Move east, Surrey, B.C., tax workers are being told, including to Greater Sudbury as the CRA shifts further away from face-to-face interactions and more towards the IRS style of tax hubs.
The Canada Revenue Agency (CRA) has announced on their website that there are changes coming to the RC59 Business Consent form. This form is completed by a taxpayer who has business accounts or by businesses who wish to have a representative contact the CRA on their behalf.
Without having this form signed and dated, the CRA will not speak to the representative.
These changes are expected to be law in May of 2017.
These laws apply to representatives who use the RC59, Business Consent, to get online access to their business clients’ information in Represent a Client.
- After May 15, to request online access to tax information for a business, you will need to complete the authorization request in Represent a Client. Form RC59 will no longer be used to authorize online access.
To complete an authorization request:
- Log into Represent a Client.
- From the Welcome page, select “Review and update.”
- Select “Authorization request” at the bottom of the “Manage clients” tab and follow the instructions.
- Print the signature page for your client to sign.
Scan and send the signed copy of the signature page to the CRA using Submit documents.
- When you use Represent a Client, you’ll have access to your business clients’ information in five days or less instead of the 15 days it takes today with form RC59.
You can also see which business clients have authorized you and if the authorizations expire by selecting “Businesses that have authorized this business (or RepID)” under the “Manage clients” tab.
- What if I don’t use Represent a Client?
If you still prefer your current process, you can still use form RC59 to request access to your business clients’ information by telephone or mail.
In some not-news of the day, the Federal Auditor General has found that the federal government takes months — sometimes years — to make decisions, costing Canadians time and money when it comes to resolving tax disputes.
Audits of the Canada Revenue Agency unveiled exceedingly long delays which fall short of public expectations in an era of advanced technology and instant communications. He noted that departments, like the CRA, assess the time it takes to make decisions against their own internal benchmarks, giving little heed to what the taxpayers they serve might consider a timely decision.
The Canada Revenue Agency often leaves taxpayers waiting for months after they file formal objections to their tax assessments. Appeals officers seeking help from other parts of the agency often wait a year or more.
Over the last 10 fiscal years, the inventory of outstanding cases at the CRA grew by 171%, while the number of employees dedicated to resolving them grew by only 14%, the audit found. The backlog of unresolved cases as of March 31 represented more than $18 billion in federal taxes, the audit said.
But the solution here is not necessarily to grow the public service, but rather a review of the internal policies and how the union impacts the employees ability to do their jobs might need to be reviewed and revamped.
I remember when I started working in the CRA and was “advised” that I should be working 7 accounts per day. I can tell you this, when you begin your day at 7:15, and are completed your work by 8:30 there is only so much coffee you can drink per day. I wound up holding several inventories of accounts, and assisting my teammates in order to keep busy.
Eventually, as rules loosened, I was in charger of a collections / compliance team and we were working upwards of 90 accounts per day each which made such a significant dent in the total amounts coming into collections that they disbanded the team.
Our office had to take on work from other tax offices in order to have enough work for each employee and as stay left, took on other positions outside of collections or took leaves they were not replaced. Our tax office at 50% less staff was resolving 400% more accounts…
But like everything else in life, there was a downturn, contracts up for renegotiation, people moved on (like myself) and now the Auditor General reports there are too many accounts which cannot be handled at current staffing levels.
Did you know?
You can see your installment amount in the CRA’s My Account and make your installment payments online.
Even better, you can see your installment amount online!
To see your installment amount online, you need to login to My Account, select “View mail,” and click “Instalment.” If you don’t have My Account, you can register now, I’ve hyperlinked it for you, but understand that the registration process can take weeks.
Also, I do not recommend providing the CRA with Direct Deposit information if you have a tax liability or intend on having one any time soon as they will use that bank source to clean out your bank account… I’m just saying… If I still worked there, I would too.
Back to installments…
Don’t forget: If you signed up for online mail, you may receive an email notification for your instalment reminder from the CRA!
If you fail to make your installment payments you will be penalized by the CRA, as laid out here; http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/ntrst-eng.html.
You will be charged interest if all of the following conditions apply:
- The CRA sends you an instalment reminder in 2016 that shows an amount to pay
- you must pay by instalment in 2016
- you did not make instalment payments, or you made payments that were late or you paid less than what you had to pay
The CRA charges instalment interest on all late or insufficient instalment payments.
Instalment interest is compounded daily at the prescribed interest rate.
How the CRA determines the interest?
- The CRA calculates interest on each instalment payment that you should have paid from the day it was due to your balance due date based on the payment option that results in the least amount of interest.
- The CRA calculates the interest on each instalment you paid for the year starting from the later of the date the payment was made or January 1 up to the balance due date.
Then, they determine the interest you owe by charging the difference between a. and b., if the difference is more than $25.
You may have to pay a penalty if your instalment payments are late or less than the required amount.
The CRA apply this penalty only if your instalment interest charges for 2016 are more than $1,000.
To calculate the penalty, the CRA will determine which of the following amounts is higher:
- $1,000, or
- 25% of the instalment interest that you would have had to pay if you had not made instalment payments for 2016
Then, they subtract the higher amount from your actual instalment interest charges for 2016. Finally, they divide the difference by two and the result is your penalty. Clear as mud, eh?
For 2016, John made instalment payments that were less than he should have paid. As a result, he has $2,500 of actual instalment interest charges for 2016. If John had not made any instalment payments in 2016, his instalment interest charges would have been $3,200. Since 25% of $3,200 is $800, we subtract $1,000 (the higher amount) from $2,500. The difference is $1,500. Then, we divide $1,500 by two. John’s penalty is $750.
Now the good part!
How can you reduce your instalment interest and penalties?
You can reduce or eliminate the interest charges and penalties by overpaying your next instalment payment or by paying it early. By paying early or overpaying, you will earn instalment credit interest. This credit interest is not refundable and can only be used against any interest charges on late payments for the same tax year.
How to Pay:
Choose the electronic payment method that’s right for you:
Online banking – Through your financial institution’s online banking, add the Canada Revenue Agency (CRA) as a payee and look for the “tax instalments” payment option.
Debit card – The CRA’s My Payment service lets you pay with your Visa® Debit or Interac® online debit card through participating financial institutions.
Pre-authorized debit – You can set up a tax payment in advance. You choose the bank account, the amount, and the date or dates of the transaction.
Credit card – You can use a third-party service provider that offers additional payment methods, including credit cards.
Carefully enter your social insurance number as your account number so the CRA can apply your payment to the intended account.
Stay connected with the CRA:
On Twitter – @CanRevAgency.
Subscribe to a CRA electronic mailing list.
Add their RSS feeds to your feed reader.
You can also watch their tax-related videos on YouTube.
I get lots of questions related to Credit Bureaus and items which show up well after they have been paid or which do not belong on there at all.
Having worked for Equifax many, many years ago right after I started working for the CRA and they release all the temporary staff for an 11-month period due to budget cuts, I can proudly say that Equifax makes it very easy to communicate with them regarding any such issues.
It’s all laid out on their website, but I provided a summary here:
Complete and submit a Consumer Credit Report Update Form to Equifax.
It is necessary to specify what information is incorrect or what information does not belong to you.
Equifax will verify that information afterwards as part of their investigation.
You will need to include photocopies of all necessary documents and identification to update your personal Credit Report (Ex: receipts, legal documents, 2 photocopies of pieces of valid identification, including proof of current address)
Fax the request to them at:
Fax: (514) 355-8502
Your request will be processed within 10 to 15 business days. After this period has elapsed, a confirmation letter will be sent to your mailing address.
Equifax Canada Co.
Consumer Relations Department
P.O. Box 190, Station Jean-Talon,
Montreal, Quebec H1S 2Z2
Your request will be processed within 15 to 20 business days . After this period has elapsed, a confirmation letter will be sent to your mailing address.
Equifax will verify the necessary information and mail you a confirmation.
Could it be any easier than that?!?
Knowledge First Financial urges parents to apply for BCTESG
1 in 5 BC children have received the $1,200 education grant
Approximately 80% of eligible children have yet to receive the $1,200 British Columbia Education Savings Grant. Knowledge First Financial, a Canadian RESP Provider, is urging parents to apply now and enjoy all the benefits of an RESP including compound, tax-free growth and the Canada Education Savings Grant (CESG) of up to $7,200. That means up to $8,400 of ‘free’ money for each child to help pay for post-secondary education for BC parents.
More than ever, post-secondary students have more freedom to choose programs and schools, more time to focus on studies and explore new opportunities, less stress and less debt thanks to the savings accrued from RESPs. Knowledge First Financial supports students in their post-secondary studies – in fact, when the BCTESG was introduced in 2015, Knowledge First Financial was one of the first RESP providers to support it.
If you’re the parent of a child born in BC in 2006 or later, here are three things to know about BCTESG:
What is BCTESG?
The British Columbia Training and Education Savings Grant is a $1,200 grant for post-secondary education established in 2015. To be eligible, parents or guardians and children must be residents of BC, and possess a Social Insurance Number.
How do I apply?
Firstly, you will need a RESP from a provider who can access the BCTESG – a sales representative from Knowledge Financial First can help set this up for you. You will be asked for proof of residency, such as a driver’s license, BCID card, BC Service Cards or a recent utility bill upon application.
When do I apply?
You can apply for BCTESG as soon as your child turns six up until the day before your child’s ninth birthday, however Knowledge First Financial recommends that parents apply as soon as possible. Deadlines for children born before August 15, 2009 are slightly different:
- Children born in 2006: Apply between August 15, 2016 and August 14, 2019
- Children born in 2007, 2008, before August 15, 2009: Apply between August 15, 2015 and August 14, 2018
Why apply now?
You’ll receive the education grants sooner and your savings will have more time to grow. Learn more about why an RESP is a smart way to invest in a child’s future by setting up an appointment with a Knowledge First Financial sales representative today.
About Knowledge First Financial Inc.
Knowledge First Financial Inc. is a wholly owned subsidiary of the Knowledge First Foundation and is the investment fund manager, administrator and distributor of the education savings plans offered by Knowledge First Foundation. For more information about education savings plans from Knowledge First Financial Inc., please visit knowledgefirstfinancial.ca or refer to our prospectus.
As of April 30, 2016, Knowledge First Financial manages $3.62 billion in assets on behalf of more than 250,000 customers.
Knowledge First Financial® is a registered trademark of Knowledge First Financial Inc.
This post was written by Daryl Shriver, and he can be found through his Twitter account.
What is a W8BEN?
The W8BEN, or Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) is a form which, when completed, is provided to the US income provider (Not the IRS!) in order to prevent 30% of your earnings being withheld and remitted to the IRS.
The W8BEN claims the treaty rate between Canada and the US which means you cannot be taxed by both countries on the same income, and by completing this form, you are certifying the following information to the IRS;
- I am the individual that is the beneficial owner (or am authorized to sign for the individual that is the beneficial owner) of all the income to which this form relates or am using this form to document myself as an individual that is an owner or account holder of a foreign financial institution,
- The person named on line 1 of this form is not a U.S. person
- The income to which this form relates is:
- (a) not effectively connected with the conduct of a trade or business in the United States,
- (b) effectively connected but is not subject to tax under an applicable income tax treaty, or
- (c) the partner’s share of a partnership’s effectively connected income,
- The person named on line 1 of this form is a resident of the treaty country (in this case, Canada) listed on line 9 of the form (if any) within the meaning of the income tax treaty between the United States and that country, and
- For broker transactions or barter exchanges, the beneficial owner is an exempt foreign person as defined in the instructions. Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income of which I am the beneficial owner or any withholding agent that can disburse or make payments of the income of which I am the beneficial owner.
- I agree that I will submit a new form within 30 days if any certification made on this form becomes incorrect (changes).
In a nutshell, you’re telling the IRS, you are NOT a US person, that you do not work in the US and that you will report your income to the CRA.
Otherwise, they keep 30% of it.