Canada Revenue Agency (CRA) Voluntary Disclosure Program (VDP) Changes March 1st, 2018.

The Canada Revenue Agency (CRA) have announced that effective March 1, 2018, changes will be made to the Voluntary Disclosures Program to narrow its eligibility criteria.

What is the Voluntary Disclosure Program (VDP)?

The VDP provides Canadians a second chance to change a tax return which has been previously filed with the Canada Revenue Agency (CRA), OR to file a return(s) which you should have filed with the CRA.

Your application under the VDP – if approved – allows you to file or amend a return without the CRA prosecuting you, or assessing penalties.

Who Can Apply?

Taxpayers!

Taxpayers can be;
• Individuals
• Employers
• Corporations
• Partnerships
• Trusts
• GST/HST registrant / claimants
• Registered exporter of softwood lumber products

You can apply, or you can have an authorized representative – like an accountant, or tax professional like inTAXicating, submit the application on your behalf.

How Many Times Can You Apply?

The CRA would prefer you use VDP once and stay up-to-date on filings from that point onwards, however should circumstances warrant it, you can apply again.

Conditions of a Valid Application

To qualify for relief, the application must:
• Be voluntary – You come to the CRA before the CRA gets to you.
• Be complete – You cannot file for one year, for example, you have to file everything and disclose everything.
• Penalty: Involve the application or potential application of a penalty and, for GST/HST applications, the application or potential application of a penalty or interest
• Time: Include information that is at least one year past due for income tax applications and, for GST/HST applications, at least one reporting period past due; and
• Include payment of the estimated tax owing.

The Process

Submit an application to the CRA, and if the CRA approves it, the returns in question are filed or amended and there is no penalties or fear of prosecution (unless you are engaged in criminal activities).

The CRA then expects you to pay the balance owing – or make arrangements to pay – because while there is no penalties, there is still interest accruing on the account.

* The above information applies until February 28, 2018.

The CRA will update their VDP guidelines as of March 1, 2018, so in order to be considered under the existing VDP, the CRA must receive your application, including your name, on or before February 28, 2018.

What Changes March 1st, 2018? 

On March 1, 2018, when the new VDP comes into effect, it narrows the eligibility criteria to access the Program and imposes additional conditions on applicants, making it more difficult for those who intentionally avoid their tax obligations to benefit from the VDP.

Income Tax Disclosures

With the changes to the program, two tracks will be created for income tax disclosures:

1. Limited Program

The Limited Program provides limited relief for applications that disclose non-compliance where the facts suggest that there is an element of intentional conduct on the part of the taxpayer or a closely related party.

Under the Limited Program, taxpayers will not be referred for criminal prosecution with respect to the disclosure and will not be charged gross negligence penalties, however, they will be charged other penalties and interest as applicable.

2. General Program

Under the General Program, taxpayers will not be charged penalties and will not be referred for criminal prosecution related to the information being disclosed. The CRA will provide partial interest relief for years preceding the three most recent years of returns required to be filed.

GST/HST, excise tax, excise duty, softwood lumber products export charge and air travellers security charge disclosures

For GST/HST, excise tax, excise duty, softwood lumber products export charge and air travellers security charge disclosures, three categories will be created:

1. Wash Transactions

Wash transactions are generally transactions where a supplier has failed to charge and collect GST/HST from a registrant entitled to a full input tax credit. This category provides relief only for applications involving GST/HST “wash transactions” that are eligible for a reduction of penalty and interest under the policy set out in GST/HST Memorandum 16.3.1, Reduction of Penalty and Interest in Wash Transaction Situations.

Registrants will not be charged penalties nor interest and will not be referred for criminal prosecution related to the information being disclosed.

A registrant must now disclose information on any non-compliance during the four years before the application is filed.

2. Limited Program

This category provides limited relief for applications that disclose non-compliance where the facts suggest that there is an element of intentional conduct on the part of the registrant or a closely related party.

Under the Limited Program, registrants will not be referred for criminal prosecution with respect to the disclosure and will not be charged a gross negligence penalty, however, they will be charged other penalties and interest as applicable.

3. General Program

All of cases fall under the General Program where registrants will not be charged penalties and will not be referred for criminal prosecution related to the information being disclosed.

The CRA will provide partial interest relief and a registrant must now disclose information on any non-compliance during the four years before the application is filed.

How to Determine if a Disclosure Falls under the General or Limited Program?

For both income tax and GST/HST disclosures, the determination of whether an application should be processed under the General or Limited Program will be made on a case-by-case basis and in doing so, the CRA may consider a number of factors, including but not limited to:
• The dollar amounts involved;
• The number of years of non-compliance; and
• The sophistication of the taxpayer/registrant.

Other Significant Changes to the VDP

1. Payment

Payment of estimated taxes owing: Payment of the estimated taxes owing will be required as a condition to qualify for the program (When a taxpayer does not have the ability to make payment at the time of filing the VDP application, they may request to be considered for a payment arrangement.)

2. Anonymous Disclosures Eliminated

The “no-names” disclosure method has been eliminated and replaced by a new pre-disclosure discussion service.

The process for taxpayers and authorized representatives to make disclosures on a no-names basis has been eliminated. Under the new “pre-disclosure discussion” service, taxpayers or their authorized representatives can have a conversation with a CRA official on an anonymous basis, but that discussion does not constitute acceptance into the VDP.

3. Large Corporations

Generally, applications by corporations with gross revenue in excess of $250 million in at least two of their last five taxation years, and any related entities, will be considered under the Limited Program.

4. Transfer-Pricing

Due to the complexity of transfer pricing issues, applications will now be referred to a specialized Transfer Pricing Review Committee, which will review the applications instead of the VDP.

For efficiency, taxpayers may send their applications directly to this committee.

5. Review by Specialists

Applications involving complex issues or large dollar amounts will be reviewed for completeness by the relevant specialist from the program area prior to being accepted.

6. Disclosure of Advisors

The name of the advisor who assisted with the non-compliance should now be included in the application.

7. Cancellation of Previous Relief

The new VDP regulations provide the CRA with the ability to cancel relief which was previous provided to a taxpayer if it is subsequently discovered that a taxpayer’s application was not complete due to a misrepresentation.

8. Mandatory Waiver of Rights of Objection and Appeal

Under the Limited Program, participants will have to sign a waiver of their right to object and appeal in relation to the specific issue disclosed.

 

If you need assistance with a Voluntary Disclosure – at any time – we can help!

Email: info@intaxicating.ca

On the phone: 416.833.1581 (If you are outside of Toronto, and would like to speak to us live, please email us, and we will gladly call you at your convenience)

On our website: http://www.intaxicating.ca (Portal coming soon – currently under construction).

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Statute of Limitations for Tax Debt: Canada

Statute of Limitations for CRA Debts – Truth vs Myth

There is a common belief that there is a statute of limitations on tax debts and that taxpayers can ride out these periods and ultimately pay no taxes.  Google it, and you will see all kinds of information out there, but it’s the Canada Revenue Agencies information which matters the most.

A Collections Limitation Period (CLP) is the time in which the Canada Revenue Agency (CRA) can begin actions to collect a tax debt.

Myth: After the CRA issues a notice of assessment, it has either 6 years or 10 years to collect the debt. If you don’t pay what you owe within that time, the CRA can no longer collect the debt.

Fact: Each tax debt has a 6 or 10 year collections limitation period (depending on the tax) and the limitation period can be restarted or extended by the CRA when certain events occur.  At that point, the total amount of time that the CRA has to collect the debt will be longer than 6 or 10 years.

Even after the collections limitation period ends, you can still have a tax debt and interest will continue to accrue until the tax debt is paid in full.

 

Start of the collections limitation period

The limitation period starts on the date that a notice of assessment or reassessment is sent, or 90 days after that date, depending on the type of tax debt.

 

Types of tax debt

The collections limitation period start date and duration will be different depending on the type of tax debt. Some tax debts are subject to collections restrictions, while others are not.

The following are some of the most common types of tax debt:

 

Individual (T1)

The Collections Limitation Period (CLP) starts on the 91st day after the CRA issues the notice of assessment – unless there is an objection filed.  There is a 10-year CLP on T1 debts which can be re-started and extended by the CRA.

 

Corporate (T2)

The CLP starts on the 91st day after a notice of assessment or reassessment is sent unless a NOA or appeal has been filed.  The 10-year CLP applies, however the CLP can be restarted and extended.

 

Large Corporations (as defined by the Income Tax Act)

The CLP starts on the 91st day after a NOA or reassessment is sent.   The 10-year CLP applies, however, the CLP can be restarted and extended.

This type of tax debt is subject to a 90-day collection restriction for the period after a notice of assessment or reassessment is sent, however, the CRA can act to collect 50% of the amount owing by a large corporation as soon as a notice of assessment or reassessment is sent.  The CRA can start collection action on the 91st day for the remaining 50% of the amounts owed by a large corporation, unless a notice of objection or appeal is filed.

 

Payroll (T4) Deductions

The CLP starts the day after the Notice of Assessment is sent.  There is a 6-year collections limitation period, however this CLP can be restarted and extended at any time.

NOTE: There is no collections restriction on Trust funds, so the CRA can begin collections actions the day after a Notice of Assessment has been sent.

NOTE: If a Notice of Objection or an appeal has been filed, the CRA can continue to collect the debt(s)

 

GST/HST

The Collections Limitation Period starts the day after the Notice of Assessment is sent and while the 10-year CLP applies, it can be re-started and extended at any time.

NOTE: Additionally, since GST/HST are also Trust Funds (funds held in trust for the Crown), there is no collection restriction once the Notice of Assessment has been sent.

NOTE: If a Notice of Objection or appeal is filed, the CRA can continue to collect the debt(s).

 

Collection Restriction Period

For tax debts subject to collection restrictions, the CRA cannot start collection action:

  • during the 90 days after a notice of assessment or reassessment is sent
  • during the time that you dispute your debt by filing a notice of objection or appeal

However, if the CRA determines that it might not be able to collect a tax debt because of collection restrictions, it can apply to the Federal Court (Canada) for a jeopardy order.  If granted, this order will let the CRA take collection action immediately.

 

Restart of the collections limitation period

The limitation period is restarted when either you or the CRA takes certain actions. Tax debts subject to the 6-year limitation period are restarted for another 6 years and tax debts subject to the 10-year limitation are restarted for another 10 years.

The following are examples of actions that will restart the collections limitation period. This is not a complete list.

 

Actions you initiate

The collections limitation period will restart when you:

  • Make a voluntary payment
  • Write a letter to the CRA proposing a payment arrangement
  • Offer to provide security instead of paying the amount owed
  • Make a written request for a reassessment of an amount assessed
  • File a notice of objection with the CRA
  • File an appeal with the Tax Court of Canada
  • Ask the CRA if you can make pre-authorized debt payments

 

Actions the CRA initiates

The CRA takes various actions to collect tax debts when taxpayers don’t make voluntary payments.

The collections limitation period will restart when the CRA:

  • Issues a garnishment or statutory set-off to collect an outstanding tax debt when you don’t make voluntary payments
  • Applies a refundable credit to your tax debt and notifies you by sending a letter or Statement Of Account
  • Issues a NOA or reassessment against a third party for amounts you owe
  • Certifies your tax debt in the Federal Court of Canada
  • Initiates seizure and sale action to collect your outstanding tax debt

 

Extension of the collections limitation period

The events listed below can extend the collections limitation period. When this happens, the clock stops running on the date that an event begins and it will not run during the event.

This has the effect of stalling the collections limitation period.

When the event is completed, the collections limitation period resumes where it left off.

Other events can then restart the limitation period.  It will end when the 6‑year or 10-year limit has been reached, even if it took more years than that to reach that limit if you include the stalled time.

The following events can extend the collections limitation period:

  • You file an assignment (bankruptcy or proposal) under the BIA, CCAA or FDMA.
  • The CRA accepts security instead of payment of a tax debt.
  • You become a non-resident of Canada after the CRA issues a NOA or reassessment.
  • The CRA postpones collection action without accepting security for an objected or appealed GST/HST debt. This applies only to GST/HST tax debts assessed under the Excise Tax Act.
  • You file a Notice of Objection with the CRA. This will extend the limitation period only for tax debts subject to collection restrictions.
  • You file an appeal with the Tax Court of Canada. This will extend the limitation period only for tax debts subject to collection restrictions.

 

NOTE: Filing a Notice of Objection with the CRA or an appeal with the Tax Court of Canada will restart the collections limitation period for all types of tax debts because both of these actions are considered acknowledgments of debt.

Similarly, if your tax debt is subject to collection restrictions, filing an objection or appeal will extend the collections limitation period.

 

End of the collections limitation period

Once the period ends, the CRA cannot take any further action to collect the debt, however, the tax debt still exists and you can make voluntary payments.  Voluntary payments you make after the limitation period ends will not restart it.

Why inTAXicating Tax Posts Rank Higher than the CRA?

Anyone else get a lot of SEO Spam?

SEO, in case you were not aware is the acronym for Search Engine Optimization, and is a marketing technique which focuses on growing the visibility of your web-site through non-paid search engine results.

To get a higher ranking website, you need a combination of good content and your site has to hit the right keywords.  Doing this will drive traffic to the website, and all of this helps the search engines know that your site needs to be shown to people searching for whatever you have written about.

It stands to reason then, that just because you created a web-site (or blog) it doesn’t mean that anyone will see it or read it.  The site has to be “indexed”, meaning that it needs to show up in search engines, and it gets indexed by having people show up and visit the site.

The more visitors, the higher the ranking.

What does SEO spam have to do with inTAXicating and the CRA?

Quite a lot, actually.

In and amongst the spam we get on our website, the majority of pitches are from SEO companies who promise to help me get this website on the “first page of Google”.

Now, I know that a lot of these inquiries are spam because they are fraudulent – trying to steal identities and money – however there are some real companies who reach out to help me improve my site’s ranking, and to those companies – and to ANY company who is going to take the time to make a pitch any company, I offer this advice.

At the very least, before you reach out, you really need to check to see that you are offering a service which they actually need?

You see, there are many inTAXicating blog posts which already come up on the first page of Google.  Some, in fact, come up first or second.  Many even come up before the Canada Revenue Agency!

So thank you for the offer to get me on the first page of Google searches.  If I was even going to consider using your services at any point in time, and you have not taken the time to see that, what less obvious things have you missed?

Business fail because they do not take the time to check their prospective client(s) out and they end up making a pitch which shows there is no attention to detail being paid.

In the meantime, if our blog posts are ranking higher on Google – and we do not promote, or pay for any ads – then you know where a large number of Canadians are going to find answers for their tax problems and to find resources to help them in their dealings with the CRA.

Even the CRA sometimes contacts us for feedback regarding the way they have written something to see if our understanding represents the message that the CRA is trying to get across.

If you, or anyone you know has a tax issue with the Canada Revenue Agency, then they need to contact us, at inTAXicating Tax Services.  We rank higher than the CRA on CRA tax matters for a reason.

Email us here: info@intaxicating.ca

 

Tax Shelter Debt with the CRA? Come TONIGHT to a Meeting in Toronto

Have you participated in a Canadian Tax Shelter?

Do you owe the CRA money?

Have the promoters of the shelter taken your money and run away?

If any of these situations sound like a dilemma you are in, or going to be in, then you have a bit of time to do something about it.

The Tax Shelters they will be discussing tonight are; COIP, RLG, MLF and PGI.

If you have participated in any other tax shelter, such as GLGI, and you wish to speak with me regarding your options, please understand that the event will focus on the above 4, however, I will have time set aside after to speak with participants regarding them.

TONIGHT:

Tonight, November 21st, 2017 is your last chance this year to come and meet with tax shelter and CRA experts on the subject of their Class Defence.

Profitable Giving Canada, the leading Canadian Tax Shelter Solution provider, are especially pleased to have Mr Shy Kurtz,  LLB, BCL, the Chairman of their Legal Affairs Committee as special guest to answer questions and give an update on their Class Defence.

Don’t miss out on this important opportunity to find out how to deal with the CRA reassessments and collections.   It’s your last opportunity for quite some time to speak directly to the experts.

If you have not yet joined their Class Defence,  it is even more critical to attend.  They want to hear from you and you need our help, trust me! 
Event details:

Tuesday, November 21, 2017
7:00 PM-9:00 PM
Hampton Inn & Suites,
Register Now
If you simply cannot attend one of their 2017 final seminars,  they would be pleased to offer you a  private telephone consultation at your convenience.  Or just call them at 519 -964 – 2780

The seminar will be hosted by Mr. Jaye Torley, the President of Profitable Giving Canada.

I will be there too to answer questions on the CRA’s Collections process.

IF you wish to speak to PGC, here is their contact info:

Insolvent or in Tax Trouble? Don’t Let the CRA Decide. You Decide!

Are you Insolvent or do you just have Tax Troubles?

Don’t let the CRA decide this for you… They want you to do what is easiest for them!  You need to do what is best for you!

In my experiences which included almost 11-years working in the Canada Revenue Agency (CRA), you should never allow the CRA to decide whether you can fix your tax problems or whether you should go bankrupt.

From the stand-point of a CRA Collections officer, going bankrupt is great because it removes the account from their inventory of accounts to collect / resolve.

Your file disappears from their inventory and re-appears in the CRA’s Insolvency Unit inventory.

From the perspective of the Collections Department, it’s case closed!

 

There are 3 ways a CRA Collections Office resolves one of their accounts;

1) Collect it / fix the compliance issue(s)

2) Write it off because they cannot collect it

3) Move the account to the Insolvency unit

 

Go Bankrupt!

The CRA’s Collections Officers are not allowed to tell you to go bankrupt. In fact, they are taught in their training that they are not allowed to do that, and that sentiment is reinforced at all future training they attend.  As someone who trained CRA Collections staff for 5-years, I can confirm this fact.

Collections staff are not allowed to even suggest that you go bankrupt.  They might confirm it, but that’s all they can do.

What CRA Collections can do, however, when they feel you are insolvent, is to force you into bankruptcy via their collection actions, which include but are not limited to;

  1. Bank garnishment
  2. Wage garnishment
  3. Lien on a property
  4. Enhanced garnishment to accounts receivables (in the case of a business)

All the while, why applying these garnishments, the CRA refuses to release the hold on the accounts.

They freeze every source of income that you might have and you are faced with the decision to come up with the funds to pay them, or file for a proposal or an assignment in bankruptcy.

In some cases, a bankruptcy is unavoidable and the right solution, but not in every case, which is why I strongly recommend speaking to someone who is looking after your interests first and foremost.

There are tax-related companies who are fronts for insolvency firms, so they might appear  to want to help you, but they want you to file for bankruptcy, and there are other tax-service firms which gather your information and they unable or unwilling to help you, pass you along to a trustee.

You don’t want or need either of those.

You need a tax firm which has the experience in CRA’s collections, and who have the relationships with not only Insolvency firms, but mortgage brokers, reputable accountants and investment professionals so that you’re options are laid out for you to decide the best option.

Not the CRA.

In order to resolve your tax issues you need to disclose the details so your options can be determined, and you need your tax help to do the same.

Ask your tax-help the following questions;

  1. Are you committed to finding me a tax-solution first.
  2. If that solution is not going to be accepted by the CRA, what other options do you feel would work.

Don’t be weary if a firm wants to charge you a small fee to diagnose and plan out your solution.

You should be weary if they want to charge you a significant amount of money to diagnose it  and not give you a plan.  If they want to keep the plan a secret, and not educate you along the way, it’s because there is no plan.

Likely their solution it to drag you along the process knowing that the CRA will come along and lower the boom and then suggest to you that your only option is to conveniently have them file bankruptcy for you.

Don’t ask the CRA if you should go bankrupt.  You might not like the answer.

If you owe money to the CRA and you’re not sure if the debt is a tax matter which can be resolved, or if bankruptcy or a proposal are better options, just ask!  Send an email to info@intaxicating.ca and let’s talk!  We’re here for you.

Insolvent or Tax Troubles?  Don’t Let the CRA Decide!

In my experiences which includes almost 11-years working in the Canada Revenue Agency (CRA), you should never allow the CRA to decide whether you can fix your tax problems or whether you should go bankrupt.

From the stand-point of a CRA Collections officer, going bankrupt is great because it removes the account from their inventory of accounts to collect / resolve.

Your file disappears from their inventory and re-appears in the CRA’s Insolvency Unit inventory.

From the perspective of the Collections Department, it’s case closed!

There are 3 ways a CRA Collections Office resolves one of their accounts;

1) Collect it / fix the compliance issue(s)

2) Write it off because they cannot collect it

3) Move the account to the Insolvency unit

Go Bankrupt!

The CRA’s Collections Officers are not allowed to tell you to go bankrupt. In fact, they…

View original post 530 more words

Your Questions Answered About The CRA’s Informant Leads (Snitch) Line

The Canada Revenue Agency (CRA) has employed the Informant Leads Line, or “Snitch Line” for a very long time, and with incredible results.Snitch line

The snitch line has been so successful that the CRA (Canada Revenue Agency) have constantly reduced their investigations workforce because they get more detailed information through tipsters than they would if they had employees trying to locate this information on their own.

Who uses this line?

The majority of calls to the Snitch line still come from ex-wives (and some ex-husbands), former business partners and neighbours who have been confided in and either felt compelled to notify the government of the fraud being committed or who were hurt, harmed or cheated by the person who has been committing the fraud.

The line is used to ”get even”, or have someone “pay their fair share”.

How private is the line?

It is important to know should you decide to call the Canada Revenue Agency’s Informant Leads Line that the CRA takes your privacy VERY seriously and they will never notify the person(s) / organization(s) that you call on that it was you who called their line.

The CRA will cite their “Privacy Notice”, meaning that they regularly collect personal information under the authority of the Income Tax Act (ITA) and the Excise Tax Act (ETA) and they will use that information as the justification for following up on information provided by callers to the Informant Leads Line to determine if there is an element of non-compliance with tax legislation, and if applicable provided to the corresponding compliance program for appropriate enforcement action.

Does this just go to the CRA?

Information provided on this line may also be referred to the Canada Border Service Agency (CBSA) or Human Resources and Skills Development Canada (HRSDC), in the event that the lead relates to one of the programs they administer.

Does it impact me?

The information provided is voluntary and will not affect any dealings you may have with the Government of Canada / Revenue Canada.

 

Here are some answers to the most common questions asked of me, relating to the Canada Revenue Agency’s (CRA) Informant Leads / Snitch Line, starting with:

1) When should I call the CRA’s Informant Leads Line:

When there is “Tax Evasion”, which is an illegal practice where a person or business avoids paying taxes or reduces their taxes by misrepresenting their activities.

2) How can I report tax evasion?

Over the Internet (I have linked the CRA page and provided it here in case you’re nervous about clicking the link)

Link: http://www.cra-arc.gc.ca/gncy/nvstgtns/lds/menu-eng.html#ntrnt

By phone, mail or fax

Phone: 1-866-809-6841 (toll free)

Fax: 1-888-724-4829 (toll free)

Office hours: 8:15 am. to 5:45 pm. (Eastern Time).

Mailing address:

National Leads Centre
Business Intelligence & Quality Assurance Division
Canada Revenue Agency
200 Town Centre Court Scarborough ON M1P 4Y3

3) Some examples of tax evasion are:

  • Not reporting all income
  • Claiming deductions for expenses that were not incurred or are not legally deductible
  • Claiming false GST/HST tax credits
  • Failing to remit source deductions
  • Providing false information on marital status or children to obtain benefits and credits

4) What happens to the information provided to the CRA?

The CRA diarizes everything and determines if they need to take immediate enforcement action or if they need additional information before moving forward. Either way, you will never be notified as to whether or whether not the CRA took action as they are prohibited from doing so under section 241 of the ITA and section 295 of the ETA.

5) Does the CRA pay for the information I provide?

No. The CRA does not pay for information received from informants who call the Snitch line.

The CRA does now have the Offshore Tax Informant Program (OTIP) which offers financial awards to individuals with information about major cases of international tax non-compliance resulting in more than $100,000 of additional federal tax being assessed and collected.

For more information, please visit the OTIP website, including how to make a submission.

6) What do I get for reporting tax fraud?

Well, besides feeling great, you are helping to ensure that all Canadian taxpayers are paying their fair share of taxes and this benefits all Canadians. The CRA will tell you that if everyone pays what they owe taxes might go down… I’m not holding my breath, but you never know.

7) Will the CRA ever reveal who provided the information to them?

Never!  However, you can provide them with consent to release your identity, should you want that person(s) / organization(s) to know. The CRA has a legal obligation not to disclose the identity of informants, any information that might disclose an informant’s identity or even information that might reveal the existence of an informant is removed, even in the case where an Access to Information request is made.

8) How can you send information by email?

You can submit general informant information to the CRA using their secure Internet portal. If you want to provide supporting documentation you are best to mail or fax it.

9) Does the CRA really look at EVERY lead, and take them seriously?

YES.

10) If I submit a lead, then want to revoke it, is there a way to do that?

NO.

11) What stops someone from phoning in a fake lead?

Well, before the CRA is able to take any action, they require more information that just “My ex has a job working for cash.” The CRA would need some or all of the information listed below to help them prioritize the severity of the tax evasion and let them know if they need to get more information or if they can get working on it right away.

Helpful information includes:

  • Names and contact information for the person(s) / organization(s) you suspect
  • Address of business / Taxpayer, phone numbers, email, etc.
  • Social insurance number (SIN) / business number (BN)
  • Date of birth
  • Spouse’s name
  • Business name – the registered name and / or the operating as name
  • Names of shareholders if a corporation is involved
  • Any related companies
  • Type of fraud you suspect:

     

    • Income tax (personal – T1 or corporate – T2)
    • Provincial tax (PST)
    • GST/HST
    • Non-filing
    • Fraudulent refunds
    • Canada Child Tax Benefit (CCTB)
    • Universal Child Care Benefit (UCCB)
  • Details of your observations
  • Documents: have you seen these documents? Do you know where they’re kept?
  • Does the person deal in cash only? Do you know what they do with the cash?
  • Net worth information, such as assets, including those outside Canada (cash, name and address of banks, house, land, cottage, vehicles, boats, etc.)
  • Liabilities (loans, mortgages, credit cards, etc.)
  • Personal expenditures (food, housing, trips, restaurants, hobbies, etc.)
  • Your name and phone number (this is optional)

The CRA will ask you if they can contact you if they require more information. That is up to you.

If at any point, the CRA determines this information is incorrect, fabricated or provided to them for the purposes of committing fraud, not only will they indicate the details on your permanent diary record, but they will also take actions against you.

Once you have submitted a lead to the CRA, it’s good to have an understanding of the fines and/or penalties which can be levied upon the individual / organization, as they can be as high as 200% of the taxes which were attempted to have been evaded.

In addition, the CRA publishes the results of its prosecution activities on its Convictions Web page.

Concerned that someone will call the CRA on you?

If you have found yourself to be in violation of any of these requirements and are worried that the CRA will find out, or that someone will call the snitch line on you, you should contact us at inTAXicating, and we can begin to discuss the steps to help you which may or may not include the CRA’s Voluntary Disclosure Program.

info@intaxicating.ca

http://www.intaxicating.ca

Remember:

It is ALWAYS better to get to the CRA before they get to you!

Why Getting the Largest Tax Refund Possible from the CRA is NOT a Good Idea

After spending close to 11-years working in the Canada Revenue Agency (CRA), I have a very good idea what gets people into tax trouble.

Okay, I know exactly what gets people into tax trouble, and while it’s nearly impossible to list them all, I can tell you that there are ways to get out of tax trouble which many have never considered.

I also know that getting a refund back from the CRA isn’t always a good idea.  More on that later.

I can honestly say, without any prejudice that the main problem has to do with firms advertising at tax time about getting the most money in the fastest way possible.  These ads are aimed at people who equate getting their money back fast through the quick, cheap filing of tax returns.

The ads go something like this;

“Get the Largest Tax Refund Possible”.

“Get the Most Back.”

“Get the Most You Are Entitled To.”

“Get your Money Back Now!”

Just hearing those advertising slogans scare me, and it should scare you too.

Getting money back from the government at tax time, does not mean what you might think it does.

You are not getting money from the government because you fell into a threshold, but what you are doing is getting your money back from the government.

Your money that you overpaid (or were over-deducted at source) which the government kept during the year – held interest-free in fact – which you are asking for back.

Amazing.

It’s akin to lending someone money for a year – they use it, or invest it and make money off of it – and then a year later you ask for it back and you get it, while they made money off of it.

So how does this tied into tax debt?

History has shown me that people do not wake up in the morning and decide that they want to start carrying a balance owing to the Canada Revenue Agency.  Nobody wants to worry when they go to use their debit card that there might not be funds there as a result of a CRA bank garnishment, or when they go to sell their home find out that there is a lien on it.

Tax problem occur over time and as the time passes and interest accumulates, people find their ability to deal with it declines and before you know it, the amount owing is massive and the CRA is breathing down your neck.

So imagine if after rushing to have your tax return completed – so you can get back a couple of hundred dollars – you find out that you owed money instead.  Now you have a tax problem.  A tax problem that you have not budgeted for.  Now in collections, you have time find a way to pay off this amount owing, and fast, before the CRA takes legal actions.  You can ask friends and family for money, or consider a second job to pay that off.  It can be done, it can take time, or it can snowball and you become a chronic tax debtor in the eyes of the CRA.

Now the fun starts.  Visits to your house, your employer and notices to your bank or clients all run the risk of causing you long-term embarrassment.

If only there was a solution available to help out the repayment.

Well, there is.

This scenario could be completely different if you have taken the time to speak with an accountant, or a reputable tax firm and knew in advance that you might owe and together you had the opportunity to determine the best way to handle this impeding debt by placing money into your RRSP, or applying for, and claiming deductions to reduce your amount of taxes owing at year-end.  With a good accountant, your tax planning is not just for the current year, but also for future years.  

Wouldn’t that make more sense?

One of the first questions I ask a prospective client, or anyone who comes to me for tax advice, is who completed your tax return and what are their credentials.  It’s important because I have taken tax returns which owed the CRA $3000, $4000 or $5000 each year and turned them in to $4000 and $5000 credit returns just by claiming deductions and tax credits available to those taxpayers which their tax preparation service either didn’t know about or didn’t care about.  You only get so much service for $50.

There is nothing illegal in doing that, and provided that there is legitimate supporting documentation, the CRA wouldn’t reject the claim.

So instead of rushing to have your return completed for $40 or $50, think about spending the extra money this year and take advantage of an accounting firm which will sit with you, determine how to minimize your tax expenditures for this year and for future years.

Pay what you owe and not a cent more, and if you’re getting money back every year find out why.  Learn which deductions you may be eligible for and start keeping your receipts.

Take control of your year-end tax filing and stop sending the CRA penalty and interest revenue.

If you already have a tax problem, you need to have tax experts review your prior year tax returns to look for missed deductions and credits.  With a simple amending of the return, your balance could be reduced or wiped out completely.  This really is the best way to start resolving your tax problem.

It’s what I do.  For you.

It’s worth the money!

If you are looking for an alternative, some assistance, or have tax questions, contact us at info@intaxicating.ca and let’s get the ball rolling.