Filed your 2019 Personal Income Tax Return: Now what?

What an absolute crazy year 2020 has been thus far!

The tax filing deadline for individuals to file their 2019 personal income tax returns (T1) in Canada was June 1st, by 11:59pm. For Canadians who have earned self-employment income, their returns are due by June 15th, 2020. Payments for balances owing are due to the CRA by September 1st, 2020, and the CRA is currently not charging interest on exsting balances owing the them, nor interest or penalties for any late payments or filings for the time being.

New and enhanced services

Check CRA processing times – Want to find out quickly how long it will take for the CRA to process your return, or your refund? Use the Check CRA Processing Times tool on canada.ca to get a targeted completion date. The new tool uses published service standards and information you select from drop-down menus to calculate targeted completion times for various programs.

Dedicated telephone service for tax service providers – If you are still working on a tax return(s), the CRA have been offering this service to small and medium income tax service providers across Canada for the 2020 tax filing season. By using this service, income tax service providers can connect with experienced CRA officers who assist with complex tax questions.

Representative authorizations – Thank goodness, the CRA has created a new e-authorization process for online access to individual tax accounts which permits representatives to request access to individual tax accounts using a web form through Represent a Client. As a result, the existing T1013 form will be discontinued for access to individual tax accounts.

The T1013, RC59, and NR95 will be combined into one form called the AUT-01 Authorize a Representative for Access by Phone and Mail. This form will only be used to request offline access to individual and business tax accounts.

Owing Money to CRA

If you have filed, or are about to file and you owe money to the CRA, there are a couple of critically important facts you should keep in mind.

  1. If you have applied for any of the COVID-prompted benefit programs, and have done so through Direct Deposit, you may, unfortunately, be at risk.
  2. The CRA is delaying the payment of balances owing until September 1st, while not charging interest on all accounts except payroll accounts. This shouldn’t mean its okay to forget it until the fall, but rather, with no interest being charged on existing balances, its the best time to figure out ways to catch up, set aside funds, or find / earn funds to pay off the CRA
  3. Before we all know it, it will be September, and a few things will be certainties. Our year-end will be fast approaching for the 2020 tax filing season, any balances owing to the CRA will be due, and the Canadian debt and deficit will be through the roof. The Federal government will need those funds ASAP, and aside from raising taxes, they will likely begin aggressive collections of taxes owing. The quickest way the CRA can recover funds, is by issuing a Notice of Assessment (which has legal warning in it) and then taking those funds from your bank account.
  4. You have options outside of bankruptcy, consumer proposals, high-interest loans, or high-rate mortgages. Preparing in advance for this situation and working with the CRA can prevent unwanted or unexpected surprises.

 

The CRA’s collections staff have already been advised where to locate direct deposit information and how ensure it is accessible when full collections are permitted.

Don’t wait until it’s too late.

inTAXicating can assist with anything CRA-related. With over 10-years experience working in the CRA’s Collections department, we know things the CRA will never tell you.

 

Taxpayers Ombudsperson to Examine CRA Legal Warning Process

The Taxpayers’ Ombudsperson, Sherra Profit has announced that the Office of the Taxpayers’ Ombudsperson (OTO) will be undertaking an examination into the systemic issue of the Canada Revenue Agency’s (CRA’s) practices regarding providing legal warnings to taxpayers when collecting unpaid taxes.

Obviously, the OTO have received many complaints alleging that staff at the CRA have been taking legal actions – freezing and seizing funds from bank accounts, garnishing wages, taking refunds – without notifying taxpayers first, or without working to make a payment arrangement first.

Oh oh.

Apparently, the purpose of this exercise is to allow for the Ombudsperson to identify the current process the CRA uses in order to take legal actions, specifically to see if the notice being given is “sufficient”.

Additionally, there will also be a review of whether the CRA clearly identifies their entire collection process on their website.

Is it clear enough for the average Taxpayer to understand not to carry a balance with the CRA?

After the examination, the Taxpayers’ Ombudsperson will make her findings public in a report.

For those of you not familiar with the Office of the Taxpayers’ Ombudsperson (OTO), they “work to enhance the Canada Revenue Agency’s (CRA) accountability in its service to, and treatment of, taxpayers through independent and impartial reviews of service-related complaints and systemic issues”.

The website can be found here; https://www.canada.ca/en/taxpayers-ombudsman.html

The OTO wants to initiate systemic examinations when complaints or questions are raised about a service issue that may impact a large number of taxpayers or a segment of the population, in order to keep on top of the pulse of Taxation and the CRA here in Canada.

Recommendations arising from these examinations are aimed at improving the service provided to taxpayers by the CRA.

Quotes
“While the CRA’s collections practices and collections officers’ behaviours are some of the most common complaints received in my office, we have received more specific complaints about the legal warnings aspect.  CRA collections officers generally try to work out an acceptable payment arrangement that will allow taxpayers to avoid undue financial hardship. Taxpayers who contacted my office indicated they were taken by surprise, and said they have faced financial hardship and stress because of the lack of notice prior to CRA taking legal action.”

Sherra Profit
Taxpayers’ Ombudsman

Well…

Let me tell you, Office of the Ombudsperson, that there are 3 important pieces to the puzzle that you do not know about or have overlooked;

  1. The issuance of the Notice of Assessment (NOA) comes with legal warning built right into the notice.  As the CRA’s collectors will tell you over and over again, the CRA is not a bank and thus, by issuing the NOA the CRA is demanding payment in full.  If, for whatever reason, a taxpayer cannot make payment in full, they are expected to contact the CRA and let them know.
  2. Recent attempts by the CRA to lower their workloads resulted in the creation of New Intake inventories where by the collectors were advised and trained to take immediate legal action against a taxpayer once the 90 days grace period granted upon the issuing of a Notice of Assessment has passed.  Day 91 = legal action.
  3. Trust accounts, situations where trust funds are due to the CRA as due right away and no collection restriction applies, ie/ jeopardy.

The answer here might include spelling out information on the CRA website a touch more clearly, and it should include having it in a few more places, maybe flashing and more noticeable because to educate and inform each and every Canadian Taxpayer all the time so everyone knows, just is not feasible.

Personal experience working at the CRA has afforded me a much different view of the CRA’s legal warning procedures and when I compare how I handled files to how others did, I get it… There are issues.

I cannot tell you the number of times I gave verbal legal warning, followed that up with written legal warning, then followed that up with another call and then upon freezing a bank account, got that call of surprise and shock.

However, I do know of a few others who froze bank accounts and instead of sending the legal document to freeze the account to the bank and the Taxpayer on the same day, held on to the Taxpayer’s copy for an extra day or 2 in order to prevent the Taxpayer from getting the notice first and emptying his / her bank account.

It’s not as clear as one might want it to be…

OTO… You’re going to be so disappointed with what you find, but you need to understand before you try to make the CRA A kindler and gentler place that everything is already in place, policy and procedurally, to do just that.

It could just be that people who are not informed do not feel they have a person or place to ask questions without fear of reprisal!

 

If You Can’t Beat Them or Join Them, Copy Them! Tax Law Firm Copies inTAXicating Winning Tax Solution Model

Imitation is the sincerest form of flattery.

If you can’t beat ’em, join ’em.biz name official

 

If you are fighting a losing battle, find your most successful competitor and do what they do!

If you are one of the many people who have paid tens of thousands of dollars to a prominent tax lawyer because they told you a lawyer was absolutely required to save you from the “taxman,” you are going to be really disappointed to learn the firm itself no longer feels that way.

As a result of a drawn-out and very public dispute with the Law Society of Upper Canada over their retention of client retainer fees to keep them from the reach of the Canada Revenue Agency (CRA), DioGuardi Tax Law has been forced to reinvent themselves into our firm, inTAXicating, by saying when people owe tax to the Canada Revenue Agency, a lawyer is no longer the most effective choice for ending the problem.

Oops.

From their press release, Philippe DioGuardi is reported to have said “People who owe tax are vulnerable to the Canada Revenue Agency’s aggressive collection tactics. They need fast and affordable ways to fix their tax trouble before the CRA comes after them with bank and wage garnishments or liens against their home and other property.”

Something I have been saying for the past 10 years!

In an effort to possibly save their business, the press release goes on to explain that hiring lawyers for CRA collections matters is time-consuming (read: expensive for clients) and slow: “They know what I know about fighting the CRA. And because they’re not lawyers, they can work more quickly to end people’s tax debt trouble for less than a lawyer would charge. Frankly, when the trouble is that you owe tax, you don’t need the hassle of hiring a lawyer to fix it.”

Unfortunately, the aggressive negotiation tactics DioGuardi’s firm is known for and which the CRA despises are still at the centre of their campaign.  They also boast a network of resources to assist people who need help with financing, and to slide people into bankruptcy when they cannot get financing.

DioGuardi’s previous radio advertising warned Canadians against searching for Tax Solutions on the Internet (so you will not find answers or firms like inTAXicating) and against so-called Tax Solutions firms, which are really Bankruptcy firms offering to “help” you with your tax debt by plunging you into bankruptcy after drawing out your tax file to incur more fees.

So inTAXicating now has a little competition … kind of … in the field of tax solutions and assistance with CRA issues.  You can either choose 17 years of tax experience – 11 of which were spent recently working in and managing CRA collections – or you can choose a firm which used to believe only lawyers can solve tax problems, but now tells you lawyers are not needed to solve tax problems, and oh, hey, they also used to work somewhere in the CRA 25 years ago.

Once this model wears out, watch for them to morph into Tax “Brokers” so they can do the work, and get paid after the fact, all in an effort to “protect” your money from the “Tax Man”.  It’s all the same everything, just dressed up in different clothing.

For us, nothing has changed.

If you have a tax question, issue, lien, or concern with the CRA, or RST, or need help regarding an audit or Taxpayer Relief, or just want to ask a tax question, then send an email to info@intaxicating.ca and you will have your answers.  If you need to hire us, we’ll tell you.  If you can handle it yourself but need a little guidance, we will tell you.

Our reputation is as important as your reputation.

inTAXicating Tax Services.  Canada’s only Tax Solution option!

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