Income Tax Returns, does anyone understand them?

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Q. Income Tax Returns, does anyone understand them? Income Tax Returns, does anyone understand them? http://www.taxtyranny.ca To calculate the accumulated income payment (AIP) that qualifies for a waiver of tax deductions, you need Canada Customs and Revenue Agency Form T-1171. You fill in the AIP and the RRSP deduction limit -- you get that from your previous year's notice of assessment -- and you subtract, from whichever of the two is the lesser, the lifetime limit minus the amounts you've used to reduce additional tax on AIPs from previous years, if applicable. Then you subtract the total of AIPs that you had your promoter transfer to your RRSP (or to your spouse's or common-law partner's RRSP) and take whichever is less: that figure or the one from line three above, and you've got it! Of course, you must also complete Form T-1172 ... This is merely one of the countless adventures in taxation facing hapless Canadians as they dealt with the annual tax-filing deadline, which is tomorrow. The CCRA helpfully puts its hundreds of forms online (www.ccra-adrc.gc.ca) so we can each go mad or die of apoplexy in the comfort of our own homes. On and on it goes -- deemed realizations, information return on foreign affiliates that are not controlled foreign affiliates, multi-employer pension plan trust rebate application, remittance form for labour-sponsored funds tax credits withheld on redeemed shares, specially equipped motor vehicle rebate application, statement of contributions paid to a custodian of a retirement compensation arrangement, determination of exemption of an Indian's employment income ... No wonder almost a third of income tax returns have errors. No wonder CCRA now has almost 50,000 people on staff. And no wonder only 43 per cent of Canadians calculate our own income taxes anymore -- down from 50 per cent just a year earlier. More and more of us trundle our papers off to a tax service or an accountant, paying $100, $300, sometimes much more, for the privilege of sending too much money to a free-spending government. (In Quebec, which requires a parallel provincial return, 62 per cent use a preparer.) Income tax should not be this complicated. But we're trapped in a mental arms race: As quickly as government closes one loophole, an army of tax professionals finds a new one. After decades of this, the Income Tax Act is almost 3,000 pages long. The total cost to our economy of "tax compliance" -- your time filling in the forms, the services of advocates on one side and civil servants on the other, the cost of appeal hearings -- is unknown, but no one can doubt it has climbed steadily. Last year alone, CCRA added 5,000 staff, mostly for enforcement. These tax professionals, on both sides, contribute nothing to our economy. Factory workers build things, pilots fly airplanes, journalists write stories. Tax pros merely squabble over existing wealth. It's the Finance Department that's responsible for this disgraceful swamp. Finance sets the rules, and CCRA carries them out. You'd think someone eager to become prime minister would be looking for ways to make taxpayers' lives easier, but Finance Minister Paul Martin seems quite content with this enormous make-work program for accountants. Last year, he denounced the Canadian Alliance's elegantly simple "flat tax" proposal as "untried and unfair." He prefers the current mountain of gobbledegook. The Income Tax Act is so vast because Canada uses it to micro-manage citizens' economic and social behaviour. Thousands of incentives and disincentives unrelated to the basic notion of funding government through taxation have been built into the tax code. From production of TV shows to residence in the Far North, each of these efforts to bribe us with our own money adds a form or two and a rule or 10 to the CCRA's list. And every dollar that escapes through a loophole, or is driven underground as this mess and the heavy-handed authority of the tax department stimulate tax avoidance, narrows the tax base, requiring higher taxes for those who don't claim these breaks and don't cheat.

A. - As complicated as the tax filing process has become, one would think that if we are not slaves, (meaning we don't have to anything we don't want to without reimbursement) there should be a provision in the act and a place on the forms for claim

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