Common CRA Audit Triggers

Common Audit Triggers

Audits in Canada are typically assigned randomly. There are, however, some reasons as to why some taxpayers are audited more often that others.

Here are some of the most common factors which may increase the chance of being audited by the CRA, from most common to least:

 

Screwing around with Trust Funds

Sorry to be so blunt, but there is nothing that raises the ire of the Canada Revenue Agency (CRA) more than finding out, or suspecting that you have been less than honest with Trust Funds – the money taken from employees or customers and held in trust for the CRA.

In these instances, the CRA comes to audit fast, and leave no stone unturned.

Self-employment income

The addition of self-employment income, along with or instead of T4 income is an area of significant concern for the CRA.

Earning T4 income, means is likely that the sufficient amounts of tax, CPP and EI have been withheld and remitted to the CRA on your behalf and on behalf of your employer, making it low-risk.

Self-employed individuals, on the other hand, do not, in most cases, have taxes withheld at source, making it more under the scope of the CRA.

The Industry you operate in

This is a two-fold flag because not only are some sectors audited more than others – dentists, real estate agents, restaurants, construction companies, and corner stores that take cash, for example, but the CRA also uses the industry that all businesses / taxpayers operate in, and compares the numbers reported to those of the others in your industry.

If you stand out for one reason or another, expect to be asked why, in the form of an audit.

Additionally, in around November of each year, the CRA computers match and compare many pieces of taxpayer information, looking for slips which were not declared, or for outliers.

3rd Party audits

Often times taxpayers are audited simply because a related party is being audited. Sometimes this means that family members or shareholders of a closely-held corporation are audited in the course of the audit of the corporation. Other times various corporations in a supply chain may be audited because of the audit of one of them. Sometimes contractors are audited because of a payroll audit at the corporate level.

There is nothing that can be done to minimize this risk factor. Unfortunately, the more businesses and taxpayers that a particular taxpayer is involved with, the greater likelihood of a CRA audit.

We represented a construction company which had immaculate books and records, yet were under audit by the CRA for almost a year. It made no sense, because every single item requested by the auditor matched and was reported correctly.

It finally came to light that a customer of this company from 8-years-ago had tried to commit fraud and claim a receipt for services which were never performed by this company (they had changed the date and written “CASH” across the invoice).

After proving the invoice was fraudulent, the audit suddenly ceased and the taxpayer who changed the invoice was charged with fraud.

You just never know!

Informant Leads Line Tips

The Informant Leads Line / or Tips line or Snitch line, has provided way more tax and audit leads that the CRA could have ever imagined – and still does.

In light of the fact that tips relating to offshore tax evasion may yield a reward for the informant, it may never end.

Moral of the story: taxpayers who are cheating the system should not count on staying under CRA’s radar forever. They should also be careful as to who has incriminating evidence which could be reported to the CRA.

Common leads come from; ex-spouses, former employees, and neighbours. So the next time you piss someone off, you might want to make sure they don’t reported you to the CRA.

Living Beyond your means – Net Worth Assessments

Taxpayers who live in a $4 million dollar house, and who report income of $1/year, can expect to have caught the attention of the CRA. The same goes for taxpayers who have debt to the CRA and are unable to pay, yet post publicly on their social media of their travels and lavish expenditures.

Lifestyles which appears to be incongruent with the amount of declared income can expect to be audited.

Using your Vehicle for business / Claiming vehicle expenses

Vehicle expenses are often arbitrarily determined. When preparing their tax return, often times taxpayers and their accountants pick a reasonable number for vehicle expenses based on an estimate of the percentage of the vehicle usage used for business purposes.

Few taxpayers actually keep a log of every trip, yet every one should!

Not having a log, and corresponding calendar means that few taxpayers can prove to the CRA with absolute certainty, the use of a vehicle for business purposes – thus making it easy for the CRA to deny the expenses.

Real estate transaction

Thank you Liberal government and your out of control spending.

As a result of the need for tax revenue to pay down the debt and deficit, the CRA began cracking down on real estate transactions in the past 5-years. Had the Liberals won a majority government in the 2019 Federal election, there would be capital gains taxes on the sale of principal residences. Right now, it is a requirement for Canadians to track and list on their tax returns the sale of their principal residence.

To say that the CRA pays careful attention to real estate transactions would be an understatement. The CRA frequently audits HST rebates, pre-sale condo flips, new home construction, principal residence exemptions, and many other real estate transactions.

Being involved in multiple real estate transactions sharply increases the chance of being audited.

Home office expenses

The CRA loves auditing home office expenses. Home office expenses are often arbitrary and over-declared, along with the percentage of time the home office is actually used, and the percentage of the house used for the purpose of earning income.

Operating a cash business

When there is a lot of cash being received by a merchant, there is more opportunity for the CRA to recover taxes on undeclared cash income. One common trick the CRA will perform involves the deposits going into the business or personal bank account which are significant, repetitive or unsupported. In these instances, they are declared as income, and a 50% gross negligence penalty is applied.

Adjustments / Amending returns

The CRA is on top of the business or taxpayer who declares a little income and then amends their returns after the fact to report the actual, and much higher balance. Not only is the prohibited, but it’s a great way to be audited.

If the amending  results in a refund, or a refund is issued and then the correct filing results in a balance outstanding, then – you can expect an audit.

Donations – Large and Tax Shelters

If charitable contributions are suspiciously large and do not seem to be possible or likely within the confines of a taxpayer’s income, such donations or contributions are very likely to be audited.

As well, charitable contributions made to organizations suspected of being involved in tax schemes are even more likely to be subjected to an audit.

As long as there are taxes there will be individuals and organizations selling (and conning) taxpayers into participating in tax schemes to reduce taxes. Some of these schemes are outright frauds, while others have no fraudulent intent, but for one reason or another fail.

The Canada Revenue Agency actively and aggressively audits taxpayers who are involved in a tax shelter, a gifting program, or any other tax scheme.

In many circumstances, taxpayers are able to receive refunds and benefits from these programs for several years prior to the CRA auditing, and then reassessing the donation. Unfortunately, since it can take a bit for the CRA to learn of the scheme, and refunds are issued / debts reduced, the participants often bring in family and friends and get them caught up in the program.

Typically, in these schemes, taxpayer may receive tens or hundreds of thousands of dollars of CRA refunds to which they were never entitled only to have the CRA come back and audit and reassess years later, along with gross negligence penalties and interest. $100,000 in illegitimate refunds can turn into more than $200,000 once penalties and interest and the passage of time have been taken into consideration.

The rule of thumb is that if it appears too good to be true, it is.

Shareholder loans

Shareholder loans which are not repaid within a year after the year-end of the corporation are often audited, because the CRA suspects they are not legitimate and were simply paper transactions.

Loans where shareholders took revolving loans from the corporation, paying each off just prior to the deadline and then taking a new loan, are also on the CRA’s radar for audit due to their tax benefits.

It shouldn’t need to be said, but taxpayers who are both shareholders and employees of the corporation should be very careful with shareholder home loans, and should have all supporting documentation available.

In order for a home loan to be treated as an employee home loan rather than a shareholder loan, the loan must be made because the person is an employee, rather than because they are a shareholder and should be available to all other employees.

Child-care costs

The CRA regularly conducts mini-audits to ensure that parents who claim childcare expenses maintain proper documentation, and that the children actually attend the establishment for child care and not just for playdates. Claiming childcare for children who hang out with their grandparents a few days a week while the parents are not both working out of the home, would prompt an audit.

Employment expenses

Employees who are issued a T2200 form by their employer are entitled to deduct certain employment expenses from their income. Perhaps the employee has to pay for their own vehicle to travel to sales calls, or perhaps they have to maintain a home office. As long as the employer requires that the employee pays these expenses in respect of their job, they likely can be deducted from income.

Since this is an abused area (each expense is paid for with pre-tax dollars and reduces the overall tax paid by the taxpayer) the CRA audits many employees with the T2200 to ensure that a) their form is properly completed and may be used to deduct the expenses in question and b) each of the expenses claimed was legitimate and for the purposes of their employment, as outlined in the T2200.

Previous audits

If the CRA keeps coming back and auditing and re-auditing every aspect of a business – and if they keep finding issues – that business or taxpayer can expect to be on the audit list for each and every year.

Criminal activity

All business profits are subject to taxes. This includes both legitimate and illegal businesses. As far as the CRA is concerned, if you are earning income you should pay taxes. Period.

So if a taxpayer is accused of or convicted of a crime and the CRA learns about the illegal business which was taking place, they often audit and reassess the taxpayer for taxes on the proceeds of crime – whether or not the taxpayer still has such proceeds. Often times, criminal activity is weeded out during an audit, as opposed to the CRA knowing there is an illegal business and pretending that it is legitimate.

These audits usually require the supporting documentation to justify expenses, and often there are none provided resulting in extremely large assessments.

 

Conclusion:

Keep your records together by year, and expect to be audited each and every year. When you are not, be thankful.

 

How to Make a Payment to the Canada Revenue Agency (CRA)

Do you owe money to the CRA?  Are you in Collections?  Do you have CRA debt?  Are you looking to make an installment payment, or a payroll remittance?  How about a GST/HST payment or remittance?

If any of these apply to you, then you need to know how to make a payment to the to the Canada Revenue Agency (CRA).

If you have to make a payment to the Canada Revenue Agency (CRA) for either tax arrears or with a filed return, or as a remittance / installment, you have no excuses!  You can use any of the following options:

  • Your financial institution’s telephone or online banking service
  • The CRA’s pre-authorized debit service offered through My Account, which lets you:
    • set up a payment from your bank account to the CRA on a pre-set date
    • pay an overdue amount or make instalment payments
  • The CRA’s My Payment service, which lets you make payments online. You can use this service if you have Visa®Debit, Debit MasterCard® or Interac®
  • Online at a participating financial institution
  • Through a third-party service provider which offers payment by credit card or PayPal.
  • In person at any Canada Post outlet using cash or debit card.

 

What if you cannot pay in full, or if the CRA is all over you and you want to make a payment but don’t want them immediately sending a Requirement to Pay to your bank account and freezing it? 

 

If you owe money to the CRA but are unable to pay the full amount now, or if you need the CRA to work with you and set up a payment arrangement – to make smaller payments over time until you have paid your full debt (including penalties and interest), you should contact inTAXicating Tax Services through our website www.intaxicating.ca to schedule a meeting.

Aside from helping you make that payment, and avoid the garnishment, we can also assist with a wide variety of tax matters.

We can also assist with the potential cancelling, waiving or reducing the amount of penalties and / or interest you owe through the CRA’s Taxpayer Relief Program.  Results are never guaranteed, however, you stand a 0% chance of having the penalties and / or interest reduced or waived entirely if you do not apply.

Email: info@intaxicating.ca

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.

2014 Canadian Tax Filing Calendar. Important Deadlines Coming Up In 2015.

I receive a lot of queries surrounding the key Canadian Tax Filing Dates and Deadlines which impacts Individuals and Businesses, so I gathered that information and while not exhaustive, it highlights key dates and deadlines for you to remember and mark on your calendar for the next couple of months.

Remember being late results in penalties and interest and penalties incurred year over year increase in percentage.  For example, a regular non-filer who became a late filer was paying a late filing penalty of 62% by his 5th year of late filing.CRA Logo

2015 Canadian Tax Dates and Deadlines for the 2014 Taxation Year.

For Individuals:

On or before April 30th, 2015 (a Thursday) is the Personal Income Tax return deadline.

Self-Employed (you or spouse/common-law partner):

If you or your spouse or common-law partner carried on a business in 2014 (other than a business whose expenditures are primarily in connection with a tax shelter), the deadline to file your 2014 income tax and benefit return is midnight on June 15th, 2015.

*** However, if you have a balance owing for 2014, you still have to pay it on or before April 30, 2015.

Deceased:

If you are the legal representative – executor, administrator, or liquidator – of the estate of an individual who died in 2014, you may have to file a return for 2014 for that individual.

Information relating to those filing requirements can be found on the CRA website; Guide T4011, Preparing Returns for Deceased Persons,

Additional information can be found here: Information Sheet RC4111, What to do following a death.

The due date for the final return will depend on the date of death and whether or not the deceased or his or her spouse or common-law partner carried on a business in 2014.

Of note, if  you received income in 2014 for a person who died in 2013 or earlier, do not file an individual return for 2014 for that income on behalf of that person.  You likely will have to file a T3 Trust Income Tax and Information Return for the estate.

RRSP Contributions:

March 2nd, 2015 is the deadline for contributing to an RRSP and to have that contribution count towards your 2014 tax year.

If you suspect you might owe taxes, making a RRSP contribution should help lessen the burden, and in some cases will turn your liability into a credit.

Employee / Nanny Filing Deadline for providing a T4:

In all instances, you have to file your T4 information return (T4’s plus T4 Summary) on or before the last day of February following the calendar year that the information return applies to.

If the due date falls on a Saturday, a Sunday, or a public holiday, your return is due the next business day, so for 2015, they are due March 2nd, 2015 as February 28th falls on a Saturday.

The CRA considers your return to be filed on time if they receive it or it is postmarked on or before the due date.  If you fail to file it on time, the CRA will likely assess a penalty.

If you have more than one payroll program account, you will have to file a separate information return for each account.

If you need to file early due to bankruptcy or if your business stops operating, you are required to file within 30 days from the date your business ends.

If the owner of a business dies, the T4 slips and T4 Summary have to be filed within 90 days from the date of death.

You must file information returns by Internet if you file more than 50 information returns (slips) for a calendar year. More information is available at the CRA website, here: Filing Information Returns Electronically (T4/T5 and other types of returns).

General filing information:

* Please keep in mind that if the deadline falls on a weekend or public holiday, for federal income tax purposes, your return is filed on time if it is received or it is postmarked on the next business day.

As well, you should note the difference in “received” dates the CRA adheres to.  The CRA considers something to have been received by a taxpayer once the CRA sends that item out to a known address they have on file.  On the other hand, the CRA does not consider your paperwork or payments as being received until the CRA actually has said cheque or return in hand and stamps it with their postmark.  Mailing something on February 28th which is due February 28th is likely going to result in a penalty for late filing.

* In cases where an individual dies, the final income tax return must generally be filed on or before the regular filing deadline for the year OR six months after the date of death of the individual – whichever is later.

* There will be no income inclusion for an operating cost benefit if an employee fully reimburses the employer for all operating expenses, including GST/HST and PST, relating to the personal use of the automobile within 45 days after the end of the calendar year.

* An employee who has received a low-interest loan from an employer during any part of the year is deemed to have received a taxable employment benefit that is calculated as interest at the CRA’s prescribed rate for the period during which the loan was outstanding. The amount of the benefit is reduced by any interest actually paid on the loan within 30 days of the end of the calendar year.

* Where a family member has loaned funds to another family member or to a family trust, the income attribution rules may not apply on the related investment income where interest on the loan is charged at a rate at least equal to the prescribed rate that was in effect when the loan was made and where interest on the loan is paid by January 30 of the following year.

* In the case of a general corporation, the due date for the balance owing for a taxation year is generally the last day of the second month following the end of the year. In addition, provided certain conditions are met, the due date for the balance owing for CCPCs is the last day of the third month following the end of the taxation year.

* Corporations are required to pay monthly tax installments during the year if their total taxes payable (which is specifically defined) for the current or preceding taxation year is more than $3,000.

* In cases where the taxation year-end of the corporation is the last day of the month, installment payments are due on or before the last day of each month or each quarter. Where the taxation year-end of the corporation does not fall on the last day of the month, the first installment is due one month or quarter less a day from the first day of the corporation’s taxation year-end. Subsequent installments are due on the same day of each of the following months or quarters.

* CCPCs may pay quarterly installments if the following conditions are met:

  • The corporation’s taxable income, and that of any associated corporations, for the current or previous year does not exceed $500,000;
  • The corporation claimed the small business deduction in computing its tax payable for the taxation year or for the preceding taxation year;
  • The corporation’s taxable capital employed in Canada, and that of any associated corporations, does not exceed $10 million in the year or in the preceding taxation year; and
  • Throughout the 12 months ending at the last installment payment date, the corporation made all tax remittances and filings under the Income Tax Act, Employment Insurance Act, Canada Pension Plan or GST/HST section of the Excise Tax Act on time.

* The due date of a GST/HST return is determined by the reporting period. If the reporting period is monthly or quarterly, the GST/HST return must be filed and any amount owing must be remitted no later than one month after the end of the reporting period. If there is an annual reporting period, the GST/HST return must be filed and any amount owing must be remitted no later than three months after the end of the fiscal year. Please note that an individual with business income for income tax purposes, who is also an annual filer with a December 31 fiscal year-end, must file their GST/HST return by June 15 and pay their net GST/HST owing by April 30 to avoid penalties and interest.

* Information returns that include T4, T4A, T4A-NR and T5 must be filed on or before the last day of February in each year and shall be in respect of the preceding calendar year.

* An NR4 Information Return must be filed on or before the last day of March or in the case of an estate or trust, no later than 90 days after the end of the estate’s or trust’s tax year. An NR4 Information Return must be filed in respect of payments such as interest, dividends, royalties or pensions made to non-residents in the preceding calendar year.

* In cases where all members of the partnership are individuals (including trusts), the T5013 is due no later than March 31 of the calendar year following the year in which the partnership’s fiscal period ended. In cases where all members of the partnership are corporations, the T5013 is due no later than five months from the end of the partnership’s fiscal period. In all other cases, the T5013 is due on or before the earlier of (i) the day that is five months after the end of the fiscal period, and (ii) the last day of March in the calendar year immediately following the calendar year in which the fiscal period ended or with which the end of the fiscal period coincides.

 

Good news if you are ready to get filing, because the 2014 General Income Tax and Benefit packages are available at post offices as of early February, and the first day you can use NETFILE was February 9th, 2015.

The Elevator Pitch! How Important Is It?

The elevator pitch, otherwise known as your ability to tell someone what you do for a living in 15-20 seconds without leaving out any critical details.

Wikipedia calls it this; “An elevator pitchelevator speech, or elevator statement is a short summary used to quickly and simply define a person, profession, product, service, organization or event and its value proposition.”

The name “elevator pitch” reflects the idea that it should be possible to deliver the summary in the time span of an elevator ride of around 30 seconds.

The term originates from a scenario of an accidental meeting with someone important in the elevator where after the brief pitch, the other party is interested in learning more. thus continuing the conversation after the elevator ride or through en exchange of a business card or smart phone details.

As a tax consultant, I thought I had the perfect elevator pitch that went something like this; “I help people who have problems with the Canada Revenue Agency (CRA).  I worked in the CRA for over 10-years – pretty much out of university – and worked my way up through the collections division until leaving for the private sector.”

I found it to be too long, and open for interruption so much that I would add details, such as that I completed 3-years of my accounting (CGA) designation and a 3-year MBA before leaving, or that I spent a significant part of my time at the CRA training the staff, handling the most complex accounts in the office and helping improve processes.

Then it became an elevator pitch for a 65-story building ride… To the top and all the way back down to the bottom.

Then I found an article in Forbes magazine which provided 6 alternatives to the elevator pitch so I tried them out to see if they worked better for me.  The list is below:

1. The One-word pitch – for me, it is “TAX”.  Then I watch their eyes gloss over.

2. The Question pitch – “Have you ever had (or have clients who had) problems with the Canada Revenue Agency (or Revenu Quebec, or the IRS, or WSIB, or the CRTC?)

3. The Rhyming pitch – Could not even try this.

4. The Subject line pitch – like sending an email to someone – mine would read something like “Former CRA collections officer helping people with CRA problems.”

5. The Story form pitch – I have thousands of stories… Literally.  I usually break into one of these after my introduction.

6. The Twitter or 140 character or less pitch #WhatIAmAllAbout.   I like this because it’s like using Twitter except that you really cannot tell someone that you “hashtag” Help People.  But it does give you the opportunity to state your case in a brief number of words.

So practice your pitch – no matter which method you choose – and practice them out on people to see if it gets across the message you want it to.  If not, maybe you would benefit from a different pitch or by adding or removing information to your existing pitch.

As for me… “I’m a former CRA officer who knows the CRA collections process, policy and procedures better than they do.  I help people with a variety of tax issues including but not limited to negotiation, payment arrangements, liens, RTP’s assessments, and getting them current and out of debt.  If there is a CRA issue, I have already seen it, and I know how to fix the problem.”

#x-taxer

Others make promises.  I fix problems.

If the conversation continues I explain my services are for individuals, businesses, and professional organizations who cannot proceed further with a client due to their tax issues – ie/ getting a bank loan, renewing a mortgage, confirmation of actual amounts owing before filing for bankruptcy, wage garnishments on employees, or cleaning up past tax issues for separation agreements or divorce.

#inTAXicating

Free consultation.

info@intaxicating.ca

416.833.1581

 

 

 

Reminder: T4’s and T4 Summaries are due February 28th to the Canada Revenue Agency (CRA)

I’m worried.

Not for me, but worried for you. I’m worried that you have forgotten to prepare the T4 for your employee, or nanny, and that you will not be able to submit the T4 with the T4 summary to the Canada Revenue Agency (CRA) by the February 28th deadline.

If you have not completed the T4 or T4 summary yet and are weighing your options, I have some information you need to consider.

First, provided you have been making regular remittances to the CRA, you already have the information you need to submit to the CRA.

Secondly, if you have been making regular remittances the CRA will have sent you a code which allows you to complete the T4 and T4 summary online and which allows you to file online.

Third, if you let the deadline slide by, you are going to pay a penalty.

Say what you will about the Canada Revenue Agency, but they ask and they listen. If you have had the opportunity to attend a CRA information session (or be on a panel as I have) you know that the CRA wants to know what bothers people and how they can improve things. They really do.

In the good old days, when I worked at the CRA, late filing of a T4 was a minimum $100 penalty (plus interest) and late filing of a T4 summary was a minimum $400 penalty to a maximum of $2500.

The CRA has instituted a new administrative policy that applies to certain information returns to ensure that late-filing penalties are charged in a manner that is both fair and reasonable for small businesses. The penalty is the greater of $100 or a penalty determined as follows:

Relieving administrative policy – penalties
Number of information
returns (slips)
Penalty (per day) Maximum penalty
(100 days)
1 – 5 Not applicable $100 flat penalty
6 – 10 $5 $500
11 – 50 $10 $1,000
51 – 500 $15 $1,500
501 – 2,500 $25 $2,500
2,501 – 10,000 $50 $5,000
10,001 or more $75 $7,500

Of course, if you have to get it done by the 28th and you are close on figures, you can always send them your best estimation and amend the return at a later date.  You won’t get hit with the late filing penalties unless your figures are WAY off from the real figures and the CRA feels you sent these numbers to in some way circumvent the rules.  Interest will continue to apply.

Hope you filed on time.

CRA to finally accept payments via Interac Online

Monday 5 October 2009

 

The Canada Revenue Agency (CRA) has integrated Interac Online, an internet payment method which enables Canadians to make income tax payments directly from their bank accounts, without disclosing personal financial data.

As a result of the initiative, starting October 5th 2009, taxpayers and businesses will be able to pay online for various types of taxes, including income taxes, corporate taxes, payroll taxes, and GST, as well as make one-time payments and instalments.  Interac Online works with existing online banking services of participating Canadian financial institutions.

Public Works and Government Services Canada, which establishes banking services for the Government of Canada, has made it possible for the CRA to implement this new service.

Finally!