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!

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Thursday Thirteen: 13 Ways to Know You Need New Tax Representation.

Since today is Thursday, I thought a Thursday Thirteen themed post might be a good change of pace!

Here are 13 things that should NEVER be said to someone with a tax problem, from someone who claims to want to help (or just your money).

Each quote below was an actual quote uttered by a tax solution representative or accountant to a prospective client in my presence.

Sit tight, and get ready to shake your head in disbelief…

13.  “GST, HST, PST… They’re all the same.”

12.  “CRA Collectors don’t care about you.  They treat their clients like a ‘whack-a-mole’ game.  You pop your head up and they smack you on the head with a hammer.  We provide you with a helmet or advise you to stay underground until the game is over.”

11.  “You’re an alcoholic? GREAT!  Substance abuse qualifies for relief!!”

10.   “I can tell you for a fact that the Auditor General requires the CRA to close files, NOT collect money.  The benchmark is 7-years.  We can close your file in 7-years!”

9.   “You’re just a little guy! Nobody cares about you.”

8.   “If you tell the CRA anything you are shooting yourself in the feet.  That’s dumb and it hurts.”

7.   “I know the CRA have won in Tax Court, but they are wrong, and this time we have everything we need to prove them wrong!”

6.   “Just ignore them and it will all go away.”

5.   “You don’t need to speak to a Tax lawyer, or an accountant.  They’re useless.  You should never talk to the tax preparer.  Just pay us $5,000 and we can make it all go away.”

4.   “The Taxman…”

3.   “I don’t care what the CRA wants, and how soon they want it.  They’re getting what I want to give them, when I’m ready to give it to them, AND they’re going to see that I’m right and they are wrong.”

2.   “We need to reduce the amount that you owe, so I’m going to create a T2200 for you, and claim a lot of expenses that your employer has not deducted like mileage, phone, and parking.  They’ll never know its not true and on the off-chance that they ask, I have hundreds of parking receipts in my car I can give them.  It’s perfectly fine…”

  1.   “Don’t even bother opening that envelope… Just throw it out.”

 

Just missing this list, but barely, is the commonly uttered line; “Quick, transfer the house out of your name before the CRA registers a lien against it!”

 

 

Why Your Tax Representation Matters

Every couple of days I receive a call from a taxpayer or corporation regarding huge sums of money they have paid to other so-called “tax solution” firms, without any apparent movement or resolution of their file.  Usually these stories involve secrecy and the requirement for additional funds in order to bring the file to a close.

Would you go to a dentist who treated you like that?

Or have your vehicle repaired at a shop where you were not even sure they had any mechanics there?

When dealing with tax-related matters there should be no secrecy.  There should be questioning whether work was done or not and there certainly should not be doubt that the job was not completed.

Unfortunately this happens more and more.

The representation you chose, when under fire by, not just by the CRA, but all areas of government, like the WSIB, RST, or CRTC, is far more important than you could possibly imagine.  Especially in light of the fact that the CRA, for example, keeps a permanent diary record of your conversations and their attempts to resolve your tax file.  They also carry forward an account summary every 6-months, so in the instance where an account has been transferred to another collector, that new collector will know within minutes how the CRA wants to treat you and / or your representative.

Lie to them.

Break promises.

Call them names, like the “taxman”.

It’s all there and its used against you… Forever.

Case in point:

A couple of years ago I met a couple of directors of a corporation who booked a 2-hour meeting with me for only $500 plus HST. They had come with the intention of having me assist them in negotiation with the Canada Revenue Agency (CRA) who were in the process of raising a Director’s Liability Assessment against them the unpaid debts of the Corporation they operated.  They could not afford to pay the balance in full and were worried the CRA would take their house.

These directors had also heard about a way to reduce penalties and / or interest and they wanted more information.

They had already met with 2 other tax solution firms and one of them had fed the CRA with a sob story which the CRA did not buy, and after failing to return calls, and have any meaningful conversation with the CRA, disappeared with their money.  The CRA kept trying to reach this representative and the directors had no idea how quickly the collections efforts had progressed and how upset the CRA had beceome.

The second firm charged them a lot of money, then set out to make a payment arrangement with the CRA, even accusing these directors of “fudging” their records in order to show less income than they actually had.

They were frustrated, had spent a lot of money and had now incurred the wrath of the CRA.

Then we sat down together to talk, and after only a few questions and a review of the notices they brought with them, I notified them of the statute of limitations the CRA must follow when raising a Director’s Liability Assessment under s.227.1 of the Income Tax Act and S323.1 of the Excise Tax Act, which was 2 years from the date the corporation ceased to operate or the date the director officially resigned from the corporation.

They said the business closed 3 years ago, and that their accountant had officially closed the corporation with the government.

We talked about the Taxpayer Relief Program and about key language to use when speaking to the CRA in order to begin to change the permanent diary record they keep on the corporation and the directors.

The meeting concluded.

I immediately pulled a corporate profile report, checked that against the date of the assessments the CRA were raising and found them to be beyond that limit.

I used the signed authorization forms to contact the CRA, and that 5-minute conversation resolved the account… Forever.

I provided the directors with a report of the meeting, including the information we discussed, the CRA’s actions to date, their likely next steps, plus recommendations about how to deal properly with the CRA going forward, and I explained to them that there was no need for a payment arrangement because the account had a zero balance.

Luck?

No.

Additional fees?

No.

Were they happy… You could say that.  After they wiped away the tears and finished squeezing the life out of me, they talked about the relief they felt knowing this matter was finally behind them, and how they had other tax matters they wanted me to handle for them.

If representative #1 or representative #2 knew anything about collections or looked beyond their huge payout, they could have helped these directors with this assessment, with the 9-month-long audit that followed or the issues with WSIB, and the CRTC so that these directors owed nothing and their files were closed and in good order.

Does representation matter?

You bet it does!

#inTAXicating

Can You Describe What You Do To A Stranger? Tell People What You Do!

If you have been reading my posts on The Urban Daddy, or on inTAXicating, you will know that I sometimes put on my MBA-hat and question everything about the way we do business.

One of the questions I have had for a long time has to do with how businesses choose to identify themselves to the public. We all know that keeping customers is much easier and much cheaper than getting new ones – so they say – which makes the next example even that much more puzzling to me.storefront without sign

Storefronts, in particular, have very limited space to let potential customers / clients know a whole lot about what they do, so that you will use their goods and services, yet many businesses continue to put their brand name on the store, or use an unreadable font which limits their ability to get new customers who are not walking by the store and who have the time to look in the window and walk in.

As I question this, I think back to one of the more complex collections cases that I handled while working at Canada Revenue Agency (CRA) and how after years of being unable to get a cent out of this establishment, I had much different results.  This case had to do with a very large restaurant just North of Toronto which had fantastic food, very positive reviews, incredible decor, and $3,000,000.00 owing in taxes, without a single payment made to arrears in years.

The owners of this restaurant were perplexed at the spiralling debt and their bleak prospects for operating in the future because what started off as a very profitable business venture went south, quickly and at massive costs – both personal and professional.  When their debt grew, they started to cut costs, but it was the wrong costs – like having fresh food on the premises daily, reducing the variety and portion size on their menu and by running out of options at meal time.

Regular patrons became frustrated with the frozen additions or the cutting out of their favourite meal choices and as their clientele dwindled to handfuls of patrons during the day and at night, it only made matters worse.

With their personal assets fully leveraged to keep the business running, they were steps away from bankruptcy and losing everything.  They also were not paying their tax debts, but they were staying current on their filing obligations, and between the threats from previous collectors and their power being turned off all the time, they knew the end was near.  After hearing this, I thought I would need to see it myself, so I took my newly earned MBA and headed out to have a conversation with them about what they had intended to do with these debts.

But I could not find the restaurant.

It was supposed to be 15,000 square feet, and I knew the intersection quite well, but could not for the life of me find their establishment.  I called the owner and while I was circling the plaza on the corner he was frazzled about how I could not see their fantastic place, which I found to be very bizarre.

I ended up parking on the plaza on the corner and walked past a couple of stores before finally seeing what I had been circling for the better part of 20 minutes.  Their restaurant.

The outside of the building looked run-down and there was no name on the building.  I could not even tell where the front door was, and once I got to the door, I didn’t even know if it was open.  There was no sign that even said “Restaurant” or specified the type of food that was in there. There was some very hard to read script writing near the top of the building and near the door, but it looked more like graffiti than it did, a brand name.

Having been there a couple of years, locals knew about them, ate there but to an onlooker, there was no way of knowing there was a restaurant there.  I started to see a pattern emerge.

Upon sitting down with the owners I immediately suggested they perform a search on the business on the Internet (Alta Vista, I believe) and there right in front of their eyes, were people commenting about how they had made reservations but could not find the building, so did not go, or that they arrived but could not tell if the place was open, or where the front door was.  There was obvious frustration.

To me, it was common sense, that this building needed a sign that read “Italian Restaurant”, so at least people would know where they were going, or people who drove by or walked in the plaza would know there was something there.  On a more obvious scale a giant arrow pointing at the building would have been better but this was a very classy place, and that would cheapen the brand, they felt.

Needless to say, I spent 3-4 hours there, we talked about everything relating to their business, their debts – business and personal, and at the end of the day I decided to give them a couple of months to sort things out, reduce some costs, and try to attract more business which they knew they needed.

All of this effort was rewarded when they sent in a cheque for $250,000 at the end of the following month to the CRA.  By the end of the year, they had paid off $1.8 million dollars of their debt, and by the end of the next year, they were fully paid up (including penalties and interest) and business was booming.

Is it 100% a result of something I said? Probably not. Did I afford them the time to make money and pay off the debt, yes I did, but I also went through their options should they have chosen bankruptcy, a proposal, or to ignore the CRA completely and wait for their assets to seized and the directors assessed.

With all that information they were able to make an informed decision, the most obvious to me being that they improved their signage, cleaned up the outside, and put a neon sign which flashed “OPEN” on a very visible spot near the sign and near the door (with a classy arrow pointing towards the door).

But how does this apply to you and to me?

I recently took part in a challenge on LinkedIn to say what I do for a living in one sentence. I thought how hard could it be, and I wanted to check out what others had written before me. With over 300 respondents, I would have plenty of samples to review before taking the plunge, but I was shocked by what I saw.

I saw people – people I do not know – in businesses I did not know who wrote things like this;

“I solve all of your problems.”
“I get you want you need at the price you want.”
“I’m what you need.”
Even, “We’ve got you covered.”

I looked further at their business profile to see if I could tell what they did, however their business name, or description was equally as vague.

I read and read and read, almost 100 of them by now, and when I came to a comment by a lawyer, I was dumbfounded when I saw this; “I practice law.”

I immediately thought about what I would do if I came to this networking group for a professional to hire in a very specific area and I saw “I practice law” as someone’s description… Would I contact them to find out what kind of law? Or would I go to the next person.

I went to the next person.

Then the next and the next and the next.

Then I posted challenging people to go back and edit their posts. Be proud of who you are and the services you offer. Tell everyone what you do, be clear, but be brief, and if someone has more questions or wants information, they will reach out to you.

So what about my post?

Now I had a lot to live up to, because I called out the patrons of the group and if my post sucked, boy would I be the biggest hypocrite in the world.

So I posted this;

“My expertise is with the Canada Revenue Agency (CRA), and their Collections / Enforcement division and I use this knowledge to help people and business understand taxes and pay only what they owe, on their terms.

Then I said, “please read this and if you do not know what I do, or if there is feedback – positive and negative – please provide it. I too would love the perfect pitch and I appreciate any input from this fantastic group.

So next time you are looking for a restaurant to take your family and you drive by one which only has a name and not a type of food, think about how much business they could be losing by placing their focus on themselves and not on the service or product their offer.

#Tax