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Unreported PayPal Business Income

 

Recent news alerted all Canadian online business owners that their PayPal Business Accounts will be handed over to the CRA. This will have serious tax consequences if they have Unreported PayPal Business Income. This news is a result of the Canada Revenue Agency (CRA) moving forward to aggressively address non-compliance specifically unreported income or underground economy.

This news sparked wide spread of panic and fear amongst previous calm and orderly online Canadian business community. The reasons are obvious:

The disclosed files could allow the CRA to identify people who have Unreported PayPal Business Income meaning that had business income from PayPal that were either never reported or under-reported. Further more,  for those online businesses with more than $30,000 in business revenue over 12 months, which means they should be registered to collect and remit the GST/HST.

This disclosure also may identify people or corporations who owe corporate or personal income taxes. If caught Unreported PayPal Business Income, they will have to pay the tax, plus penalties and interest. If the tax avoidance is deliberate, it could be considered tax evasion and result in a criminal charge.

 

Unreported PayPal Business Income 911

 

Unreported income with Unreported PayPal Business Income is regarded as tax evasion which can result in a range of civil or criminal penalties. Do not allow this mistake to become a crime that cannot be retracted, act now before CRA sends you a notice!

You need to quickly come to us before CRA initiates any action against you for Unreported PayPal Business Income.  As soon as CRA initiates the contact, then it is too late. It could be one letter in the mail, one phone call, one personal visit, etc.

The CRA can initiate criminal charges against individuals and businesses that are suspected to intentionally evade taxes for their Unreported PayPal Business Income. A conviction in such cases usually results in a fine of up to two hundred percent of the tax evaded or imprisonment of up to five years.

If you have done similar maneuver in your taxes with Unreported PayPal Business Income, then you need to seek independent and professional advice from reputable tax firm that specialized in tax crisis relief!

If you have Unreported PayPal Business Income, then you cannot afford to wait any longer! Do something to resolve your tax problems TODAY!

We have helped clients in reducing their tax damage and negotiated excellent settlement for them. Do you need protection services for Unreported PayPal Business Income outside Canada? We have helped Canadians from all over the world to repair the damage caused by their Canadian tax problems.

Our initial consultation is FREE and CONFIDENTIAL. You will get comprehensive analysis of your tax problems and recommended solutions in the first meeting. Then you can decide what to do from there.

What You Need To Do When Facing the CRA Tax Appeal

If you believe that the CRA have made a mistake when calculating the amount of tax you have to pay, then you need to dispute this. If the thought of doing this fills you with dread firstly you will not be the first person to feel that way, and secondly you don’t have to go into battle alone. The CRA tax appeal may be difficult for someone who has never had to submit one before but for an expert, it is are part of their daily job.

A Notice of Objection has to be raised, and as the CRA will automatically believe that it has made the right decision, you need to have the evidence to prove that they are wrong. Every step of the way must be followed correctly, and there is a time limit for you to put in the CRA tax appeal.

In the Notice of Objection, you need to give all the information you want to be taken into account as part of the CRA tax appeal. This must be accurate and clearly explained, as any mistakes will mean that the CRA will feel justified in re presenting their original bill – plus any interest and charges.

One mistake that many people make is that they believe it is up to the CRA to prove that they have sent the correct bill out, when in fact it is up to you to prove that it is wrong. Evidence is needed and it has to be watertight and backed fully by correct arguments. This is where you need to have a tax expert who will be able to use the policies that the CRA have produced to prove your case. There is no room for error in the CRA tax appeal.

If you can get a copy of the report produced by the CRA, you will be well on your way to putting together the CRA tax appeal, and regardless of what you are told, you are entitled to this. By putting together the best possible Notice of Objection package, your tax representative can both cut the timescale and prevent the need to go to court.

It may be worrying that you are paying out money to someone to help you with an appeal you may believe you can make yourself, but the reality is the money you are spending now can lead to major savings in the future. By winning the CRA tax appeal, your bill can be reduced and you don’t have to worry about how to pay.

The CRA tax appeal may revolve around issues such as the amount of expenses claimed or the belief that there is money paid into your account that cannot be explained. You need to remember that there is a limited time period in which to make the CRA tax appeal and if you miss this you are in the hands of the CRA as to whether or not they will allow a late objection.

Going About a CRA Tax Objection

If you have been contacted and told that you are going to be reassessed on the tax returns you have filed, you still have the right to defend your claims if you are not in agreement to what CRA is reassessing. If you do this it will not be a short process, as it can easily take months, and can even run into years until everything is dealt with. This is a long time to have a CRA tax objection hanging over your head, and you need to do all you can to have the problem resolved quickly and in your favor.

While not wanting to cause you too much concern, there are some people who are still waiting for a resolution to their CRA tax objection after several years and clearly this is not going to allow them to live the life they want to live. To prevent ending up in the same position, employ an tax expert who will be able to put some pressure on the CRA and in turn, they will take some of the pressure away from you.

The news is not all bad, as the reason it takes so long to deal with a CRA tax objection is that the CRA do make sure they get everything right. They don’t like admitting to mistakes, but if they have made one, it will be sorted out in your favor. The downside is that if CRA chooses to stand their grounds, your objection is denied and more time and money will be needed to do another appeal. In this sense, it is better to work with a tax professional who has experience in dealing with CRA tax objection in order for you to have the best percentage of case approval for the first time around.

The cost of losing a CRA tax objection will be high in monetary terms so you need to work closely with the people representing you and make sure you provide every scrap of information they request. Once the Notice of Objection has been filed, the wheels are in motion and there is a good side to this. There will be no attempt made to take payments from you towards your tax bill, but you will find that interest is added. Make sure that you put the money you are not paying away as if you lose the CRA tax objection you will suddenly have a bigger bill than before.

It may seem unfair that you are paying interest when the CRA tax objection took so long to decide and that was not your fault. It is possible that you can have taxpayer relief but this will not be guaranteed. Again discuss this with your representative. The initial debt will still stand, but there will be less to pay in interest and added charges.  You get two chances to apply for this, but if the second request is still not accepted that is the end of it and you need to pay the bill. Make sure you are applying for the right reason, not just because you were not aware of the issue at the time.

FILING CRA TAX OBJECTION

If you receive a notice from CRA tax and not ready to accept it, you may file Tax objection. You can either do it by yourself or can contact with an expert tax accountant to have them checked or reassessed.

How to File Tax Objection

It is fact that people most often do not have any idea about

  • If they are at all entitled to file objection to CRA tax assessment.
  • How to make the objection for reassessment,
  • What is the right time to file Tax Objection,
  • What should be the best supportive documents to boost the chance of winning the case, etc.

All the above factors make the most of the taxpayers find no other option but to swallow up the bitter pills and disburse the amount claimed by the CRASo having a skilled and veteran tax professional is an added advantage for the people who want to file Tax objection.  

You are entitled to withhold the amount till your case is officially evaluated by the CRA. In other words, if you have submitted tax objection, it is not necessary that the disputed amounts are to be paid instantly.  You can pass the time till Tax Appeal Division brings out its final decree about your case.

On the other hand, after you have submitted the objection, then you can ask for the disagreed amount of money that you have already paid to the CRA. For getting a refund of your excess money, never take it lightly by doing it yourself. It is wise to consult an expert for filing Tax Objection.

In case you receive a CRA Notice of Assessment, and want to submit a Tax Objection, you must do it within 90 days. If you want to win a tax appeal, the best thing to do is to hire a competent tax professional to appeal for you.

As there might be unusual variables in regard to the dates, it is a best idea to consult with a trained and experience tax professionals for better understanding of your situation. Always ensure that the documents in support of your Tax Objection are all valid and in correct format.

People most often ignore the idea of consultation with any of the trusted, skilled professionals that can deal with the Tax Objection successfully. Later they regret realizing the error they had made. They might face fiscal set back later because of the error committed at the time of filing.

After you file the tax objection, the Appeal Officer of CRA will review your stand. This officer is the part of the CRA but is autonomous to the Audit section that generally prepares the assessment.  Thus, it ensures that your appeal of objection is being attended by some new eyes. These people have no idea of the outcome.

You can talk to the Appeals Officer with a view to persuade the person about the authenticity of your position. You can also do the same in writing.  In reality, there is no formal “inquiry.” If the Officer is in agreement with you, the reassessment of your tax objection might be left out or might be prepared differently to reproduce your position.

The Benefits of getting help on CRA tax audit

No matter how accurately you have filed your returns and paid them on time, possibility of tax audit from the CRA is inevitable. It is for the purpose that along with taking precautions on guaranteeing tax return accuracy, getting help on CRA tax audit is also very helpful.

You will need to hire services from a reputed, experienced tax resolution company. This tax resolution company deals with such problems and provides necessary tax audit help on a daily basis. Not only does help on CRA tax audit relieve taxpayers from the stress and agony they otherwise have to go through with the CRA audit rather they also work in your interest along with the CRA. Often taxpayers feel rather vulnerable and defensive during the audit process and in order to feel better and deal better with the process, it is essential that some information be on hand to deal with the situation.

Any auditor that audits your assets will be looking to assess your taxes and has no intention to protect your interests. Also dealing directly with the CRA can be disastrous and letting a tax expert handle them, may prove to be more productive. CRA auditors will often ask taxpayers to provide detailed information and documentation to assess all taxes besides wanting you to answer questions that they have regarding your assets. In order to be prepared to answer all those questions and provide all required documents, hiring help on CRA tax audit may prove beneficial in the long term. One benefit is to let you off the stress and let the tax expert handle the CRA auditors and let you focus on how to make your living peacefully. Also assessing any asset wrongly will also result in wrong calculation of taxes which can cost you dearly.

A tax expert can offer initial consultation which will prepare you to face the CRA auditors besides handling them as well. Of course the CRA auditors will need you to answer a few questions however hiring help on CRA tax audit will ensure that you face the least possible exposure with the auditors while they handle all the requirements and smoothly guide you through the audit process.

Also hiring professional help on CRA tax audit ensures that the audit process reaches an efficient and quick resolution while minimizing any chance of a mistake or any misunderstanding that may occur from an auditor.

CRA has prime authority to seize and demand for documents that they may require from related parties and accountants that are connected to you. These discussions, notes and documents can also be used against you by the CRA if they wish whereas hiring help on CRA tax audit and sharing information with them assures and guarantees that no shared information is leaked out. Also CRA has no authority whatsoever to demand for any information from outside hired services.

Giving complete details to a tax expert and hiring help on CRA tax audit ensures that all your tax returns are filed effectively and all written submissions are properly submitted, along with discussing and explaining your position clearly to the auditor relating to certain issues.

 

Summary

Hiring help on CRA tax audit can be very beneficial for taxpayers. Tax experts can efficiently handle all matters with CRA auditors and get you through the process instantly and easily. To relieve you off the stress of audit, hire help on CRA tax audit and get through without much stress and anxiety.

 

Essential Information for Canadian Taxpayer Relief

Any sensible person would never want to suffer from tax debt that is uncontrollable and the best way to avoid paying of interest and penalty on your taxes are to pay them on time. There are however times when seeking Canadian taxpayer relief becomes out of control when an individual is forced to pay interest and penalties along with the accrued tax return amount.

Depending solely on these circumstances, the CRA allows relief for taxpayers. This relief allows waiving off any additional interest or penalty that adds up on the original tax amount. There are also ways through which the original tax amount can be paid in easy installments throughout the year. Under Canadian taxpayer relief provisions, the taxpayer is allowed a period of 10 years in which he or she can make a relief request provided that their situation comply with the allowed provisions under which Canadian taxpayer relief is granted.

It should be remembered that CRA very exhaustively and comprehensively confirms on whether a Canadian taxpayer reliefrequest complies with the stated situations of relief. There are certain situations that render a taxpayer as being eligible for CRA taxpayer relief. These situations include

–          Extraordinary Circumstances

–          Financial Hardship

–          CRA’s Action

Extraordinary circumstances refer to situations that are beyond the control of a taxpayer, rather any individual. Any such occurrence that acts as a hindrance for a taxpayer towards payment of taxes such as a natural disaster, serious kind of illness, services disruptions of any kind such as a postal strike, etc can be waived of by the CRA.

Financial hardships also make an individual eligible for Canadian taxpayer relief provision, however CRA will to an extended limit confirm on the inability of a taxpayer to pay and only after confirmation will it waive off the excess interest and penalty on the tax amount. Not every financial inability is entertained in this regard whatsoever, except those that cause inability to provide even the very basic necessity of life such as food, clothing and shelter.

Another Canadian taxpayer relief provision that allows waiving off penalty and interest is due to the doing of the CRA itself. For example any interest or penalty that is imposed on a taxpayer which resulted due to a late processing by the CRA or delay in informing the taxpayer about the tax is also waived off by the CRA.

Other than the defined reasons there can be other circumstances in which the Canadian taxpayer relief can also levy however the provided reasoning should be truly justified. Also in order to consider the taxpayer relief request, the Canada Revenue Agency considers certain factors that contribute towards the decision of accepting or rejecting the request.

These factors include

–          Tax compliance history

–          Whether the existing arrears amount is knowingly allowed to exist

–          If previous tax affairs were handled with a reasonable amount of care         and

–          The appropriateness of the taken actions.

Whatever the action may be, it is totally on the discretion of CRA to grant or refuse Canadian taxpayer relief request and it is in no way bound by the grant relief provision.

 

Summary

The CRA under the grant relief provision reserves the rights to waive off penalty and interest levied on taxpayers provided they qualify for it based on the specified rules. Taxpayers supported by the Canadian taxpayer relief program can prove their inability to pay and avail the provision for themselves.

Why You Should Hire a Tax Accountant

When it comes to hiring a tax accountant. Hiring an inexperienced accountant with no expertise and knowledge specifically in taxes will not in any ways help you rather at points can harm your overall situation alright.

Filing your tax returns every year is an obligation on every citizen and every year it is the same question asked by numerous individuals on whether they should hire professional help to file their returns? Will hiring a tax accountant or tax consultant help in any way? The answer is a definite yes. First things first every tax situation is different from the other and in order to avail all amnesties applicable on your tax situation, a tax accountant will work to your benefit as he or she is a professional of the field and has far more experience of dealing with taxes and many of us do.

The best way to hire a tax accountant for yourself is to look for certified professionals who are experienced in the tax area as they are the ones who on a daily basis deal with several tax cases and situations and know best what will work out for you. There are often times when people suffer consequences owing to incomplete or improper filing of returns which is why a tax accountant should be chosen for the job to avoid any severe actions on behalf of the CRA.

Also when it comes to paying your taxes and availing every amnesty that you are eligible for, hiring a tax accountant will help especially in regard that new tax laws are governed almost every year and not knowing them and how they will work in your favor is a big loss on your part. Only a tax expert who on a daily basis caters to cases and situation is well aware of what to do in what circumstances. Also since these professionals are always dealing with the CRA they are more informed on how CRA would react to a certain stimuli by the debtor and what a tax payer should do in case CRA objects o him in any way.

You can look for reputed services companies that offer professional tax accountant services and consult friends and family members to find the best tax accountant for yourself.  You can however also check on the reputation of the accountant you are choosing for your tax matters and ensure that the selected candidate does not have any complaints registered against him or her.

Besides individuals, small and large businesses too benefit a lot when it comes to hiring a Canadian tax accountant as not only can they manage employee taxes and payrolls but can also help in making the most of available money while getting the best of the tax breaks for you. You can always opt to file your returns yourself; however any mistake will ultimately take you to the doors of a tax accountant, so why not make a wise decision on time.

Summary

 

Hiring services of a tax accountant helps in moving away from several taxes related issues that can arise later due to a mistake or having no knowledge of a certain tax related issue. Tax accountant can help in saving you precious money, time and hassle that you will spend with the CRA in absence of a tax accountant.

What is a Canadian Taxpayer Relief

Canadian Taxpayer relief refers to reaching a negotiating with the CRA where the debt issue is resolved through waiving or cancelling off the interest or penalty amount from the actual payable taxes of a debtor. Canadian taxpayer relief program was designed to offer relief to taxpayers who were unable to pay their tax debt s owing to

– Any extraordinary circumstances

– An action of the CRA (Canada Revenue Agency)

– Financial hardships resulting in inability to pay off debts

– Other similar circumstances

Canadian tax relief for a debtor is specified differently under cancelling of the debt and wavering of the tax debt. By cancelling of a tax debt it is meant that the already levied penalty or interest on a taxpayer is cancelled either in whole or partially, however wavering of taxpayer debt allows amnesty or relief from a future interest or penalty that will be levied.

As listed above one way of Canadian taxpayer relief is wavering or cancelling of interest and penalty owing to extraordinary circumstances. These extraordinary circumstances include

– occurrence of an accident or any illness

– facing disasters that are either natural or manmade such as floods, fires, etc

– any civil disturbance incidence that cause disruptions in any one or many services such as strikes in postal service         and

– Severe mental or emotional distress such as death of a close or immediate member of the family.

 

Further on actions of the CRA that allow Canadian taxpayer relief include

– Any error present in the CRA material that resulted in a taxpayer filing a return of any payment that was based on any incorrect information

– Any processing delays that resulted in not informing of the taxpayer and the assigned time of paying owed amount was over.

– Processing error

– Any incorrect information to a taxpayer usually in writing by CRA

– Any undue delay in audit completion or resolving of an appeal or objection

– Any information delays that hinder taxpayer from paying his dues on time.

 

These are the conditions besides proved inability to pay taxes and other circumstances that make a taxpayer eligible for Canadian tax relief.

There is a common misconception that taxpayer relief can be obtained only once and so giving it the best shot once is always a good idea. This is not true as tax relief can be applied for by individuals as many times as they are warranted for it. That is when any of the above mentioned conditions are present Canadian taxpayer relief can be applied for.

Also applying for a Canadian taxpayer relief through not filing the tax returns initially and then later on proving bankruptcy or inability to pay will not render a taxpayer eligible for the Canadian tax relief. Not filing taxes is an offense and can be prosecuted. It is essential to file all outstanding returns before filing for the Canadian taxpayer relief program as it will not be considered until everything is up to current.

Also any birth disability with an individual will not make him eligible for a Canadian taxpayer relief program as if he or she has managed to pull it this far they can do it in future as well. Since filing for taxpayer relief is a very complex process, hiring the service of a tax expert company such as Tax SOS will help you in following the right direction and ultimately success in getting the Canadian tax relief if you qualify for it.

 

Summary

Canadian taxpayer relief program was designed to relieve tax debtors from paying interest and penalties that are levied on them that were either due to an error of the CRA, inability to pay off, an extraordinary occurrence or some other circumstances. CRA allows tax relief to any individual as many times as he proved to be worthy of it.

Taking Part In The Canadian Voluntary Disclosure Program

It is easy to make a mistake if you fill in your tax return without professional help. It could be that you misinterpret what needs to be done, or just don’t put the figures in the right place. In Canada, the Canadian Voluntary Disclosure Program allows residents to contact the CRA and let them know about incorrect or inaccurate information that has previously been submitted. The sort of information that is allowed, will be details that has been incorrectly reported, or that was missed of the disclosure completely.

The Canadian Voluntary Disclosure Program is something that is open to any taxpayer, and this can be a business as well as a individual. It does not matter if you are a Canadian resident or not, an employer or employee and if you prefer, you can authorize someone to put in the disclosure for you. It is at times like this that there should be someone helping you. Had you employed professional help at the beginning, you may not be in this position, but at least you are getting the chance to put things right.

There are many things that you can disclose as part of the Canadian Voluntary Disclosure Program, and the areas that will be relevant to you will depend on the nature of you employment.  It can be late-filed information returns (e.g. T4, NR4, T4A-NR, T106, T1135, T1134), or GST/HST omissions, unreported source deductions, expenses that should not have been claimed, business income or unreported personal, from sources inside or outside of Canada and late-filed income tax (for example T1, T2) returns. This is not the full list, but will be appropriate for many returns.

If you are unsure as to whether or not you should take part in the Canadian Voluntary Disclosure Program, it is worth remembering that doing so could prevent you incurring penalties and even being prosecuted. You would need to pay the tax that you omitted paying previously but this is to be expected.

Before filling in the disclosure it is worth checking with your representative that you have all the information needed. There are a number of reasons for filling in this disclosure – not least the fact that it can stop prosecution. You must start the process before you are informed that there are queries being raised regarding your form, and it will relate to returns that are more than 12 months old.  If you do not a full and detailed submission in relation to the Canadian Voluntary Disclosure Program, your application for a disclosure can be refused.

If you are taking advantage of professional help, they will know where to send it, and it will include the need for you to fill in Form RC199, or provide the information in your own words. They will have to include Form T1013, Authorizing or Cancelling any Representative, or Form RC59,  and they must be signed. They will then send it to the relevant tax office dealing with the Canadian Voluntary Disclosure Program.

You will be notified of the next stages after about few weeks, and it is possible you will be asked for more information and this will be expected within 30 days of request. Next you will be informed as to whether the disclosure as part of the Canadian Voluntary Disclosure Program has been accepted or not.

What can be claimed as Taxpayer Relief Help?

Taxpayer relief help can be given in conditions where some actions of the CRA have come in the way of the taxpayer’s obligations. Other conditions that apply for seeking taxpayer relief help could be inability to pay on part of the taxpayer due to financial hardship and through circumstances arising out of natural calamities or civil disturbances and disruptions.

CRA may cancel or waive certain penalties and interest charges when they affect a taxpayer’s ability to pay the taxes resulting mainly from actions of the Agency itself such as delays in processing. Such delays may result in the taxpayers not getting informed within a reasonable time period, stating the amount of tax to be paid. The delay in the relaying of information can result in the taxpayers not being able to pay their taxes within the time limit allowed.

The actions of CRA could also be erroneous, leading a taxpayer to file the tax return or make payments, guided by information which may be incorrect. The errors also could be in the processing of the notices. Other actions of the CRA that could have an impact on the taxpayer relief help would be a delay in the resolution of an appeal or a Notice of Objection or in the completion of a tax audit.

CRA also considers waiving or cancelling the interest charges and penalties where an inability is proven and confirmed by the taxpayer who may be experiencing financial hardship. In these cases, the penalties could be waived or cancelled in part or in whole towards their tax obligations. CRA reviews the case if the taxpayer is not able to make the tax payments or negotiate payment plan schedules as the interest charges make up a considerable portion of the payment amount.

As a part of the taxpayer relief help, CRA will assess that the accumulated interest payment would result in an extended inability on the part of the taxpayer, resulting in financial hardship and a burden on the provision of basic necessities like food, medical help and conveyance or shelter expenses. In such cases, taxpayer relief help is provided by considering cancellation of all or a portion of the entire accumulated interest amount.

It has to be noted that CRA would not consider a cancellation of a penalty as a result of the taxpayer being unable to pay the taxes because of financial hardship, unless it can be proved that it was due to extraordinary circumstances which prevented tax compliance. This could be because of natural disasters or in special cases where a business experiences severe financial difficulty. Enforcement of penalties would affect the continuity of that business’ operations, resulting in the employees losing their jobs or the community’s welfare being jeopardised. In these cases, penalties could be waived as taxpayer relief help.

It is a wrong notion on the part of some Canadians that the taxpayer relief help is a program that is allowed on a one-time basis. This is not true, as all residents who have been charged interest or penalties carry the right to seek relief every time that it is warranted. The taxpayer relief help group does not maintain any inventory of collections and it will review cases on their submission merit and not by any influence of a collection diary.

How to deal with a CRA Tax Problem?

The CRA tax problem will arise when you have not paid the tax amount outstanding in your name by the tax return filing deadline. The problem will still raise its head when the CRA does not agree with the income or the deductions that you have reported in your returns.

Many people are not sure how to handle a Collections Officer from CRA who gives them a call before coming to their home or their office. Before you get a Notice of Assessment from the CRA, it is advisable to be proactive and prepared and seek professional help from specialized tax consultants. When you seek professional tax consultant’s help, there is no question of letting the Collections Officer into the home or the office as the Officer will be taken care of by your legal tax representative. While seeking professional help for the CRA tax problem, you have to keep in mind that the Collections Officer does not have the authority to forgive or pardon any tax debt amount of yours. The task of the Collections Officer is to collect the entire tax amount owed by you.

It is a mistake when you want to tackle the CRA tax problem all by yourself. Collection officers could be very aggressive and their main aim is to collect the full tax amounts as fast as possible. They are backed with full collection powers and the taxpayers are not fully aware of their rights are when it comes to collection and enforcement of taxes.

When you receive a Notice of Assessment or any communication from the CRA concerning your tax debt, you need to hire the services of tax consultants as soon as possible. These consultants have the necessary experience in handling the CRA collections and have been solving CRA tax problem for many years. They may well be in a position to challenge the Notice of Assessment that have been sent by the CRA to you. They may counter that by filing a Notice of Objection. They will also be adept at arranging or negotiating a payment arrangement or a plan that may be acceptable both to you and the CRA.

When such negotiations are carried out in the early stages of the CRA tax problem, enforcement actions could well be avoided and you will be saved from the embarrassment of seizure of your bank accounts or your wage garnishments. Even if your wages have been garnished or your bank account has already been seized, you can still take care of the CRA tax problem through your tax consultants who can work out a satisfactory schedule of payment to the CRA. When the CRA accepts it, the garnishment of your wages will be lifted and the freeze on your bank account will be released.

When a payment negotiation plan is accepted by the CRA, your tax consultants may also advise you in connection with the consideration of a taxpayer relief or fairness application in case of qualification as a result of extra ordinary circumstances or financial hardship that may have affected your inability to file your tax returns in the first place.

Eligibility Criteria for the Taxpayer Relief

If you want to consider sending out an application under the Taxpayer Relief Program in Canada, you have to first think in terms of hiring some professional consultants who can help you go through with it. This should be done even when you find a lot of information on the web around CRA’s Taxpayer Relief Program which was previously referred to as the Fairness Program.

Not everyone who reads the information on taxpayer relief scheme can understand it thoroughly. The information could turn very easily into misinformation around this program. It is the experienced tax accounting firms who can interpret all the details concerning the taxpayer relief program.

The important objectives of the taxpayer relief program are worth going through after investing time and effort into their application. It is better, still, to employ the service experts who know the program, in and out.

The Taxpayer Relief Program in Canada was created to enable the Minister of National Revenue to offer relief schemes from penalty and interest charges when certain circumstances held a taxpayer back from meeting the tax obligations. The taxpayers could be individuals or business corporations. The term `taxpayer’ also includes employers or payors, partnerships, organisations, trusts, estates, Goods & Services Tax (GST) and Harmonized Sales Tax (HST) claimants or registrants.

These exceptional situations could be broadly categorised as:

  1. Inability to pay the taxes on account of financial hardship.
  2. Certain actions taken by the CRA; those were of an erroneous nature.
  3. Extra ordinary circumstances such as acts of nature of Force Majeure.
  4. Other Circumstances.

 

The taxpayer relief program makes a distinction between the cancellation and the waiver of the penalties and interest charges. The justification behind this was provided by the CRA as it understood that the granting of relief to a taxpayer was redundant if the same taxpayer was burdened by interest and penalties, making the whole relief scheme a futile exercise. The term `cancellation’ refers to penalties and interest amounts after they are assessed or charged, towards which the relief is provided in whole or in part by the CRA.

The extraordinary circumstances cover penalties and interest charges that are either cancelled or waived in part or in whole when they are affected by circumstances beyond the control of the taxpayers. These extraordinary circumstances may prevent taxpayers from paying their taxes when they fall due, preventing them from filing their tax returns in time or complying with the tax obligations. These circumstances include natural or man-made disasters like a fire or a flood. They may include civil disturbances with services being disrupted. There may be circumstances like a serious ailment or an accident that causes partial or permanent disability. The circumstances also include severe emotional and mental distress that may arise out of certain events that occur in a family such as a death in the immediate family.

A response from the CRA concerning the Taxpayer Relief Program may take anywhere from three months to a couple of years depending on the number of request applications that fall due. It is, therefore, advisable, to engage the services of tax professionals as they will be in the best position to assess whether your request is adequate or not. This makes it worthwhile before you file the application for the review and consideration of the CRA.

Tackling and Surviving a CRA Tax Audit

The best thing to do when you receive a CRA Notice of Assessment is to stay calm and deal with it.  You have to open all the brown envelopes that you get from the CRA. If you happen to receive calls from the CRA, you have to receive them without flinching or return them promptly if you have missed them. When you start ignoring tax problems, they do not go away. They come back strongly at you in the shape of a CRA tax audit.

 

CRA tax audit will generally be notified in a letter format. On some rare occasions, a telephone request would be made by the CRA. This letter will set out the details like the audit years or the auditor’s contact information. It would also include a list of papers that the CRA may wish to inspect and this could include your financial statements, copies of tax returns, schedules of depreciation or payroll records.

 

When you are going to be reviewed with a CRA tax audit, you have to respond calmly and submit all the information that is being requested. To be specific, if the CRA wants to review your travel expenses, they will set out a date for you to provide the necessary documentation to support what you have reported in your tax return. You have to make sure that you are able to meet the deadlines that have been set by the CRA tax audit. When you have all the necessary paperwork to support your case but you are tardy and late in sending the information, you will get your tax return reassessed without giving you the credit. You will have to go through filing an adjustment to make the claim once more.

 

As a taxpayer, it is not possible that you will be able to stay organized every time. Sometimes, you will not be able to find all your tax related documents at one place. But the fact remains that you have to submit all the documents that are required in a CRA tax audit. Your tax consultants or the CRA are not going to come around and help you in finding the documents. Any excuse about not being able to locate the required documents will not be accepted by the CRA.

 

One of the rules of the CRA tax audit is that if the review ends in a reassessment, it is wiser to pay the tax balances promptly so that you avoid interest charges subsequently. Any disagreement you have can be taken care after the payment through a Notice of Objection. Should the CRA reverse its decision your reassessment, you will get your money back.

 

It is better to take the help of the tax accountants to help you in these tax battles. If you feel that you are receiving unfair treatment from the CRA, you can lodge a complaint with the Taxpayers’ Ombudsman Office. This office will review all complaints related with service and make sure that the Taxpayers’ Bill of Rights is adhered to, even if it cannot change all the tax laws in your favor.

Filing the CRA Notice of Objection

When you receive a Notice of Assessment from CRA and do not agree with few things in it, you may take a decision to file a CRA Notice of Objection. You can fill out your forms and send it either through your tax accountant or electronically, by using the CRA Response Program which could be found on the tax shelter source website.

 

When the CRA Notice of Objection is filled out, the completed forms have to be printed out at first and then mailed to the CRA. You may have to file a separate CRA Notice of Objection for each tax year if you have made deductions in more than one year and have been reassessed for those particular years. For example, if you have made deduction sin 2011 and 2012 and CRA has reassessed you in both the years, then it is necessary that you file a separate CRA Notice of Objection for each of those years.

 

If you have made deduction sin 2011 and 2012 and if the CRA has only reassessed the 2011 one, you have to file a notice for 2011 only. You do not have to file a CRA Notice of Objection for a year for which there has been no reassessment, for that notice will not be treated as valid.

 

You can always receive a reassessment for the same year at a later period. One tax year can be reassessed many times if it is still under the reassessment period that is allowed. Sometimes, the second or the third reassessment may come after a CRA Notice of Objection has already en lodged. This notice will stand invalidated by that subsequent reassessment. When a second or a third reassessment arrives, it is the responsibility of the donor to file another Notice. If you happen to get more than one reassessment for the same year, it is better to seek professional advice. You cannot leave things to chance.

 

When you take professional help, your adviser will have to make sufficient copies of the CRA Notice of Objection before you get it completed for every year that you have been reassessed. This Notice has to be filed with the CRA within a period of ninety days from the date that reassessment has been mailed to you. It becomes your responsibility to make sure that the Notice is filed within the time period. The date of the Notice of Assessment will appear on the left hand corner at the top on the initial page of the reassessment document. It will also inform you about the CRA Tax Services Office that has mailed the notice to you.

 

The CRA Notice of Objection has to be delivered to the Chief of Appeals at the same Tax Services Office that has mailed the Notice of Assessment to you. In this Notice, you have to fill out all the requested information such as your full name, your address and the Social Insurance Number, along with the tax year that you have been reassessed for. You also have to fill in all the details of your authorized representative or your tax consultant. The copy of the Notice of assessment has to be enclosed. You have to take the acknowledgment with the date stamp from the CRA Tax Services Office.

The Taxpayer and the Voluntary Disclosure

When a taxpayer feels that the filing of the tax return was not so accurate, there are bound to be fears concerning possibilities of a CRA audit and assessment. This will also be the case for those employers who have not remitted their Sales Taxes or their payroll deductions. It will be a nightmare of suspense for an individual who has not bothered to disclose the earnings from abroad. All such people should actually thank the CRA for implementing the Voluntary Disclosure program.

Now, a taxpayer can rectify inaccurate or insufficient filing of tax returns without being afraid of penalties or prosecution. Voluntary disclosure allows these taxpayers to prepare and then assess the outcome of their disclosure. They can do this either on a named or even on an anonymous basis.

In the case of a named voluntary disclosure, the taxpayer will have to provide a Form RC 199 or a Taxpayer’s Agreement Form, along with the full postal code and other contact details that include the Social Insurance Number. In the case of an anonymous voluntary disclosure, the taxpayer will have to disclose only the first three digits of the postal code and the contact information of its representative, the gender and age of the individual, the taxation years and the reporting periods that are going to be involved in the voluntary disclosure. Other things that have to be disclosed are the amount of the correction in taxes, the type of the return which is involved, the type and the reasons for their earlier omission, the principal business activity of the submitter and how he or she will be able to meet the conditions of use set by the CRA.

There are several benefits to using the voluntary disclosure program. The principal one being the way it provides the taxpayers a safe method, relatively speaking, of rectifying the deficiencies in their previous tax return filings. The other biggest benefit is the prevention of the enforcement procedures special investigations into your financial affairs. The CRA will not take any action against the taxpayer if he or she discloses before an investigation notice of assessment or an audit is initiated. The taxpayers have to be aware that the consequences of a criminal prosecution can lead to a jail time of one year per charge along with penalties that may range anywhere from a thousand to twenty five thousand dollars. Many taxpayers have lost sleep and have suffered emotional stress from this burden.

People who avoid thinking about voluntary disclosure have to be aware that the penalty for late filing on the first offence is five per cent of the balance of the taxes that is outstanding and one per cent for every month that the balance will remain outstanding to a maximum period of one year. For any additional offence, the penalty goes up to ten per cent of the balance which is outstanding and two per cent for every month to a maximum period of twenty months. Interest is also added to the principal amount and it is charged in the next month.

The Difference between Tax Evasion and Income tax Fraud?

There is a significant difference between the concept of income tax evasion and that of an income tax fraud. A comparison can be done by drawing a parallel to the Government of Switzerland and its tax treaty with the United States of America. For example, the Swiss Government will shield its largest bank from the investigative clutches of the tax authorities in the case of a tax evasion concept while an income tax fraud will signify a person who holds a Swiss bank account for the purpose of hiding illegal wealth.

To expand the example further, Switzerland is a place with full tax jurisdiction but it is also famous for its secrecy laws in the banking sector. About five years ago, the United States Justice Department deferred the prosecution of UBS AG, the largest Swiss Bank, in exchange for the revelation by the bank of the identity of about three hundred clients who were resident of USA. The bank, ultimately, acknowledged its contribution and participation in the violation of the laws of the United States. Secrecy or no secrecy, such principles or schemes contribute in defrauding the country from where the residents store their illegal and undisclosed wealth in Swiss banks, amounting to an income tax fraud.

Even then, the deferral of the criminal prosecution did not hold back the IRS from chasing claims against the U.S. taxpayers. IRS issued summons to UBS AG Bank asking for confidential information on not one but fifty two thousand accounts with an approximate value of about fifty billion dollars in assets. The Swiss Government, as expected, refused to help with the summons by declaring that such acts violated the Swiss banking secrecy laws.

There was another quaint angle to these proceedings. The U.S.-Switzerland Tax Treaty calls for information exchange requiring respective tax authorities to share the tax information for avoiding an income tax fraud. The Treaty, however, provides that neither parties is obligated to execute administrative measures that are in conflict with their domestic regulations and legislation.

The difference between income tax evasion and income tax fraud could be explained by this incident in full. The summons from IRS to the UBS AG Bank have given rise to a legal battle on an international front that are testing the tax treaty obligations against the laws of banking secrecy. The Swiss government has drawn the line on the difference by maintaining that tax evasion cannot, by itself, be evidence of an income tax fraud.

The big conjectural question on this issue is that the UBS AG Bank has admitted being guilty to activities that resulted in the deferral of the criminal prosecution, but it holds its ground at the same time that an income tax fraud is not the same as tax evasion by not disclosing the requested confidential information.

The vital distinguishing feature of an income tax fraud is an intent by the taxpayer to defraud the government by not paying the taxes which are lawfully due. An income tax fraud is punishable by both civil and criminal penalties. The government has to show the burden of proof to determine the case of an income tax fraud by a taxpayer. Practically, if the taxpayer has a reasonable legal argument to back up why he or she has not paid the due taxes, it is likely that the taxpayer will escape criminal charges.

The Civil Consequences of Tax Evasion Canada

People have to think a thousand times before pleading guilty to tax evasion Canada because of the civil consequences they may have to face. It is a general case that tax evasion Canada is followed up by criminal charges and it is accompanied with a civil assessment or the reassessment of taxes. The CRA will be keen to get to the bottom of the reason why the taxpayer was concealing more income than he or she intended to declare.

The basis of the tax evasion Canada charge is the very failure to declare the income earned during the year. The taxes are reassessed depending on the income which is undeclared and it can bring in heavy negligence penalties.

There may be many reasons why a taxpayer may want to plead guilty to a criminal offense like tax evasion Canada. When a taxpayer seeks professional accounting and legal help, he or she is advised as a client when being charged with tax evasion Canada that it is necessary for him or her to understand that a guilty plea would bring in consequences which may include that the plea stands as prima facie or it could be a proof of facts which is equivalent to a reassessment of taxes.

It is important, therefore, for professional counselors, who are representing a taxpayer who is about to plead guilty for tax evasion Canada, to understand that the plea for guilt is actually an admission of the basic elements of the offense. This also applies to a taxpayer who has been reassessed. During a tax evasion trial, the defense may have an agreement concerning relevant facts for the sentence. At other periods, facts could be disputed and the party which is trying to rely on disputed facts will have to prove them. To give an example, a taxpayer may agree that he or she is guilty of tax evasion Canada in a particular year but at the same time, may disagree as to the amount involved of the taxes. In such cases, the defense counsel during the criminal proceedings have to take care in establishing the facts that may be agreed to. At the same time, the adviser in the civil proceedings have to assess carefully what the guilty plea may stand for and what it may not stand for.

Before understanding the reasons that contribute towards tax evasion Canada, it is important to take a look at the concept of beneficial ownership which is a common law that distinguishes the rights that a person holds with a beneficial interest in property or assets from those who hold such interests legally and in name. The common law that surrounds beneficial ownership is a little complicated but is signifies that when a person holds or owns a property like a house or securities legally, his or her name will be on that property or it will be properly disclosed. But, when a person holds a property beneficially, the said property may not be registered in his or her name and the true owner may remain obscured.

The issue of tax evasion Canada may revolve mainly somewhere around beneficial ownership of private corporations or trusts while also involving ownership of real property. This concept identifies the important roots of the tax evasion Canada problem as it could open the Pandora’s Box to money and tax laundering.

Taking Advantage of Tax Amnesty Offer by the CRA

When there is a situation where you have to take up the tax amnesty offer provided by the CRA, it is advisable to seek expert professional advice on these tax matters. Tax amnesty offers a second chance to the Canadian residents who have not filed their taxes regularly and are feeling nervous about it. After all, it can be deemed as a criminal offence if you do not file your tax returns.

Many taxpayers, whether they are individuals or business corporations, have a cause to worry if there are any unfiled tax returns or cases of income which have not been reported accurately. There may have been cases of overstated expenses too. There is a tendency that if a taxpayer does not file an income tax return for any single year, he or she try to hide while filing subsequent returns of taxes. They are scared of the possible consequences and the reaction from CRA.

The tax system in Canada is self-assessment based. It means that the residents are required by law to file their income tax returns and also include all their sources of income that involve foreign earnings or other offshore income. As the system is rather complicated, many taxpayers evade from reporting deliberately.

Taking the tax amnesty route is a possible way for the taxpayers to declare by coming forward all their tax returns which they had not filed earlier. There are few tax firms in Canada that specialize in handling tax amnesty and voluntary disclosure program. They deal with the CRA to prepare tax returns and to file for tax amnesty for their clientele.

Any taxpayer who has not filed his or her income tax returns or not filed GST returns can take advantage of the CRA’s tax amnesty offers. This stands true in cases of income which has not been reported accurately previously, involving tax evasion or earnings from illegal activities. This is the same as using voluntary disclosure or a tax pardon program.

When CRA offers a tax amnesty program, the situation is not something that has to be met with nervousness. By filing a voluntary disclosure and coming forward to report their undeclared income, taxpayers can breathe easy with relief as the process is not unpleasant, particularly when they have their accounts represented by professionals. In the bargain, they also avoid civil or criminal prosecution. They will also save themselves from penalties and have their interest charges reduced.

A taxpayer qualifies for the tax amnesty offer only when

  • CRA establishes that the disclosure is voluntary and that it is accurate and complete.
  • The disclosure involves a penalty.
  • The disclosure includes information which is at least a year past or earlier.

The disclosure by the taxpayer has to be done before CRA approaches that particular taxpayer with a demand to file. The disclosure should not be just to cover up late filing under a year from the due deadline for the purpose of avoiding late filing penalties or prosecution. To be eligible for the Tax Amnesty program, all the conditions above need to be met.

 

Getting Ready to File Income Taxes Past Years

It will never be too late for you to file your income taxes past years. People think in terms of filing their income tax returns generally for the current year. But, if you have not filed tax returns for the past few years or you have tax returns which are overdue or outstanding, you can seek tax accounting help from professionals.

 

People who have not filed income taxes past years have to be wary about penalties for tax returns which are being filed late. CRA may apply a penalty for failure to file the taxes on time. The defaulters may also get a Notice of Assessment. This notice will summaries the earnings on which the default assessment has been based. The Notice will also inform the defaulters the date by which the overdue returns have to be filed. Penalties will be severe on people who have more than a single tax return which is outstanding in their name or if they have a poor history of tax return filing. All those who have not complied with a request to file their tax returns will be dealt with severely.

 

The CRA can collect information concerning your income taxes past years from your banks, employer and other government agencies. If you seek professional help, the tax accountants will be able to connect your Social Insurance Number and can access details about your filing status with the CRA to ascertain the actual submission periods that have been reported.

 

The accounting firm will also work with you to ascertain the deductions that could be relevant and help you in locating that information. If you are able to retrieve your past receipts, information, expense bills and bank statements for the purpose of filing income taxes past years, it would make things easy for you and your accountant. There are few deductions that you will be in a position to claim even when you do not have receipts.

 

Your tax accountant can submit a nil returns if you were not required to file a tax return for some of the total outstanding years when you decide on filing income taxes past years. This will help you to get up to date with the CRA tax office. When you complete your tax returns which are outstanding by filing for income taxes past years, you may be able to match your past entitlements for the benefits due to you like, GST tax credit, child tax credits.

 

When you file your late return, you may still be entitled for refunds to take advantage of that. It will be a daunting task to retrieve all the information and compile it on your own. It is, therefore, better to take professional help. It will give you the peace of mind when you bring your tax records up to date with the CRA. The tax accounting firm can help you in keeping your records in a systematic manner. It can help you with your record cards, newsletters, annual reminders, bank statements, log books, receipts and bills.

Taxpayer Relief on Account of Natural Disasters

Many Canadians are not aware that taxpayer relief could be available to them in circumstances where the taxpayers are late when filing their GST returns or in remitting the required GST as a result of the disruptions that are caused by natural calamities and disasters.

Natural disasters could strike anywhere. You can take the example of the worst flooding that Alberta was affected a while ago. It is important to note that, as far as tax obligations are concerned, if you are unable to fulfill your tax obligations due to any natural disaster like flooding, taxpayer relief may be available to you from the CRA.

The Canada Revenue Agency has also reminded the taxpayers in the country of the availability of the provisions of taxpayer relief to them in respect of the flooding some seven months ago. There is a taxpayer relief provided for corporations who were unable to file the T2 taxation returns. The taxpayer relief provisions are available to all the taxpayers and they will include individuals, organizations, partnerships, trusts and also the GST/HST registrants.

In normal circumstances, when a taxpayer does not file the tax returns and remit the correct sum of taxes to the CRA as it is required by law, he or she is going to be subject to a specific penalty of a fixed sum along with the interest charges on the balance of the tax amount outstanding. The taxpayer relief provisions allow for the cancellation or the waiver of interest and the penalties in part or in full.

The cancellation will refer to the interest and the penalties which have already been assessed for which the taxpayer relief is granted while the waiver will refer to the interest and the penalties that have not been assessed yet for which the relief is granted.  The taxpayer relief provisions are not restricted to any particular situation although CRA has made it clear in its publications that the provisions will apply in three broad categories. These are:

  1. Circumstances which are beyond the control of the taxpayer including events such as natural disasters.
  2. Errors or mistakes committed on part of the CRA’s actions.
  3. Inability to pay by the taxpayer on account of financial hardship.

The taxpayer relief provisions are not applied by the CRA automatically. The taxpayer has to request the application of these provisions as per the category of the `Circumstance’ and it has to be applied on CRA’s required form along with the contact information, Social Insurance Number or the GST/HST Registration Number, the taxation years that are involved, giving full details of the facts and the reasons behind the Circumstance. The details will have to include how the circumstance has had an impact on your ability to meet the tax obligations with relevant documentation as a support. It has to be accompanied by planned steps that will be taken to resolve the inability to comply.

For taxpayer relief periods, initially CRA allowed only past ten years of tax owing and would disallow relief request for any tax debts owed more than ten years ago. Recent court case changed the direction and forced CRA to extend the time period to more than ten years. However, the penalties or interest relief only applies to last ten year taxes owed although the tax debts was started more than ten years ago.

 

Best Practices in Dealing with the Canada Revenue Agency (the CRA)

It is a well-known fact that dealing with the CRA is never an easy task.  To make things worse, the combination of dealing with the most confusing and complicated statutes ever written by tax lawyers, and dealing with the CRA, one of Canada’s most powerful and sophisticated agent, can prove to be challenging to even the most experienced tax professionals.  Taxpayers should never even think that they can resolve their tax problems easily or quickly on their own without professional help.

Always remember that what you say to the CRA can be harmful to your case.  As the information you provide to the CRA can be used against you. It doesn’t matter how friendly the CRA agents seem to be. Their jobs are to collect tax revenue, not to protect your interests.

Typically, professional help can ensure you pay the least and legitimate amount of tax.  However, there will be a fee involved for any professional service in dealing with the CRA’s tax problems. As taxpayer, you need to weight the costs and benefits of hiring a professional help while making sure the overall benefits outweigh the costs.  The bottom line is that at the end of day you are financially better off after professional fees are paid.

When dealing with the CRA, just like dealing with court system, you need to keep good documentation or proof.  Keep a good log of the communications with CRA agent including after talking to the CRA over the phone, write down what you said, and what was the response from the CRA; write down the details such as the number, the date and the time of calls you made to the CRA, and more importantly the agent ID and name of the agent you spoke to.  The CRA has many agents with different levels assigned to them answering the calls – and without a way to track the person you spoke to – you might as well not bother with writing down anything.

Another good practice is for you to try to pay some or full amount of tax owing whenever possible because this will stop the interests compounded daily from growing. Some people worry about paying taxes is a sign of admitting guilt. That is far from the truth. The payment itself will not be treated as if you have accepted defeat.  If you end up being right after the fight, that money you prepaid will be refunded.

The Canadian tax system works on the voluntary basis therefore taxpayers are under obligation to correctly report and paying the taxes owed.  If the CRA comes after you because you did not file one time or pay the tax owed, you are required to pay penalties, interest on the amount you should have paid.  As a rule of thumb, every seven to ten years the principal can be doubled depending on the interest rates. Many taxpayers are overwhelmed when they discover that of the large tax debts they owe, half is the interests.

Paying the tax debts as early as you can may become one of the best actions you’ve ever taken; even if you can’t pay it off in a lump sum, do make a budget to start paying it by installment and do it immediately.  Believe it or not, trying to resolve any tax problems with the CRA can take long time. For instance, tax dispute or tax relief with the CRA can take years.

Setting up Tax Payment Plans with CRA

When the CRA processes your income tax return, it will send you a Notice of Assessment. This Notice of Assessment will show a tax balance that you owe to the CRA and it is possible that you may not be in a position to pay this amount immediately and in one lump sum. When you cannot pay the amount owed, you can get professional help by contacting a tax service office to set up a tax payment plan schedule which will be mutually acceptable to you and the CRA.

It is crucial on your part to let the CRA know about your payment problem. It’s important to work out a tax payment plan schedule as early as possible. If you fail to do so, compound interest will be charged to you on the unpaid tax balance and the interest penalty will begin from the annual filing deadline. It will continue until the full tax amount is paid.

The CRA allows taxpayers to pay their tax amounts in installments if they can prove financial hardship. These taxpayers will then be required to pay their income tax amounts in regular installments within the financial year according to a tax payment plan they will submit rather than paying a lump sum amount on 30th April. This takes place when insufficient income tax is withheld from their earnings over the course of a financial year.

Common sources of income that may cause such a situation are rental income, self-employment income, investment income, income from more than one source of employment and some pension payments.

Once a tax payment plan is negotiated, you can remember that income tax installments can be paid by sending post-dated cheques to the CRA or through the `My Payment’ service or through your financial institution.

The tax payment plan can also be worked out with the CRA as a pre-authorized payment plan. The installment payments that are pre-authorized can be debited from your bank account. This kind of a pre-authorized tax payment plan can be arranged with the assigned CRA collection agent. You can also complete the pre-authorized tax payment plan through the monthly Installment Payments and mail it to the CRA. Once a tax payment is settled with CRA, you are required to make steady payment as agreed on. Default payment, even once, may jeopardize the validity of the negotiated tax payment plan.

 

Why is it important to get professional Canadian Tax Audit Help?

When you get a letter in your mail from CRA, it is time to get yourself Canadian tax audit help. If you want to handle tax filing and face a tax audit yourself, then it could develop into a nerve racking experience for you. Income tax audits are slowly but surely becoming a certainty just like life and death in Canada, . A tax audit could be frightening but it may not become inscrutable. Success can be achieved in this madness through the right kind of advice from tax audit experts.

A tax audit could be described as a scrutiny of your tax returns. During the process of an audit, a CRA examiner will make an assessment of your tax return, line by line. If something is not found to add properly or if the return includes something which is unusual, the examiner will highlight the errors or discrepancies and will ask you to explain or justify your entries. This is why you need Canadian tax audit help.

When you seek tax audit help in Canada, you will find out that there are different kinds of tax audits. They could be office, correspondence or field audits. Canadian tax audit help will prepare you in how you can avoid such investigations. Through correspondence audit, CRA will examine and correspond through mail. This is usually for the common tax return issues like missing schedules or forms or illegible entries and calculation errors.

In a field audit, you will require tax audit help because the CRA examiner will visit your house in order to verify the information that you have submitted on your tax return for that financial period.

You will require Canadian tax audit help even during an office audit where you have to go to the office of a CRA examiner. The examiner will mostly require your tax accountant or representative to prepare and bring all the documentation such as receipts, pay stubs or account statements.

Once you receive information about a tax audit, you have a month to respond and get adequate Canadian tax audit help.  If you do not agree with the points laid out by the CRA concerning your tax returns, you may appeal their findings. This appeal will be handled by a CRA Appeals Officer and the proceedings may go on for a year or even longer.

If you have taken a client on business entertainment to a restaurant, it could become a business expense that could be justified. When you get Canadian tax audit help, you will be shown how you can maintain the relevant receipts and give out proper explanations for all audit queries.

A period of three years is set aside as a limitations’ statute on the audit of tax returns that were filed within the time limit. If you keep records properly and get professional Canadian tax audit help, you could handle whatever audit inquiries the CRA may have.

Working out a Tax Payment Plan with CRA

If you are facing a tax audit or have a huge tax debt to settle with the CRA, you need professional help to work out a tax payment plan with CRA. Some people run into financial difficulties and do not put aside sufficient money to pay the year end taxes. They should be proactive and keep themselves ready to negotiate a tax payment plan with CRA.

In a situation where you are not able to set aside the money that you need to pay your tax bills, you have to remain calm and take help to work out a tax payment plan with CRA. You can do nothing at first but wait for the notice of assessment to arrive from the CRA in your mail.

You may then seek professional help to get in touch with the collection department and suggest a tax payment plan with CRA. The professional tax consultants then aim to build up a relationship with the collection agent of the CRA while handling the process of your tax audit.

You have to be honest enough with your tax consultant and apprise him or her of your actual tax situation. You cannot promise more than what you can muster. Once you work out a tax payment plan with CRA, you have to stick by it. If you default with that plan, immediate action can be taken against you by the CRA and they can freeze your bank accounts. The idea is to be truthful in working out a tax payment plan with CRA.

When you are trying to negotiate individual or corporate taxes, it is better to come up with a tax payment plan with CRA that gets them their tax dues within a period of six months. When this is the case, you will find that the CRA collection agencies would be quite patient with you.

If you are a director of a corporation and even if you are not active in that corporation, you could be held liable for the HST trust money and the payroll taxes. You could face serious penalties if you are failing in your job as a director while not making sure that the tax money is being remitted properly. It is always safer to consult professionals so that there is a tax payment plan with CRA.

When working out a tax payment plan with CRA, you have to be sure of the installments that you fix. These installments are those periodic tax payments that you have to settle to the CRA on fixed dates to cover your tax dues that you would have otherwise paid as a lump sum amount on 30th April of the following year. Installments are never paid as an advance. They are settled throughout a calendar year in which you have earned your taxable income.

When working out a tax payment plan with CRA, you have the choice of three installment options. The first is a no-calculation option which may suit you if your income and deductions stay constant every year. The second is the `prior year’ option which may suit you if your current year’s income is similar to that of the previous year. The third is the `current year’ option which may suit you if your income and deductions are considerably different from the previous couple of years.

Filing of Corporation Income Tax Toronto

For corporations in Canada who want to claim the small business deductions when filing corporation income tax Toronto or other Canadian cities such as Calgary, Vancouver, the net tax rate effective from January 2012 has been 15%. The corporation is a popular business structure form in Canada. This is because the distinction in liability protection for  corporations offers as against a sole proprietorship concern. Canadian corporations are taxed slightly differently than the other business categories when filing the corporation income tax Toronto or other Canadian cities such as Calgary, Vancouver.

The important tax change when considering corporation income tax Toronto or other cities is that the corporation is a legal entity within its own rights and is taxed separately from individual proprietorship. There are different kinds of corporations in Canada. The type will determine whether or not a corporation can claim certain deductions and rates. An important type of corporation in Canada is the Canadian Controlled Private Corporation (CCPC). It has to be incorporated in Canada. The shares of its capital stock are not listed by class on any designated stock exchange. A public corporation is defined by getting its category of shares listed on a Canadian stock exchange which is designated as a public enterprise.

Canadian corporations have multiple methods to reduce the income tax amounts in Canada. They have to either follow some tax guidance which will help earn them some tax credits or they will have to take advantage of income corporate tax credits.

As all corporations are distinct legal entities, they have to complete and file a T2 Form every year. This is applicable to all corporations operating in Toronto or other Canadian cities even if the corporation happens to be an inactive one. The one exception to the rule is if the corporation is a registered charity enterprise.

Corporation Income Tax applies to all corporations with a T2 Short Return Form if they are a Canadian controlled private corporation through the tax period. The corporation could have a nil net income or a loss for the purpose of income tax. The corporation also should have a permanent establishment in only one territory or a provincial region. The corporation should not be claiming any refundable tax credits in addition to the refund of installments that it has paid. For a T2 Short Return Form, it is also mandatory that the corporation not receive or also pay out any taxable dividends. The corporation has to report its accounts in Canadian currency. In absence of all these conditions, a corporation has to file a regular T2 Return.

It is recommended that the Corporation Income Tax returns be prepared by experienced and professional tax experts as completion of a T2 Corporation Income Tax form will require usage of the General Index of Financial Information (GIFI) and it is more complex than the T1 Personal Income Tax Return.

Corporation Income Tax in Toronto or other cities has to be filed within half a year of the end of the fiscal year. If the year-end date for filing taxes is March 31st, it has to be filed before 30th September of that year.

Corporation Income Tax in Toronto or other Canadian peer cities can be filed electronically through an eFile and this applies to even non-resident corporations. If a corporation has any balance outstanding due on its corporate income tax, that balance has to be paid within a period of two months after the close of the tax year.

 

CRA Tax Problem Help in Toronto and Other Canadian Cities

Many people in Canada find themselves facing a tax debt that may become too big for them to handle when CRA knocks at their doors and starts giving them deadlines to work out payment plans. It is not an easy task to deal with a CRA collections officer who could be aggressive.

Seeking tax problem help in Toronto or other cities in Canada becomes an important in part of handling the CRA tax people. CRA will generally accept a payment schedule that may stretch up to a period of six months. In order to clear yourself  of a tax mess, you require professional tax problem help in Toronto or other Canadian cities because you have to understand thoroughly about the options available to you and how best you can begin to protect yourself and your business assets.

You really need some tax problem help in Toronto or other cities for there are cases when CRA will refuse to negotiate a payment plan which was thought as reasonable by you. This is where professional help and tax problem help will come in.

For any business enterprise or an individual, taxes have become one of the most difficult areas. The world has changed drastically and indifferent accounting just cannot pass. Consequently, thousands of business owners across Canada find themselves right in the middle of heavy tax problems leading to tax liabilities and they seek out tax problem help in Toronto and many other cities in Canada.

An individual facing tax problems may have reached that stage because of not being aware of the possible problems. By seeking tax problem help in Toronto or other cities, he or she could begin to avoid those problems and resolve them so that operation is possible in a tax worry free world.

People tend to ignore the communications they receive from the CRA collection centres. This is because they may be scared of the results that are linked with the kinds of tax problems they may have or that they require more time to come up with the finances to pay off their tax debts. Not taking tax problem help may result in a collection action from the CRA. If you feel that there is a tax problem, then it is advisable that you seek representation and tax problem help as early as possible.

The routine kinds of collection action that you may seek tax problem help in Toronto or many other Canadian cities could be handling demand letters from the CRA, financial disclosure requests, CRA garnishment to your wages and bank accounts that could get frozen. There may be additional action such as garnishment notices that may be sent to the financial institutions that you deal with along with liens on your property.

So, if you land into trouble when resolving a tax debt problem with the CRA, you need to seek out tax problem help in Toronto or other Canadian cities. When you seek professional tax help, you may buy time with the CRA collection practices. If your problem is pegged to coming forward with a payment schedule or a plan, you may take tax problem help.

Accessing CRA Tax Audit Help in Toronto

When you receive CRA’s audit notice, the first thing you should do is to stay calm and try to have a good assessment of the situation at hand. If you have nothing to hide and have submitted your tax returns in an impeccable manner. Chances are, you do not have a problem. Just contact the CRA auditor and present your cases yourself.

However, for most other not so fortunate taxpayers, tax audit notice is like a stressful alarm that is set off no stop. It can cause worry, fear, anxiety, sleepless nights, etc. For those people, it is better to get professional CRA tax audit help in Toronto. Besides, the CRA auditors do not just call on anyone, they must have done some home works about your tax returns before picking on you.

To find the right tax professionals with your CRA tax audit help in Toronto, you need to search for those professionals who provide tax audit solutions help with a cost effective method of preparing CRA tax audit help in Toronto your books or records for the purpose of audit. Those tax professionals need to provide in Toronto that is tax audit proof and can fend off the toughest CRA tax auditors. These professionals will help with  representing you and dealing with the tax auditor.

We integrate accounting, tax, auditing and negotiation skills and take them to an expert level in the process of CRA tax audit help in Toronto. This combination of skills and expertise can really help you to control the tax damage to the minimum. Over the years, we have done just that many times for many clients and they are gracious for our great works.

An audit is designed to interpret, summarize and  present  the complicated business and financially related issues in a style that can be easily understood and supported properly as part of  CRA tax audit help in Toronto. The audit support will involve an analysis and assessment of the supporting evidence. It also involves the development of the computerized applications to help analyze and present financial evidence. As proactive professionals, we have developed proprietary program just to make the tax audit process painless and effective.

The most important part of the tax audit works is to ensure that the challenges posed by the CRA auditors can be rebutted with hard cold factual evidence that is accepted even in court system. Many taxpayers who decided to take on the tax audit projects on their own ending up seriously defeated and suffer major damage. It has been proven again and again, an unfavorably concluded CRA tax audit costs taxpayer much more than the fees being charged by tax professionals. So work with tax professional who will do the service through a collection of documents and important reports for you so that it is helpful in assistance of drawing a favorable tax audit conclusion. Such type of CRA tax audit help in Toronto is the ultimate goal of taxpayers under audits.

 

 

How the CRA Collections System works?

How the CRA Collections System works?

Since 1st August, 2005, the Canada Revenue Agency (CRA) has been given the responsibility of the cra collections of tax debts which was previously being handles by the Human Resources and Social Development Canada (HRSDC). CRA collection has the accountability for tax debts that are due to HRSDC through student loans, employment insurance, old age security, employment programs and Canada Pension Plan.

When the tax assessment or a reassessment is not paid, the balances which are unpaid are drawn from the relevant accounting system and these balances turn into collection accounts. There is a distinct accounting system for each line of revenue. The lines of revenue are corporate tax, personal income tax, Goods and Services Tax (GST) and salary deductions by all employers.

CRA Collections Agency

CRA Collections agency has to recover the entire balance of tax debts or make arrangements through individual payment plans from defaulters to recover the tax debt within a specified period of time. Recourse to legal action is taken when the defaulters are not able to arrange the filing of their tax returns. The kind of legal actions that can apply include certification of the debt in federal courts, garnishing of wages and accounts receivables, placing a lien on the assets of the taxpayer, setting off the tax debt against other government payments and seizing the assets of the taxpayer.

CRA Collections Agency can also take the tax defaulters and debtors to court in order to collect the debt which has not been paid. The procedures used by CRA Collections agencies to collect the outstanding tax debt amounts could be a combination of both automated and manual intervention. The CRA collection procedures may involve sending computer-generated letters, making reminder telephone calls, organizing field visits by the agents and sending legal notices.

The CRA collection activities take place through the Revenue Enforcement Management Information Tracking System (REMITS). This is done through a national collection call centre in the capital city of Ottawa and at eight other locations that organize collection for personal tax and Goods & Services Tax. The mode of collection will be determined by CRA collection authorities depending on the complexity as well as the size of an account.

REMITS of CRA collections arranges letters to all the tax debtors and takes care of specified accounts for which prior arrangements have been made. The call centre of CRA collection is responsible for outbound calls principally to those tax debtors whose outstanding amounts are below a specified dollar limit. The call centre is equipped with a telephone calling system which enables it to dial out to taxpayers automatically. The national pools make these outbound calls not considering any specific geographic boundaries for both individual tax and the Goods & Services Tax below a specified dollar limit.

CRA collection pools also conduct restricted enforcement actions such as garnishing the wages or accounts receivables of the taxpayers. The Tax Service Offices handle the more complicated accounts and conduct a range of legal enforcement like the seizing of assets or placement of liens on the properties of the tax defaulters.

An Overview of a CRA Bank Freeze

Once a tax debt is established, the CRA can take legal action and certify that debt in federal courts. This will be done after several requests by phone and in writing to the taxpayer. If there is no tax payment plan proposed by the taxpayer, it will empower the CRA to attack your assets as lien against your tax debts. The seizing of your assets may begin with a CRA bank freeze.

When you open a bank account in Canada, you are asked to furnish a Social Insurance Number, confirming that you are a resident of Canada. This number is used as a database which the CRA taps into to determine the details of your bank and your accounts. The CRA also keeps this data through any cheques you may have sent to the agency towards tax payments in the past. People also sign up for reasons of tax refund deposits or social benefit payments. There are various ways that the Agency can use to find out methods of your bank details and affect a CRA bank freeze.

Once your tax arrears have been certified by the CRA, they have the full power to the funds you hold in your bank accounts. CRA sends a Third Party Requirement to Pay (RTP) letter to your assigned bank. Once the bank gets this letter, they have to surrender the money to the CRA as a requirement for the sum as indicated in the letter. Your bank account is free for you to use once the required amount is sent to the CRA by your bank and the CRA bank freeze is released.

If the balance in your bank account is less than the sum demanded in the letter, the bank has to forward the entire sum in the account as on the date it receives the RTP. All deposits made to your account after this date will be forwarded also to the CRA until the sum demanded is paid in full.

If the CRA is not aware of any other bank account of yours, that particular bank account will not be affected by the CRA bank freeze. If your bank account happens to be a joint account where another person is also operating at the same time, you still face a CRA bank freeze for that account and the bank will be forced to honour the demand as per the RTP. It is, therefore, not a good idea to have a joint cheque account in a bank for any mortgage or insurance deductions when you feel that there may be a risk of a CRA bank freeze.

The CRA is empowered to affect a CRA bank freeze only to those bank accounts that are pertaining to you. It cannot freeze the bank accounts of your spouse or any other relations. The use of a credit card that has been issued by your bank does not get affected by the CRA bank freeze because the card is actually issued on behalf of Visa, MasterCard or American Express. A bank account RTP is limited only to that bank account. In very rare cases where there is a huge amount of tax funds as default, there is a possibility that the CRA bank freeze may also spread to other credit lines of yours.

Taxpayer Relief in Canada

Taxpayer relief  was set up in Canada to allow for the National Revenue Minister to extend relief to the taxpayers from interest charges or penalties in certain situations. These kinds of situations are deemed to prevent individual or business corporations from fulfilling their tax obligations. The special conditions for qualifying for taxpayer relief are extra-ordinary circumstances, other circumstances,  or proven inability  to pay their taxes on account of financial hardship.

Taxpayer relief  will distinguish between waiving or cancelling any penalties and interest charges. Cancellation refers to an interest charge or a penalty which is assessed and the relief may be granted in part or in full by the CRA. Waiver refers to an interest amount or a penalty charge that has not been assessed yet or charged for which relief may be provided in part or in full by the CRA.

Taxpayer relief applies to an individual, employer, corporation, partnership, organisation, trust, or estate as well as to Goods & Services Tax and Harmonised Sales Tax registrant and claimant. The interest charges or the penalties may be cancelled or waived in part or in whole when a taxpayer can prove that the inability to pay is as a result of circumstances beyond his or her control.

Extraordinary circumstances that prevent a taxpayer from filing his or her tax returns may include conditions like man-made or natural disasters like a fire or a flood, civil disturbances or service disruptions. They may also be due to a serious accident or health impairment. Conditions of emotional stress may also qualify such as acute mental distress resulting after a death in the taxpayer’s immediate family. In all these conditions, taxpayer relief will apply.

Some actions by the CRA may also help qualify for a taxpayer relief. The CRA may waive or cancel interest and penalties if they result mainly from CRA actions such as a processing delay which results in taxpayers not getting informed about the tax dues within a specified reasonable time. The actions may also include errors in CRA notices which may lead the taxpayers to file returns on such incorrect notices.

The CRA will grant taxpayer relief by accepting circumstances in which the inability to pay the taxes is confirmed by the taxpayers. Collection of taxes could be suspended temporarily by the CRA as a result of an inability by the taxpayer who has lost employment and is currently going through financial hardship. In such cases, accumulated interest may be waived because of a prolonged case of the taxpayer’s inability to file tax returns due to financial hardship. The financial difficulties may arise out of necessities like food and medical expenses in the absence of a job. It may also be due to other expenses like conveyance and shelter.

Taxpayer relief  is available to all people living in Canada who have been charged interest penalties. The Relief Group does not maintain any inventory for collections and reviews each case on its submission merit without being influenced from the collections diary of the tax collector who has been assigned to a particular case.