Mailing to Supressed Holders – CRA and MRQ.

Have you ever wondered if you are required by law to mail out a tax slip to an individual / entity even though in doing so you know it will be returned by the post office marked as “undeliverable”.

These Q&A’s below may help you get a cleared picture of your legal requirements;

Q1: Is there a requirement to mail tax forms to suppressed holders?

A1: Yes. There is no statutory exception to this requirement. The forms specifically mentioned included; the T5, T5008, T4, T4PS, T4RSP, T4RIF, RSPR, T3, NR4, T5013 and T101.

Q2: Will the government excuse you from mailing to suppressed holders if the issuer/client advises you not to mail them / their clients?

A2: No, the obligation to mail is yours, because you make the payment (e.g. dividend or interest). In fact, if there were a penalty charged for failing to provide a tax slip, it would be on you, not the entity or person advising you.

The Income Tax Act does not specifically say “you must mail to suppressed holders”.  Rather, it states that if you make a payment, you have to send out a tax form.   The Income Tax Act does not make a distinction between suppressed holders and other holders. (Note, even though we do not actually “make a payment” – in that we do not send out a cheque to a suppressed holder – the analysis is the same.)

Q3: Is the requirement to mail absolute regardless of the dollar amount, or is there a dollar amount threshold? For example, don’t have to mail unless the aggregate amount paid to a holder is greater than $50.00.

A3: There is a $50 threshold for T5 reporting (that is, the CRA does not require that a T5 be prepared if the amount of the payment was less than $50).  For the other tax forms, there is no threshold.

Q4: What about prior tax years?  Do we have to mail these prior years’ tax forms if requested?

A4: There is nothing in the Income Tax Act which would alleviate the responsibility to provide prior year forms and failing to provide one may result in a complaint and subsequent audit.

Q5: What is the situation with respect to suppressed holders under the Quebec income tax regime, the MRQ?

A5: Similar to the Federal Income Tax Act, under the Quebec income tax regime (a) there is a requirement to mail the tax forms and (b) you are not excused from mailing if the issuer/client advises you not to mail.

Bottom line… Mail!

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Is there a requirement for a US company who is mailing a tax document to a resident of Quebec to mail the document in French?

 

After some investigation, speaking to the IRS, and then to the CRA, I found nothing. I should have reached out to the Quebec government.

Legally, an employer must provide a French version of a document if requested by the employee as stipulated in
The Charter of the French Language.  Here is the link: http://www.olf.gouv.qc.ca/english/charter/index.html

2. Every person has a right to have the civil administration, the health services and social services, the public utility enterprises, the professional corporations, the associations of employees and all enterprises doing business in Quebec communicate with him in French.

6. Every person eligible for instruction in Québec has a right to receive that instruction in French

The Penalties:

Section 205. Every person who contravenes a provision of this Act or the regulations adopted by the Government thereunder commits an offence and is liable

(a) for each offence, to a fine of $250 to $700 in the case of a natural person, and of $500 to $l,400 in the case of a legal person;

(b) for any subsequent conviction, to a fine of $500 to $1,400 in the case of a natural person, and of $1,000 to $7,000 in the case of a legal person.

Now we know!