The Canada Revenue Agency has announced to tax preparers and representatives that if they wish to have online access to a business client’s tax information after May 15, 2017 they will have to complete the authorization request in the Represent a Client section on the CRA web site.
In order to do this, tax representatives have to log into Represent a Client and select “Review and update” from the Welcome page. They then select “Authorization request” at the bottom of the “Manage clients” tab and follow the instructions.
Once the request is complete, tax representatives will need to print the signature page for their client to sign. Once it is signed, a scanned copy of the document may be sent to the CRA using its submit documents feature.
Using this method will allow tax professionals to gain access to their business clients’ information in five days or less instead of the 15 days it currently takes with form RC59.
If, however, you still prefer your current process, you can still use form RC59 to request access to your business clients’ information by telephone or mail.
And if you need to have authorization in less that 5 days, you should reach out to us here at inTAXicating, because with almost 11-years’ experience working in the CRA’s Collections department, we know how to get that authorization in the hands of someone in minutes!
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Happy Canada Day, Canada. You don’t look a day over 150-years-old!
There are so many things to be thankful of this Canada Day, beginning with Tim Horton’s and hockey and ending with socialized medicine and peace. But in between there is a whole lot of taxation. Taxes you pay which go to build new arenas, which pay for medicine, which support the troops who keep us safe, and fund programs which integrates youth of all backgrounds, races, religions and income levels together in order to keep violence as low as possible.
These are the taxes we cannot avoid paying – unless we stop spending – and they are the consumption taxes (GST/HST), gas tax, liquor tax, and many more, and there are taxes on wealth, like personal income tax, as well as Corporate taxes. There are also payroll taxes and any other fee, levy or revenue tool (all taxes but given a different name).
For the most part, these taxes are unavoidable, and as Canadians we pay them knowing that money goes back into the economy and helps people.
What I do not understand, however, is why people pay more taxes than they are required to pay, or can afford to pay, and these taxes are viewed by people in the Canada Revenue Agency (CRA) as a “stupid” or “lazy” tax and what they are referring to are penalties and interest.
It is my belief that no one should pay any penalties or interest. Ever. Why give the CRA more money than they are seeking through the Income Tax Act or the Excise Tax Act.
If you work with an accountant or tax preparer, there should be no reason for late filings or late remittances, or for missing out on key deductions because that representative should know you, and the industry you work in, and be able to keep you current and free of penalties and interest.
But there are many legitimate reasons why people file late, and incur penalties and watch interest accrue on their tax accounts, and these people are then hammered by the CRA and need help, which is why I created inTAXicating. My goal here is to help you get out of the troubles that you have gotten into and by help, I mean rehabilitate you and get you current on your filings, help you reduce your balance owing, apply for taxpayer relief (fairness) if it applies to you, and get you on a remitting and reporting schedule which ensures you are never late again.
Too many firms out there have watered down the “Tax Solution” process to the point where you pay them a ton of money, they “fix” your issue and then another one pops up, all because they are experts in taking money and not experts in resolving CRA debt issues.
The best part about working with inTAXicating is having the expertise where you need it. If your problem is with collections or enforcement then you need the person who worked in that area, and trained and managed the collectors and who can tell you the CRA’s next move before they can.
Being audited? Recently assessed? Don’t understand a letter? Balance looks too high?
There is no tax situation too scary, or too difficult to figure out. Business taxes, personal taxes, GST/HST, payroll, T2’s, provincial, federal, liens, RTP’s, appeals, VDP… We’ve seen it all, handled it all, and have been successful with it all.
Just because it’s July 1st and summertime doesn’t mean the CRA stops working too. In fact, it’s the opposite. With more time on their hands, the CRA’s collections staff have the time to thoroughly research tax files which have balances on them to see what they can do to ge the account paid in full.
My experience working in the CRA for almost 11-years, tells me that the majority of in depth investigations occurs during the summer months.
Make summertime the best time to resolve that nagging tax problem.
If you have a tax problem, we have a tax solution.
Or email us: firstname.lastname@example.org
What are you waiting for?
Recent radio advertising and newspaper or online articles would have you believe that the CRA has been ramping up staff in order to break down your door in the middle of the night and arrest you for tax fraud.
Deep down inside you knew that you should have opened a BN number and GST/HST account for your child\s lemonade stand because even though they were significantly under the $30,000 sales threshold, if registered, you could have claimed the Input Tax Credits – but you didn’t and the CRA wants their money!
You also know that if you had a question, the CRA call centre were going to mislead you, or lie to you so that you would be forced to pay even more money.
You also know that you might need help for a tax accountant, tax lawyer, tax broker, tax solutions firm, or tax audit specialist… but you cannot choose because the different names must mean they do different things and you don’t know which category you fall into, and … the CRA are so coming to get you… now!
(Is that rustling in the bushes in front of my house?)
Well all of these new powers and the threats that they are going to break-down your door and arrest you on the spot are not really true.
You only have to fear the CRA breaking down your door (really the RCMP, but I’m sure the CRA would be there somewhere along the way) if you have done something wrong. Very wrong. Criminally wrong.
You should be concerned if the CRA knows you’ve done something criminally wrong, or have been involved in terrorist financing or activity because they’ll pass that along to the police.
The Canada Revenue Agency gained the little-noticed new authority, which does not require a judicial warrant, through an amendment tucked into the government’s most recent budget bill.
Previously, confidentiality provisions in the law prevented the CRA from handing information about suspected wrongdoing, on its own initiative, to law enforcement.
The exception was information that pointed to tax-related crimes.
The new provisions apply to offences including breaking and entering, vehicle theft, arson, corruption and kidnapping and in return, the CRA can now receive information from local authorities about any offence with a minimum prison term, or one with a maximum sentence of 14 years.
The list of offences is broad and is a significant shift in confidentiality policy allowing the CRA to pass along information to law authorities without a court-ordered warrant, even when the alleged crime(s) have nothing to do with taxes.
Interim procedures for administering the new powers were issued to all CRA employees in June 2016 not too long after the legislation received royal assent.
The intended use of this new tool, is that an exchange should occur when an employee gathers information in the course of their regular duties.
This information exchange was intended to be one-way and would be closely controlled through a set of strict criteria.
As an aside, it would have been nice to know who might be carrying on criminal activity, when I was working at the CRA and went to visit a business to determine why they stopped filing GST returns, only to learn that they were conducting illegal activities and was physically threatened before getting the heck out of there.
The following day the RCMP showed up, cleaned out the place and arrested the operators.
I never did get my outstanding GST returns, however, which could have been prosecuted as a criminal offense (but was not).
All potential referrals to police will be vetted by the agency’s criminal investigations personnel and must be approved by the assistant commissioner of the department’s compliance programs branch, CRA has reported.
The key points to remember are this;
- If you happen to have partaken in a criminal activity, you might not want to disclose that to the CRA collector.
- Make sure to stay compliant! File up to date and don’t give the CRA reasons for looking for stuff.
- Take all of the tax-related advertising with a grain of salt. Their intention is to scare you and force you to drop a ton of cash at their business. Instead, I recommend you do your research, ask questions and get the solution that fits your tax problem.
- If you’re not sure… Ask. Then use your judgement.
June 9, 2017 is Tax Freedom Day!
What is Tax Freedom Day?
Does it really exist?
What might it mean to me?
In their annual report, the Fraser Institute, a Vancouver-based think-tank added up all forms of taxation — from income and sales taxes, to more hidden costs such as gasoline taxes, carbon taxes, tobacco and alcohol taxes, municipal property taxes, payroll taxes and even CPP and EI premiums — to come up with a figure for the overall tax burden for Canadian families, and this year, they have determined that the average Canadian family with two or more people will earn $108,674 and pay 43.4% in taxes.
Based on the Fraser Institute math, 100% of income earned thus far in 2017 has been gobbled up by government in taxes, and only now are you working for yourself until the end of the year.
Last year, in 2016, it came a day earlier, on June 8th and because of variances in all types of taxes in different provinces, Tax Freedom Day differs across the country, ranging from May 21st in Alberta to June 25th in Newfoundland and Labrador.
One of the reasons for the extra day is to account for the fact that Canadians’ tax bill has risen, on average, by $1,126 this year, according to the Fraser Institute. Of that increase, $542, came from higher income taxes, but sales taxes (up $311) and other energy-related taxes (up $204) also took a bigger bite while liquor, tobacco, amusement, and other excise taxes, payroll and health taxes, and import duties all decreased.
The Ottawa-based Broadbent Institute, however, disputes the math behind the annual Fraser Institute report, because the Fraser Institutes uses “average” tax rates instead of median tax rates.
To come up with its “average” tax rates, the Fraser Institute simply adds up the amount of cash income earned by a taxpayer, and then divides that by the number of people. It then takes “outliers” and excludes those extremes from the calculations.
The Broadbent Institute said that skews the numbers in a certain way, and a better way than the average would be to use the median — the exact mid-point between the top and bottom and the rationale behind this surrounds the fact that the average income of Canada will always be higher than the median because of the small number of very high-income earners in Canada, which skews the average income amount higher.
Adding up only federal and provincial income taxes, the “average” Canadian in prime working years (between 25 – 54 years of age) earned $62,600 last year, and paid $12,000 in taxes, or around 19%, according to tax filings. Using the Broadbent method of calculation, the median for that group earned $50,500 last year and paid $7,000, or 14%, in income taxes.
Another main difference is that the figures used by Fraser Institute report doesn’t just include income taxes. It tabulates all sorts of fees that taxpayers don’t directly pay, such as payroll taxes and resource royalties that companies pay when they extract things like oil, minerals and timber.
It also only considers what it calls “cash income” on the other side of the ledger. That excludes employee benefits, investment income from pension plans and other forms of cash income.
The Fraser report also takes into consideration indirect costs like payroll taxes and other taxes which businesses pay in their calculations because even though businesses pay these taxes directly, the cost of business taxation is passed on to Canadians.
So now that we’re working for ourselves, let’s push all levels of government to treat our tax dollars more wisely, and let’s earn as much as possible (while continuing to pay our taxes on time!)
A couple of months ago, I received a call from a senior law partner at one of Toronto’s top law firms asking me if I could help out a client of theirs with a messy tax problem because their firm was just too expensive for the couple.
I was told there was a balance owing to the CRA for GST/HST, and that the firm was essentially bankrupt, they feel they don’t owe the money and the CRA was threatening to raise a Deemed Trust followed by a s.160 assessment.
All over $30,000 owing to the CRA.
Sounds simple enough…
Confirm the amounts, then figure out if the balance is actually owing, tie up loose ends then make arrangements between the client and the CRA to resolve both matters.
I connected with the couple, got their side of the story, then met their wonderful accountant and got her side of the story. I took all of that information, and had a nice long chat with the Collector at the CRA.
Here is the CRA’s side;
The couple owned a business, which accumulated debt through the filing of GST/HST but never paying it. They also failed to file T2 returns.
The company had at one point in time sought financing and ended up pledging their inventory in return. When the business began to slow down, the lender took the assets, and sold them to pay back the money they had lent to the business.
There was a shortfall.
The CRA did not like this at all.
With money owing to the CRA, they used their Deemed Trust provision and raised a s.160 non-arms length assessment against the lender for taking the inventory and disposing of it without paying the CRA.
The CRA were just waiting for the corporations director to file for bankruptcy before they actioned the s.160 because that would survive the bankruptcy and would result in the CRA getting paid on all fronts.
But logic sold me that a business which was struggling would not have significant amounts of GST/HST owing in its final years.
Something did not seem right.
I called back the CRA Collections office who, quite frankly, was extremely unhappy about having to answer additional questions about the origin of the debts… Again.
I had asked her to go through the last 3-years worth of filed GST/HST returns and give me verbal figures for Total Sales, GST Collected, and Input Tax Credits.
She started. The first year was fine.
The second year was fine.
The third year, she started, “Total Sales were $25,000”, “GST Collected was $1,500” and ITC’s were …
… she paused…
“No ITC’s, eh?” was my response.
“No. No ITC’s”, she said, completely puzzled.
“So I don’t expect there to be any ITC’s on any of the returns going forward, is that accurate?” I asked.
“No ITC’s on any of the returns going forward… That’s so unusual”, was her response.
We re-filed the last 6 GST/HST returns to include the ITC’s. They went through a desk audit quickly because of the notes indicating someone missed ITC’s, and upon posting knocked down the balance owing considerably.
The s.160 assessment was cancelled and the remaining, much smaller balance was paid in full.
I introduced them to one of the fantastic accountants in my network who quickly completed the T2’s for them.
Everyone left happy.
That’s how we help! Knowing the ins and outs of the CRA’s collections department and even think that something might have posted incorrectly, 4-years ago.
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?!?