From: AlanBaggett@volcanomail.com   
      
   Art from the Archive: Toni Onley versus Revenue Canada : CRA SOTW   
      
   June 10, 2015. 11:23 am    
   I'm on Twitter @KevinCGriffin   
      
   1983   
   Toni Onley knew how to get media attention.   
   He was known as the millionaire artist who drove a Rolls Royce and owned and   
   piloted several planes. He did not fit the conventional, romantic image of the   
   poor, struggling artist.   
      
   Onley was successful and let everyone know it. In 1983, he took on Revenue   
   Canada over a tax ruling he said would unfairly affect his income. He always   
   made it clear that he was out to get a ruling changed to benefit himself in   
   taking on the tax    
   department. But he pointed out that what he was doing could help other artists   
   across the country in similar positions.   
      
   Revenue Canada would only allow him to give away his art up to a value of 20   
   per cent of his income. Because Onley was so successful, he had already used   
   up his 20 per cent and didn't have any left over for other projects including   
   one to fund a hospital    
   he was building in India. The 20 per cent limit wouldn't apply if he donated   
   works to an institution such as the National Gallery but that was incredibly   
   time consuming and slow and required getting appraisals that could take months.   
      
   "I'm making myself a test case," he said in The Vancouver Sun in October. This   
   tax law was never intended for artists. There is no tax law that applies to   
   artists, so they lump them with manufacturers. This is ludicrous."   
      
   Rather than pay tax on his prints, he said he would burn 1,058 prints - about   
   half his stock of seascapes and landscapes. Each one had a retail value of   
   $400 to $1,500.   
      
   He was going to make the burning a public event by doing it on Wreck Beach two   
   days later in front of the media.   
      
   The story received media coverage across the country. Former Prime Minister   
   Joe Clark asked him not to burn his prints. So did Minister of Culture Francis   
   Fox. Even Prime Minister Trudeau was asked to intervene.   
      
   But once Onley got to Spanish Banks - not, as it turned out, Wreck Beach as he   
   earlier indicated - it was a bit of a letdown. There was no bonfire. Onley   
   told reporters and camera operators that he wasn't going to burn his prints.   
      
   That morning, he said on Jack Webster's Show in BCTV that he had changed his   
   mind. He believed that burning the prints would have no affect on his tax   
   status. Getting a second look by officials in Ottawa "was pretty well as much   
   as I can ask for, I would    
   think."   
      
   At the time, Revenue Canada was auditing him for 1980 and 1981. Also at issue   
   from Onley's point of view was whether artists could deduct expenses incurred   
   for the production of unsold work.   
      
   "(Revenue Canada wants) a complete inventory so they can attach a value to   
   that inventory," he said. "It would increase taxes considerably.   
      
   "They think I'm a selfish bastard who is trying to get rid of my prints to   
   escape taxes," he said. "I'm terribly upset at their insensitive response."   
      
   "I was not planning to do this for myself. It's for all the other artists who   
   will be hit by what Revenue Canada is doing."   
      
   For the next several years, as the story dragged on, Onley became the artist   
   The Vancouver Sun called whenever it needed someone to comment on a story   
   about artists and taxes.   
      
   A year later in 1984, Revenue Canada said the department had accepted the idea   
   that "artists and writes may need more time to turn a profit than ordinary   
   businesses." The department now believed that "continuous losses for many   
   years are not alone    
   sufficient to establish that there is no reasonable expectation of profit."   
   For Revenue Canada, a reasonable expectation of profit was a criterion for   
   determining what expenses could be deducted for tax purposes.   
      
   I'm on Twitter @KevinCGriffin   
      
   ----------------------------------------------------------   
   Miss a Tax Tale Miss a lot!   
   Visit the CRA SOTW Library at http://canada.revenue.agency.angelfire.com   
      
   ------------------------------------------------------------   
   Alan Baggett - http://www.taxcollectorsbible.com/ - Tax Collector's Bible   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)