Canada Revenue Agency Sends Santa A Letter re: His Tax Return

Canada Revenue Agency - Agence revenue du Canada

proudly serving Canadians whether they want us to or not!
Canadiens servants fièrement à s'ils nous veulent ou pas!

December 14, 2011

Mr. S Claus

Santa Claus Enterprises

1 Icy Road Way

North Pole

H0H 0H0

                                                         RE: PERSONAL INCOME TAX RETURNS

Dear Sir:

We are in receipt of the individual tax returns for each of the past 142 years and appreciate your prompt attention to this matter. We understand that filing a tax return for the first time can be quite daunting and we applaud your efforts but would, however, offer the following observations.

While all of us within the office appreciated your elaborate penmanship and the cute Christmas cards on which you filled out your tax information, CRA requires that all tax returns be submitted on an approved Government of Canada T1 tax return form. This form is available in PDF format and can be downloaded from: www.canadarevenueagency.gc.ca.yourass.is.grass.

We have noted that you are filing a joint return with Mrs. Claus in order to avail yourself of new income splitting opportunities. Please note this will require that your tax return also include all income earned by Mrs. Claus from her bake sales, various knitting seminars and her recent stint as a pole dancer in Whitehorse.

Accordingly, we are not processing your returns until we are in receipt of the properly completed tax forms. Nonetheless, a quick scan of a selected number of your Christmas card returns has been quite revealing and in order to facilitate matters, we wish to advise you of the following to note when refilling your return on the correct forms.

Because your income comes from self-employment, you must include with your T1 return a T4A income slip showing the gross income earned from all sources. This includes fees for pictures taken with children, public appearances in various parades and an estimated value of the milk and cookies you receive in your travels. For purposes of taxation, these are classified in the same manner as gratuities. It should also include the estimated value of carrots, apples and other sundry food products left for your reindeer by children eagerly awaiting your arrival on Christmas Eve. These are classified as donations and not being a registered charitable entity, you must declare them as income.

In terms of expenses, we note the following based on our quick scan of your filing.

First and foremost, you must submit receipts for any and all expenses. The "best guess" approach that you used is not considered appropriate for taxation purposes.

1.       Your deduction for travel expenses is ineligible. Your travel is for business purposes and we are led to understand that you are fully reimbursed by S. Claus Enterprises for any, and all, out of pocket expenses you personally incur.

2.       The Christmas lingerie you purchased for Mrs. Claus is not an allowable business expense although it might be on her returns if she requires said lingerie for her pole dancing business. (It should also be noted for future returns it is not necessary to send pictures of Mrs. Claus modeling her lingerie with your return although we were amazed at both the dexterity and flexibility of someone her age).

3.       Your claim for an Agricultural exemption will be rejected on the basis that the North Pole is not a working farm and your reindeer are considered either pets or business resources.  Furthermore you show no income from agriculture against which eligible expenses could be deducted.

4.       Your claim for child care expenses will not be approved. Elves are not considered children and in the opinion of the legal department of the CRA, there is some question as to whether or not they are even human. Certainly they are undocumented aliens and this matter should be addressed with Immigration Canada at your earliest convenience.

5.       Your tax credit application for investment losses incurred when you sent money to Nigeria to help someone reclaim and cash their $50 million dollar inheritance, while unfortunate, is not considered a legitimate loss under the tax code.  While it is not the policy of CRA to make investment recommendations, it is strongly suggested you change the spam filters on your email client to avoid further investment losses of this type.

6.       Your deductions for medical claims for treatment of a severe cold and flu have been reduced to the allowable maximum with the caveat that they will not be approved in the coming tax year unless you either consider moving Christmas from winter to summer when you will be less likely to catch a cold or in the alternative exchange your open-air sleigh for a more appropriate vehicle with enclosed passenger cabin and working heater, \We think a mid-size Range Rover might be more appropriate.

7.       Likewise, CRA will not accept the allowable clergy residence deduction despite the claim that you are descended from Saint Nicholas.

8.       Please note that the deduction for moving expenses does not include "zipping around the world in a single evening", as you so colourfully put it. While we appreciate that this is, in and of itself, a remarkable amount of movement, it does not qualify as "moving" under the definition within the tax act. In anticipation of your question, Mrs. Claus' more than  impressive moves during her stage show also do not qualify as moving expenses as defined by the legislation.

Please note that your cheque was returned to us NSF and we take that very seriously

We are aware that filling out a tax return for the first time can be a daunting task and is no doubt complicated by the requirement to fill out individual returns for the past 142 years. At Canada Revenue Agency we are only here to serve and assist our clients to the best of our ability and would like to offer you the simplified tax form to help facilitate this matter.

____________________________________________________

CANADA REVENUE AGENCY

AGENCE REVENU DU CANADA

Simplified Tax Return: CRA Form T1A-2049

Line 1:

How much money did you earn for
the period of reporting? _________________

Line 2:

Send it to us. We will determine how much, if any, should be returned to you.

____________________________________________________

We hope this simplified form will expedite and assist you in bringing this matter to a close.

On a personal note, I would like to thank you for the gifts you so kindly left under my tree this past Christmas. The new RX-1000 calculator is getting quite a workout this tax season and is certainly making my life much easier.  I also appreciated the copy of How  To Make Friends And Influence People you brought me although I haven't yet had the opportunity to read it. There have been just too many tax audits this year.

Should you have any questions regarding your tax returns or any other related matters, please do not hesitate to contact me at your convenience, We would like to clear this matter as quickly as possible and would remind you that there are serious penalties and interest charges on late and overdue payments, We are prepared to discuss payment arrangements should you be unable to make one lump-sum payment at the time of refiling.

Please govern yourself accordingly

Jacob E. Marley

Director – Audit Branch

Canada Revenue Agency

Government of Canada

9 Penny Pinching Street

Ottawa, On