Please note that the Plan is not insurance but rather a limited retainer agreement between you and Sixth Sphere Services Professional Corporation. If you are reassessed by the CRA, the Plan does not pay any taxes, interest, or penalties owing by you. You remain solely liable for these amounts. By becoming a Member of the Plan, you have retained Sixth Sphere on a limited basis to advise, assist, and represent you in respect of an audit or reassessment of your 2008 Income Tax Return to the extent set out under the Plan’s Terms & Conditions for the particular Taxation Year. Merely because you have retained legal counsel does not mean that you don’t owe the additional amounts assessed by the CRA. In fact, the Income Tax Act deems the amounts assessed by the CRA to be immediately due, owing, and payable. Sixth Sphere will be able to assist you in reviewing the reassessment, determining if the CRA made any errors or erroneous assumptions, and, if appropriate, to assist you in objecting to and appealing the CRA’s reassessment.
If you are reassessed, it is generally in your best interest to pay the amounts assessed immediately and then to proceed to object to or appeal the reassessment. If you do not and your objection or appeal is not successful, interest will continue to accrue on the amounts reassessed by the CRA, resulting in you owing even more money to the CRA. Furthermore, such interest is not deductible for income tax purposes.
If you do pay the additional amounts assessed immediately and your objection or appeal is successful (in whole or in part), the CRA will pay interest to you on your excess payment.
As a 2008 Member of the Plan, if your 2008 Taxation Year is audited or reassessed, Sixth Sphere will work with you towards your desired outcome in accordance with the scope and limits of the Plan. However, the outcome of any income tax objection or appeal to the Tax Court of Canada is subject to many possible variables such as the demeanour and recollection of witnesses, the availability of substantiating documents and other evidence, and the evidence marshaled by the Canada Revenue Agency – all of which affects the decision of a CRA Appeals officer or a Tax Court of Canada judge. Accordingly, Sixth Sphere cannot guarantee that your desired result will in fact be achieved. For you and Sixth Sphere to work towards your desired outcome, it will be necessary for you to cooperate with Sixth Sphere and abide by the Terms & Conditions of the Plan.
The Hours of Legal Service provided to you as a 2008 Member of the Plan will be performed by lawyers, paralegals, law clerks, and other staff employed by Sixth Sphere. To the extent that work is performed by paralegals, law clerks, or other staff of Sixth Sphere, such work will be supervised by a Sixth Sphere lawyer. Sixth Sphere reserves its right to select the lawyers and staff who will provide and perform the Hours of Legal Service, including the right to contract work to other lawyers and law firms. While we will seek to accommodate any request you might have as to the Sixth Sphere lawyers and staff who may be assigned to assist you or, if Sixth Sphere chooses contract the work to other lawyers or another law firm, with respect to your preference of such counsel, the selection, choice, and assignment of lawyers and staff to your file remains exclusively within Sixth Sphere’s discretion.
The Hours of Legal Service provided to you as a Member of the Plan by Sixth Sphere have no monetary value and no specific notional dollar value.
If you choose to retain another lawyer or law firm on your own to assist you with respect to a tax audit or reassessment of your 2008 Taxation Year – even if the lawyer or law firm is a Plan-Preferred Law Firm – Sixth Sphere will not pay or reimburse you for your any legal fees that you might pay or owe to such lawyer or law firm nor does it have any obligation to do so.
The Hours of Legal Service also do not have any dollar value. The value you receive from the Hours of Legal Service provided to you by Sixth Sphere under the Plan very much depend upon the type of services performed. Like most law firms, Sixth Sphere’s lawyers, paralegals, law clerks, and other professional staff will keep track of the time spent working on your file. Any such time spent working on your file will be attributed to and drawn down against the Hours of Legal Service available to you under the Plan. Who performs the works will depend upon the sophistication of the work your file requires.
For example, assume you are notified by the CRA that your 2008 income tax return will be audited. One of the first steps you should take is to ensure that your receipts and other documents that support the amounts you reported in your return are properly organized and categorized. If you ask Sixth Sphere undertake that task for you as part of the Hours of Legal Service available to you under the Plan, Sixth Sphere will generally assign a paralegal to perform that work and the time taken by the paralegal to perform this task will be drawn down against the Hours of Legal Service available to you under the Plan. Conversely, if you undertake this work yourself or have your accountant or bookkeeper do it for you, the Hours of Legal Service from Sixth Sphere available under the Plan will remain available for more sophisticated legal work and advice. For example, typically at the end of an audit, the CRA auditor will issue a “proposal to assess” letter outlining the changes he or she proposes to make and the reasons why. A possible better use of hours of Legal Service available to you under the Plan would be to request that the letter be reviewed by Sixth Sphere to provide comments and suggestions as to how to refute the position of the auditor as outlined in the proposal to assess letter.
If you require additional legal services that are beyond the Hours of Legal Service provided to you under the Terms & Conditions of the Plan and you engage Sixth Sphere to provide those additional legal services to you, then Sixth Sphere’s fees will be based principally on the time spent by it on your behalf. Records of all time will be kept and accounts will then be prepared and sent to you periodically. Sixth Sphere’s fees for such additional legal services will be calculated on the basis of our normal hourly rates at the time the services are performed, but subject, of course, to the 20 per cent reduction that is available to you as a 2008 Member of the Plan if the additional legal services related to a tax audit or reassessment that relates to your 2008 taxation year or an audit or reassessment of a 2008 fiscal period of a corporation that you own and control.
Before we begin any additional legal services on your behalf, we may require a retainer to secure our fees for such additional legal services. The amount of the retainer will be determined by us at the time you request such additional legal services. The retainer will be placed in our trust account and will serve as a source of payment for all or part of our account or accounts when rendered for such additional legal services. You will be asked to replenish the retainer from time to time. Any unused portion of the retainer will be returned to you upon the completion or termination of our services in respect of any additional legal services.
Any accountant, financial planner, or other tax professional (including any Plan Participating Law Firm) is independent and separate from the Plan and is not an agent, servant, or partner of Sixth Sphere Services Professional Corporation. Sixth Sphere does not represent, warrant, or covenant in any way the quality or accuracy of any services or goods that they provide to you.
Lawyers and law firms that have agreed to participate in the Plan by becoming Plan Participating Lawyer or Law Firm are not required to pay any amount to Sixth Sphere to participate. Equally, any accountant, financial planner, or other tax professional that has agreed to participate by becoming a Participating Tax Professional is not required to pay any amount to Sixth Sphere to participate.
Sixth Sphere does pay a service fee to Participating Tax Professionals to compensate the Participating Tax Professional for the time they take and resources they use during the tax season to inform you and their other clients of the benefits, exclusions, and scope of the Plan, to complete the membership application process on your behalf and on behalf of their clients, and to provide assistance to Members of the Plan in obtaining legal services from Sixth Sphere under the Terms & Conditions of the Plan should a member request such assistance. The service fee paid by Sixth Sphere to Participating Tax Professionals for these services is an amount equal to 15 per cent of the aggregate memberships purchased by them during a particular tax season on behalf of their clients, with 2/3rd of the service fee being payable to the Participating Tax Professional following the end of the particular tax season, and the remaining 1/3rd being payable to the Participating Tax Professional three years following the end of the particular tax season provided the percentage of Plan Members whom the Participating Tax Professional assisted in becoming Members of the Plan for the particular Taxation Year who were audited within the three year period did not exceed the CRA’s target audit rate for small and medium-sized businesses for the particular Taxation Year.