Law Times

Law Times • January 9, 2017 Page 7 www.lawtimesnews.com Making the law fit you BY DORON GOLD I s there such a thing as a person having been born to be a lawyer? Instinctively, it makes sense that some people have an affinity for law from an early age. Certain students in Grade 4 are drawn to advocacy as they develop empathy, confi- dence and empowerment. Some children in middle school begin to understand political processes and take an interest in how laws are created and how they affect individuals in society. In high school, many students begin to step into themselves, joining debate teams and fighting for causes that animate their budding passions. In other words, an af- finity for law can be in one's bloodstream from early on. That being said, having an affinity for law and making a career of it are two quite different things. One may have a passion for helping the most vulnerable among us, for in- stance, attending law school to become a poverty lawyer, only to discover that such jobs are scarce and potentially in- sufficient in their remuneration for the purpose of paying off daunting levels of law school debt. So, the person intent upon fighting poverty instead becomes a banking law- yer on Bay Street because a hire-back was offered following articles, and after all, who turns down a Bay Street hire-back? In the same vein, what of the young lawyer who knew she wanted to do com- plex business law from an early age who discovers that, in many cases, such lawyers' workloads and time demands often leave little space for per- sonal lives, let alone having children? The idea of what it is to be a lawyer invariably clashes with the reality of the life itself. For some, the image and the reality are smooth and in sync. For many others, the re- ality of life in law tenuously re- sembles how they imagined it might be. This past year, I worked with an articling student who was struggling with the experience. They were working at a prominent, large firm, pulling all-nighters and feeling shunned by fellow students in the firm because that person didn't fit in. In the face of this, I asked them why they were working so hard, going above and beyond what was expected by the firm. Their answer was to get hired back. But when I later asked them whether they even wanted to work in this firm they em- phatically stated they did not. This student knew they were pro- foundly ill-suited to work at this firm and, yet, when a hire-back was eventually of- fered, they took it. Needless to say, they've been back since beginning work as a lawyer and, after all of that, they are trying to convince them- selves that it's OK to leave. This is by no means an un- usual or anomalous story. Person after person comes to therapy complaining that they're in the wrong law job, working with the wrong peo- ple, living in the wrong com- munity, working in the wrong legal environment or worse. And then there are those that struggle to find work at all, toiling at doc-review jobs, watching their law school col- leagues move forward with their careers, feeling as though life and ca- reer are passing them by. Finding one's place in the profession is no easy task, but for those who hit their unique groove, it's an interesting, poten- tially lucrative and personally fulfilling life. Sometimes, one must be lucky, getting just the right articling job straight out of law school that leads onward and upward. But it's been said that luck is the conver- gence of effort and opportunity. In other words, you have to be in the game, out there going after what you want. Notice I said what you want, not what peo- ple try to convince you you should want. If you want to be lucky, start by being you, unapologetically. It may make things more complicated for you initially, but in the long run, peo- ple who honour their passions and values and hold out for the work that suits them best are the happiest, healthiest and most fulfilled individuals I encounter. Those who do not often feel trapped, disempow- ered and helpless, and it is in this space that conditions such as depression and addiction creep in. So, who are you? Are you a big law per- son or an in-house type? What type of law interests and excites you? What type of workload suits you? What sort of work en- vironment appeals to you? Do you want to be a lawyer at all? For people who wonder if they're cut out to be a lawyer, what they may benefit from is an analysis of whether, instead, they're just in the wrong spot inside of the profession. They need not give up on law altogeth- er, but, alternatively, they can try to shift focus. And for those who come to the realiza- tion that law isn't for them, there's a whole world out there for smart, ambitious and thoughtful people. The key is being you. Who else would you want to be anyway? LT uDoron Gold is a registered social worker who's also a former practising lawyer. He works with lawyers and law students in his role as a staff clinician and presenter with the Member Assistance Program as well as with members of the general public in his private psychotherapy practice. He's available at dorongold.com. COMMENT Stop being ashamed of tax planning BY BRANDON SIEGAL O ver the last few years, there has been an uncomfortable rise in the trend I call tax shaming. That is the outrage on social media and from politicians attempting to cast any attempt to manage or reduce taxes as im- moral. Recent examples include Apple's CEO being called before the United States Congress to defend its tax strategy, and the suggestion in the recent American election by the media that the application of prior-year losses is a loophole. Other examples include the so-called Panama Pa- pers, in which leaked law firm files led to a public out- cry about possible unreported offshore income, and the perceived unfairness of secret deals being granted by the Canada Revenue Agency under the voluntary disclosure program, as well as when the shareholders of Silver Wheaton last year launched a class action law- suit against the company alleging fraudulent tax filings because of a disputed CRA reassessment. The winds of public opinion toward taxes are chang- ing and the Canadian government has been quick to take advantage, zealously issuing press releases to pro- vide real-time updates to promote the aggressive audit of those named in the Panama Papers. In litigation, allegations of sham — suggesting that taxpayers entered into improper transactions with an intent to deceive the government — are increasingly being added to government pleadings with little con- sideration as to the impact of such accusations on a tax- payer's reputation. Even if successfully defended in court, the tarnish on a company's image from the assertion of sham will remain. Similarly, the language used by the govern- ment when publicizing the 2016 budget is concern- ing. The government emphasized in the budget that it would provide the CRA with an additional $444.4 mil- lion over five years to "address tax evasion and aggres- sive avoidance." In discussing the expected returns from its in- creased investment, the government has been quick to conf late the concepts of legal tax avoidance and illegal tax evasion as being equally deplorable. This is in direct contrast to our laws, which have long allowed taxpayers to organize their affairs to re- duce taxation. The principle is named after the Duke of Westmin- ster, who famously won a 1936 House of Lords case. The duke had restructured his gardener's wages as a covenant to pay in order to make them tax deductible and the House of Lords endorsed his ingenuity. In Canada, the Duke of Westminster principle is alive and well. The Income Tax Act prohibits through the General Anti-Avoidance Rule only the most abusive tax avoid- ance — which is admittingly difficult to define and even harder to prove. Otherwise, the Supreme Court has continually affirmed the Duke principle, including in the recent decision, Jean Coutu Group (PJC) Inc. v. Canada. Some taxpayers are so afraid of being tax shamed for non-abusive planning that they are accepting either le- gally indefensible reassessments or voluntarily paying additional taxes. Starbucks famously paid 20 million pounds in U.K. taxes as a result of negative publicity. I have personally seen taxpayers walk away from, or settle at a discount, otherwise strong cases out of fear of the reputational damage that might arise from publicly engaging in a tax dispute. There is no basis in Canadian law for voluntary pay- ments of additional taxes. Taxes are calculated under the Income Tax Act with only limited taxpayer discre- tion mainly relating to the timing of deductions such as depreciation on capital assets or the application of prior losses. In fact, taxpayers may be denied the assistance from the competent authorities under Canada's various tax treaties for help to reduce double taxation that results from a taxpayer-initiated voluntary adjustment, as opposed to a post-audit government- initiated adjustment. This leads to an interesting question for lawyers. In the event that a government, or public opinion, pressures or "tax mails" a client into voluntarily paying more taxes, what is our role as advocates? Should we sit back and let clients willingly pay ad- ditional taxes to avoid potential reputational risks or should we advocate for them to respect the rule of law and defend their rights to manage their tax affairs? Perhaps the right approach is to fight by educating the public. The next time an accusation is made that an infa- mous president-elect improperly used a loophole by carrying forward losses, an explanation should be given about how unfair it is to tax to businesses based upon arbitrary calendar years. Startup costs can be substantial and markets are volatile, leading to possible losses between January and December of any given year. It has been a long-standing principal of fairness in almost every tax system to allow such losses to be ap- plied against other years' profits. That is not a loophole. And when it is suggested that the CRA's voluntary disclosure program unfairly lets people get off easy through secret deals, it should be explained that the only deal being offered is the waiver of penalties that are applicable only after the non-reporter is caught. Ev- ery dollar of newly reported tax must still be paid in full along with partial interest. These are taxes that likely would either never have been collected or would have been collected only after an expensive and time-consuming audit. The voluntary disclosure program has been an un- mitigated success. Despite operating on a shoestring budget, the pro- gram captured in fiscal 2014-2015 more than $1.3 bil- lion of previously unreported income. One thing is clear: In this day and age, while the duke may not be dead, he needs a better publicist. LT uBrandon Siegal is the founder of Siegal Tax Law, a boutique tax dispute resolution firm, and has experience with McCarthy Tétrault LLP and the Department of Jus- tice. He can be reached at brandon@siegallaw.com. u SPEAKER'S CORNER The Lawyer Therapist Doron Gold

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