CRA Taxpayer Relief Information Moved from cra.gc.ca to canada.ca

Looking for information related to the Canada Revenue Agency (CRA) Taxpayer Relief Program?

It’s moved!

Here is the information that matters! Link is at the bottom.

Taxpayer Relief.

Important note: A request for relief from penalty and / or interest amounts does not stop or suspend collection activity on an account or the accrual of interest.

Information you must include with your request

It is important that you provide the Canada Revenue Agency (CRA) with a complete and accurate description of the circumstances to explain why your situation merits relief.

In order to support a request, you should provide all relevant information including the following, where applicable:
• your name, address, and telephone number;
• your social insurance number (SIN), account number, partnership number, trust account number, business number (BN), or any other identification number assigned to you by the CRA;
• the tax year(s) or fiscal period(s) involved;
• the facts and reasons supporting that the interest or penalty were either mainly caused by factors beyond your control, or were the result of actions by the CRA;
• an explanation of how the circumstances affected your ability to meet your tax obligations;
• the facts and reasons supporting your inability to pay the penalties or interest assessed or charged, or to be assessed or charged;
• any relevant supporting documentation such as death certificates, doctor’s statements, or insurance statements;
• in cases involving an inability to pay or financial hardship, full financial disclosure including a statement of income, expenses, assets, and liabilities (to help individuals provide full financial disclosure);
• supporting details of incorrect information given by the CRA in the form of written answers, published information, other evidence; or when the incorrect information given by the CRA is of a verbal nature, you should give all possible details such as date, time, name of CRA official spoken to, and details of the conversation; or
• a complete history of events including any measures that have been taken, e.g., payments and payment arrangements, and when they were taken to resolve the non-compliance.

Note: You may submit photocopies of supporting documents. During the course of our review, the CRA may contact you if they need additional information or documentation, however that is not common.

Other considerations
• Indicate with your request if this is the first or second review request. A second review request is when you ask the CRA to reconsider its original decision.
You must include Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest to make a request to cancel penalties or interest.

You can also write a letter marked “Taxpayer Relief”.

Submitting the Application

You can submit your request to cancel penalties and / or interest and all supporting documents:
• online at My Account, My Business Account, or Represent a Client, by selecting the “Submit documents” service; or
• by mail at one of the designated offices below.
For more information on the Submit Documents online service, go to Submit documents online.

Designated offices:
• British Columbia and Yukon
Vancouver Tax Services Office
9755 King George Boulevard
Surrey BC V3T 5E1
• Alberta, Saskatchewan, Manitoba, Northwest Territories, and Nunavut
Winnipeg Tax Centre
66 Stapon Road
Winnipeg MB R3C 3M2
• Ontario, New Brunswick, Nova Scotia, PEI, Newfoundland and Labrador
Prince Edward Island Tax Centre
275 Pope Road
Summerside PE C1N 6A2
• Quebec
Shawinigan-Sud Tax Centre
4695 Shawinigan-Sud Boulevard
Shawinigan QC G9P 5H9
• Non-resident or international taxpayers (individual, corporation, trust, and part XIII and non-resident withholding accounts)
International and Ottawa Tax Services Office
P.O. Box 9769, Station T
Ottawa ON K1G 3Y4
CANADA

 

Link to CRA website: 
https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc4288-request-taxpayer-relief-cancel-waive-penalties-interest.html

 

inTAXicating – Your Canadian Taxpayer Relief experts!  Don’t believe us?  Contact us and find out why!  info@inTAXicating.ca

 

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What Do Lionel Messi, Cristiano Ronaldo and Floyd Mayweather Have in Common?

What Do Lionel Messi, Cristiano Ronaldo and Floyd Mayweather have in common aside from being top atheletes in their respective sports, and extreme wealth?

Tax Troubles!

Ronaldo and Messi with the Spanish Tax Authroity, and Mayweather with the IRS, which just goes to show you that no matter how much money you have, or don’t have, you still have to report income, file on time and pay your taxes!

In Ronaldo’s case, the Spanish Hacienda tax authority believes Ronaldo failed to pay €14.7 million in taxes pertaining to income earned on his “image rights” between 2011 and 2014.  The belief is that he used (and still uses) a shell company in the British Virgin Islands and Ireland, to hide at least €78m in image rights.

Ronaldo’s camp claim that he has fulfilled all his tax obligations, maintaining that the majority of his image-rights income is earned abroad and therefore not liable for Spanish tax.

How does Ronaldo’s situation differ from Lionel Messi’s tax case?
Barcelona star Lionel Messi and his father Jorge were found guilty of tax fraud in July 2016 after it was found they had hidden image-rights income from the Spanish authorities. Messi was fined €3.6m and sentenced to 21 months in prison (which was suspended) for defrauding €4.1m between 2007-09.

The Messi family had previously paid over at least €10m in back taxes and charges, long before their case made it to court.

In Messi’s case, the court determined there was a total failure to fill his tax obligations on image rights income.

A huge concern stemming from the The Supreme Court’s judgement in the Messi surrounded the role that Messi’s tax and financial advisors played and how both parties were not indicted as part of the prosecution since they there was evidence that they advised the player on how to evade taxes.

In Spain, a  guilty verdict for an aggravated tax crime means a mandatory jail time of two to six years, while conviction of the lesser offence brings a suspended sentence.  If Ronaldo admits to the details in front of the judge within two months after being accused, and pays over the amounts allegedly defrauded, his punishment could be reduced.

Messi’s 21-month prison sentence for tax fraud was reduced to a €252,000 fine, while his father’s 15-month prison sentence was reduced to a €180,000 fine.

These fines are in addition to the re-payment of the taxes originally owing plus any penalties and interest accrued to the balance.

Floyd Mayweather, and his estimated net worth of $340 million is in trouble with the IRS and has apparently filed a petition asking for a temporary reprieve from unpaid taxes from 2015 until after his fight with Conor McGregor in August.

Apparently, while he has substantial assets, those assets are restricted and primarily illiquid. The upcoming fight against McGregor, however, would provide Mayweather with enough liquid cash to pay the IRS debt from 2015 in full.

Mayweather, made $220 million alone from his 2015 fight against Manny Pacquiao. It is unclear how much he owes the IRS in taxes.  Given a 15-month lapse since the 2015 tax due date, Mayweather would owe 7.5% in penalties plus accruing interest on top of what he was already scheduled to pay.

Forbes estimated Mayweather’s net worth at $340 million in January.

 

So the moral of the story is this;

Not everyone wants to pay their taxes, and some will go to great lengths to reduce or avoid paying taxes. If that is something that you feel you must do, you have to be prepared for the consequences of your actions when and if the government comes back to you.

File on time.

Pay on time.

Don’t pay the government more than you should.

If you need help because you’re carrying a balance with the CRA and you want to discuss options, contact us today!

http://www.intaxicating.ca

@inTAXicating

info@intaxicating.ca

416.833.1581

 

Changes to the CRA’s RC59 Business Authorization Form

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 Goldhar TAX, 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!

Follow us on Twitter @inTAXicating and @GoldharTAX

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Send us an email: tax@goldhar.ca

Or leave us a comment anywhere else!

Proposed Changes to CRA VDP Should Go Further – Union.

The changes proposed by the Canada Revenue Agency (CRA) to the Voluntary Disclosures Program (VDP) have been described as an improvement, but no where close to what is needed to reduce tax evasion, according to The National Union of Public and General Employees (NUPGE) – one of Canada’s largest labour organizations.

VDP, as we all know, gives Canadian taxpayers who made mistakes or hid income on their taxes the opportunity to voluntarily come forward to the CRA and declare or correct the mistakes without fear of prosecution, and gross negligence penalties.

Some, however, feel the VDP has been overly generous in cases such as the deal offered to clients of the KPMG Isle of Man tax scheme.  The same people also believe that the CRA’s VDP has failed to differentiate between those who simply made errors in their tax return and “wealthy individuals” who wilfully evaded taxes using offshore tax havens.

While it can be very difficult to distinguish between someone who willfully evades taxes from someone who tried to but got caught, it is quite clear regarding the use of tax havens because either you report your offshore income (legal) or you don’t (illegal).

The union strongly believes that those caught “using a tax haven should be treated more severely than innocent mistakes.”

The Minister suggested that releasing the names of the participants and their advisors should be required although the CRA has always kept track of both scenarios once the disclosure has been approved.  Where a taxpayer received assistance from an advisor in respect of a VDP application, the name of that advisor should generally be included in the application.

The union expressed concern that the proposed changes fail to restrict access to voluntary disclosure in cases where leaks about tax havens are likely to provide the government with lists of Canadian account holders.  They feel that at that point, “it should be too late for wealthy individuals to take advantage of the VDP if they are already likely to be exposed.”

While I do agree the government should look at how they treat those who have not filed differently than those who store money offshore in hopes of evading the paying of taxes, I do not agree that in each and every case it is the “rich” or “wealthy” who are doing it.

In fact, I have encountered many Canadians of all races, religions and levels of income who have stuffed away money overseas and they range from being super-wealthy, to single parents on OAS or pension income who can barely make their rent.  It’s not just a “wealthy” issue.

Sure, it doesn’t read as well if its not an attack on the “rich” and yes, there are some who have complained that nowadays it is the unionized worker who is the “rich” in Canada, which is why I prefer to not paint everyone with the same brush, and group by filers and non-filers.

Under the program, any use of a tax haven scheme should mean less relief than for other forms of non-compliance, which makes a lot of sense.

For the union, they believe that; “the majority of Canadians feel that there are two tax systems, one for the rich and one for the rest of us.  It is very important for the government to get this right.”

NUPGE: Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good.

Link to original article:

https://www.nupge.ca/content/proposed-changes-canada-revenue-agency%E2%80%99s-voluntary-disclosures-program-should-go-further

 

 

Tax Freedom Day, 2017. Working For Ourselves Now… Theoretically.

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!)

Is the CRA Looking After Your Best Interest? Theirs? Or No Ones???

I have always felt that the Canada Revenue Agency (CRA) does an adequate job at what they are mandated to do, and that is to collect tax revenue and tax information from taxpayers while using their debt management (collections) division to collect from the unwilling or pre-occupied.

From the inside you are trained to understand that those who do not file or pay are “debtors” and that actions should be taken to bring these debtors into compliance right away.

You are also trained that if you can collect from – or force into bankruptcy – these individuals and corporations, that you are doing them a service but forcing them to make decisions that they are unwilling to make or unable to make.

Those of us who have worked in the “real world” understand that behind the account numbers and names there are real people who are trying to run real businesses and who find taxation either complicated or overbearing and cannot comply with the rules and regulations.

Since failure to comply can result in criminal actions, I believe that the tax rules are complicated and with little forgiveness on the party of the government, one small mistake can shut a business down, or result in significant monetary penalties.

The most frustrating part, I find, is trying to explain to the CRA that their actions – while justified internally – have serious implications on more than a business or a person.

Take for example one of my clients;

I spent the last week in serious discussions with just about everyone at the Winnipeg Tax Services Office, trying to convince then that if they keep a garnishment on a corporate bank account that they will shut down this corporation.

The corporation’s issue, which the collector, team leader, technical advisor, section manager and director felt justified these actions?

They were in collections for 2-years. They had a trust exam and fell behind.

GASP.

I mentioned the accounts I am resolving for them right now involving people and corporations in collections for 15-20 years. 2-years is a drop in the bucket.

I also let them know of the tragic circumstances surrounding this corporation involving a death, an illness and a mass exodus of employees which left one director now trying to keep his corporation alive. That was until the CRA placed the garnishment and wanted to shut down the corporation.

So the collector – new – and the technical advisor – new – find words to justify their actions and the director did not return my calls or letters (yet, apparently) did not feel compelled enough to get back to me and intervene.

The CRA’s solution instead of putting 3 employees out of jobs, and a family man without income to support his young family was to drag out the process and ask for a payment arrangement on a corporation with no income… From their actions.

So whose interests are the CRA looking after?

Theirs? Nope. By not allowing the corporation to operate and earn income they are going to lose out on revenue to pay their liability. When they do open up the account, the corporation will need to pay back rent, phones, internet, and buy stock before either paying themselves or the CRA.

Are they looking after the corporations interests? Heck no! By not being able to operate and by stringing along the director, this corporation is bleeding a slow death. Customers are losing faith, employees are quitting and with no money, the corporation cannot afford to fight any more.

So it is very clear at this point that the CRA is looking after no one’s interests. Their actions are destructive and they are too far from the real world to understand that in this case no action is the very best action.

Frustrating?

Absolutely.

So after one whole week of trying to talk sense into the CRA, I am hopeful that the garnishment comes off the account today. The CRA will get a plan on how this corporation plans to recover from a poorly executed collection actions which will get them one payment and nothing for at least a month.

The end game here will benefit everyone now that I am involved, but my job would be so much easier if the CRA understood that they need to listen to the experts and let the account resolve itself.

I would be so much father ahead than we are now and the poor director would have slept at least one night in the past month instead of trying to figure out why the CRA is trying to shut them down.

I’m looking out for the corporation’s best interests!

Someone has to!

TTC fares to increase! Don’t forget the CRA’s Public Transit Deduction.

The Toronto streetcar system is an extensive t...
Public Transit (Photo credit: Wikipedia)

Whether you like it or hate it, it is almost a certainty that TTC fares will be increasing in the City of Toronto at some point later this year or early in 2014.  The City of Toronto requires additional funding in order to FINALLY start building subways in the city and the TTC needs extra funds to improve it’s crumbling infrastructure.

Either way, if you are a user of public transit, you need to be aware that you may be eligible for the Canada Revenue Agency’s Public transit deduction.

Eligibility:

These passes must permit unlimited travel within Canada on:

  • local buses;
  • streetcars;
  • subways;
  • commuter trains or buses; and
  • local ferries.

You can also claim the cost of:

Shorter duration passes if:

  • each pass entitles you to unlimited travel for an uninterrupted period of at least 5 days; and
  • you purchase enough of these passes so that you are entitled to unlimited travel for at least 20 days in any 28-day period

Electronic payment cards if:

  • the card is used to make at least 32 one-way trips during an uninterrupted period not exceeding 31 days; and
  • the card is issued by a public transit authority that records and provides a receipt for the cost and usage of the card.

Who can claim these deductions?

Only you or your spouse or common-law partner can claim the cost of transit passes (to the extent that these amounts have not already been claimed) for:

  • yourself;
  • your spouse or common-law partner; and
  • your or your spouse’s or common-law partner’s children who were under 19 years of age on December 31, 2012.

But I do my own tax return.  Where does this go?

It goes on line 364 of Schedule 1, Federal Tax, enter your total public transit amount.

Amount shown on a T4 slip – Enter the amount from box 84 on line 364 of Schedule 1.

Note: If your employer paid your public transit pass, it is a taxable benefit included in your employment income.

Reimbursement of an eligible expense – You can only claim the part of the amount for which you have not been or will not be reimbursed. However, you can claim the full amount if the reimbursement is included in your income, such as a benefit shown on a T4 slip, and you did not deduct the reimbursement anywhere else on your return.

Always remember that if you are going to claim this amount you must keep your Supporting Documentation – receipts and transit passes – In case the CRA asks to see them at a later date.

The CRA will need the following in order to support your claim;

Your transit pass must display all of the following information to support your claim:

  • an indication that it is a monthly (or longer duration) pass;
  • the date or period for which the pass is valid;
  • the name of the transit authority or organization issuing the pass;
  • the amount paid for the pass; and
  • the identity of the rider, either by name or unique identifier.

If the pass does not have all of this information, you will also need to keep receipts, cancelled cheques or credit card statements, along with your pass(es), to support your claim.

The CRA will accept receipts (letters) generated by employers or Employer Pass Program Coordinators for employer transit pass programs.  The receipt should note the purpose, exact amount received, date of payment, and name of the payee.

Generally, the CRA will NOT consider a bank statement to substitute for a valid receipt, however, if your bank statement clearly indicates the purpose of the debit (for example, Employee FareCard), they will accept it as support for your claim.

If your current accountant does not ask you whether you take public transit, then you need to think about what else they are ignoring, and what other deductions you may be missing.

#Intaxicating

Passionate about Tax.  Passionate about helping people.

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A link to the CRA website to verify this information is below.

Line 364 – Public transit amount