Your client gets scammed by a referral. Are you responsible?

Your client gets scammed by a referral. Are you responsible?

Your client gets scammed by a referral. Are you responsible?

Wright and Pare are just one of dozens of families in the Windsor region, along with hundreds of people across Canada, who fell victim to Fiscal Arbitrators’ tax scheme – with many now facing possible asset seizure and bankruptcy.

The CRA has since charged Lawrence “Larry” Watts and Aurelius Carlton Branch of Fiscal Arbitrators with defrauding the Canadian government of more than $5,000. It also requested a search warrant on the Woodbridge office of DSC Lifestyle Services, alleging that the firm promoted Fiscal Arbitrators and took a 20 per cent commission from each client's tax refund.

What the CRA failed to do, and remains a bone of contention addressed in the documentary, was issue a warning to Canadians about the company and the scheme.

The documentary airing is timely for advisors, with the introduction of FACTA – a new U.S. tax law – coming into effect July 1, 2014. Canadian advisors with clients who are U.S. citizens may find themselves using referrals to third-party providers such as accountants, tax lawyers or U.S. certified advisors to deal with complex tax filings.
"Advisors can look at this as a wake-up call. It's why they need to find out whether their clients are U.S. citizens or not," says Toronto advisor, Matt Altro, CEO of MCA Cross Border Advisors. "I suggest advisors communicate directly with their clients ... so they can at least inform them of their obligations or refer them to someone who can."

"The tax filing is just the tip of the iceberg when it comes to what a U.S. citizen needs to know ... there are a series of income tax traps they (clients) can fall into if they are not informed."

How do you ensure your clients are referred to reputable and trustworthy third-party service providers? Tell WP in the comment box below.

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