and by-products to that
market have gone up from $750
million to $1 billion annually.
Canada’s trade surplus has been
in the range of $500 to $800 million
annually.
The red meat industry has had
the next thing to free trade, in so far
as tariffs and quantitative restric
tions go, for many years, the
cattlemen’s association says.
More recently the use of non
tariff technical and inspection
standards have become a much
greater concern to export move
ment.
Hugh Sharpe, president of the
OCA is quoted as saying, “The
legaltextof the agreement con
tains a feature not in the prelimi
nary transcript which will place
greater pressure on our Canadian
government to act in unison with
the United States if that country
Choice cows sold at $61 to $64;
good cows brought $57 to $61; and
canners and cutters fetched $53 to
$57.
Thirty to40 lb. lambs traded to a
high of $144/cwt.; 40 to 50 lb.
lambs traded to a high of $142/
cwt.; 50 to 60 lb. lambs traded to a
high of $138/cwt.; 60 to 70 lb.
Iambs traded toahigh of $134/cwt.
and70to801b. lambs traded toa
high of $147/cwt.
Forty to50 lb. pigs traded to a
highof$1.00perlb.; 50to601b.
pigs traded to a high of 86 cents per
lb.; and 60 to 70 lb. pigs traded to a
high of 66 cents per lb.
backed up with good documenta
tion where possible.
These are just a few examples of
the types of changes in the air at
Revenue Canada today. If you are
making out your own tax return
nextyear, itdefinitely will be to
your benefit to have a professional
review it, since literally hundreds
of changes are being made to the
Income Tax Act and you want to be
sure to avoid any of the new
penalties.
needed on a farm. The student
receives a wage of $30 a day for
their services. In addition to room
and board the host family supplies
15 of the $30. The remaining $15 is
supplied by the Ministry of
Agriculture and Food.
This year there is still a demand
for host families and Junior
Agriculturalists in Huron County.
If you are interested in the program
contact: Angela Schlosser or Don
Rauser by phoning the Clinton
Ministry of Agriculture and Food,
at 482-3428 or 1-800-265-5170, or
writing P.O. Box 159, Clinton, Ont.
N0M 1L0.
seeks voluntary restraint on im
ports from third countries.”
In the past, aswasthecaseinlate
1987, our Canadian government
has virtually refused to act in
unison with the United States in
this respect. However, the most
important part of the agreement is
that dealing with technical and
inspection standards.
The agreement to work toward
equivalence in this area will be the
biggest factor in ensuring continu
ed market access, and this is
particularly critical when we see
what is developing in the EEC now.
All in all, the agreement is good for
our industry.
TWIN COUNTY
GRAIN ELEVATOR
FOR A FULL LINE OF...
Agricultural Chemicals
•all popular brands in stock
FARM SEEDS
•Seed Soybeans *Seed White Beans
•Small Seed Grains
Future Grain Contracting
TWIN COUNTY
GRAIN ELEVATOR
Phone 356-2292
R.R.3, Brussels
Heather Hopper
chosen to lead
4-H Horse Club
The first meeting of the Brussels
Horse and Pony Club took place at
Rob Shortreed’s home, RR 3,
Walton, on Thursday, April 21.
The members elected Heather
Hopper as president and Kelly
Workman as vice president. They
discussed the role of internal
organs in digestion of food, and
how to tell whether a horse is fat, fit
or skinny.
The next meeting will be
sometime this month. New mem
bers are still welcome. Contact
Elaine Workman at 887-6052.
Agri crew
formsnow
available
Areyou enthusiastic, ambitious,
and willing to learn? If you are,
then Agricrew is for you!
This unique summer experience
provides interested youth with
employment in the agricultural
sector while exposing them to a
variety of work settings, tasks,
peers, and farm families. Youth,
between the ages of 15 and 25 years
are eligible for the program.
The four member crews will be
available from approximately June
20 to August 19 to farmers fora fee
of $110 dollars for an 8 hour day.
If interested in applying to or
hiring Agricrew call the Clinton
Agricultural Office at 482-3428 or
1-800-265-5170 as soon as possi
ble. Applications are available at
the Agricultural Office in Clinton
as well as in area Secondary
Schools. Forward applications to
the Ontario Ministry of Agriculture
and Food, Box 159, Clinton,
Ontario. N0M 1L0.
*****
To remove the musty smell from
old books, trying putting scented
fabric softener sheets between a
few of the pages, and leave for a
few days.
Manager: GlenThorpe