For many individual taxpayers and small business enterprise owners in Canada, it is prudent to be prepared to deal with the CRA concerning tax disputes. Tax problems Canada are not easily manageable. You have to depend on professional tax help. Knowing a little basics of the process of tax disputes in Canada will help you understand your rights better when you have to deal with the CRA.
The tax system in Canada is based on self-reporting. It means that every Canadian taxpayer carries the obligation to report the tax amount accurately each financial year. This is the main rationale behind the filing of the tax return on an annual basis. The CRA will process the tax returns and decide on whether it agrees or disagrees with the information that has been reported by the taxpayers. It will then provide the taxpayers with a Notice of Assessment. With the receipt of this notice, tax problems Canada will start to surface.
Disputes may take various shapes after you receive the Notice of Assessment from the CRA. It may ask for more information and audit the taxpayers to get more data concerning their tax obligations. An audit could be focused or narrowed down on micro issues or it may be a comprehensive one that reviews information about every aspect of personal finances or business transactions.
Tax problems Canada are not over with the completion of a tax audit. The CRA may decide that the tax return was accurate to begin with and it may agree with whatever that was reported on the individual tax returns. Conversely, it may disagree with whatever was reported on the tax returns. When the CRA disagrees with the taxpayers, the auditor will get a proposal letter issued outlining the position of the CRA on how it proposes to reassess the taxpayers. The current procedure is to give a thirty-day period for the taxpayers to make further submissions to the CRA auditor with respect to the proposal letter, compounding the tax problems Canada. If professional tax help is sought, the consultants will help the taxpayers in facing these tax problems Canada and they will even be able to represent their clients throughout the process of the tax audit by the CRA to make sure that the taxpayers are being treated fairly by the CRA auditor.
When the Notice of Reassessment is received by the taxpayers, it will inform them of the amount of tax that is due from them as a result of that reassessment. The date that is stamped on the Notice of Reassessment is important and it has to be noted down carefully. This is the beginning of the ninety-day appeal period. This letter contains all the information which is required by the taxpayers should they want to dispute the amount of the involved tax along with penalties and interest charges.
If there is something that the taxpayers want to dispute about, tax problems Canada continue and they have to take shape in the form of a Notice of Objection on their part. This objection notice has to be filed with the Chief of Appeals of the CRA. This has to be filed before the ninety day period from the date of the Notice of Reassessment expires.