It’s hot outside! It’s the best time to think about solving that nagging tax issue.

If you live in Southern Ontario, you are in the middle of a heat wave.  Summer came back bigger, badder, stronger than it had all summer, and with humidex readings in the low 40’s, all the talk is about cooling off and extending the cottage season.

And there is nothing wrong with it.

But as the calendar creeps towards October, we enter the last quarter of the year and this is traditionally the best time of year to finally seek resolution on that nagging Canada Revenue Agency (CRA) tax problem.

The tax problem that causes you so much stress that you cannot open the brown envelopes from the CRA.

The tax problem which resulted in the CRA freezing your bank account or garnishing your wages.

That nagging tax issue which prompted the CRA to register a lien against your property.

The one that prevents you from having a full night’s sleep.

Yes, that one.

Well worry no more because help is here.

No matter how big, or small, complex or simple, we have seen them all, and resolved them all.  At the very least, after a meeting with us, you will understand the truth behind your tax problem – whether you have a chance of having it overturned or whether you actually are on the hook for the balance.

After a meeting with us, you can finally start on the pathway to resolving your tax troubles and no longer worry that when you try to use your debit card it might not work because the CRA froze your bank account and withdrew all of the funds.

inTAXicating

info@intaxicating.ca

Toronto-based.  Canada-wide Tax Liability Specialists.

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Canada Revenue Agency Offering to Close Dormant GST Accounts

[109/365] Taxation.
Taxation. (Photo credit: kardboard604)

I came across an interesting article on the H&R Block blog site regarding the Canada Revenue Agency (CRA) and their upcoming strategy regarding dormant GST accounts.  The original article can be found right here.  Having spent almost 11-years working for the CRA – almost 2 of those years dedicated to GST, I am very familiar with the problem the CRA faces by having many GST accounts open and unaccounted for.  When the CRA is unsure as to whether the account is open, active and not filing, or open, inactive and never used can often be difficult to determine is the phone number and address on file at the time of registration are no longer applicable.

As many of you are already aware, not filing GST returns is a criminal offence under the Excise Tax Act for which the CRA can, and will prosecute taxpayers.  When the CRA moves to action on these accounts their intention is in their approach so if they suspect the file was opened in error, or can be sure it is not required then they will call, or have a field officer drop by the residence or business to ask about the account.  If, however, they have reason to believe that the account is open and just not-filing, maybe as a result of a telephone conversation, then they approach this completely differently.

In this case, the CRA will begin to collect information for their permanent diary and see how the story differs from the information provided by the taxpayer.  Once they notice a difference, they move in with a Demand to File, which is an indication that they intend to prosecute.

The CRA understand that taxpayers register GST accounts then move and fail to update their address with the CRA (HUGE mistake!) at which point the CRA needs to determine if the account is inactive or a non-filer.  If this is you, or someone you know, it’s best to take care of this right now.

A common example would be this; a taxpayer opened a business which operated as a sole proprietorship (SoleProp) for 18-months until it incorporated.  The new corporation (NewCorp) registered a GST account and began to make its quarterly installments, while the SoleProp no longer had any income attached to it, but instead of closing it, the owner filed nil returns for the next 3-years.

This is an example of an account the CRA would happily close over the phone because the trail is clear and both are current.

Normally, you need to complete a RC145 Form (used to be a GST11)– Request to Close Business Number Program Accounts in order to close your GST account, however under this program, the CRA will close the account if you give them permission over the phone.

Whether the account is closed or not, you still have to file all your outstanding GST/HST returns and pay any amounts owing up until the day your business ends because closing your account does not exempt you from paying any GST owed back to the CRA.  In addition, if you have business assets and shut down the operation, the assets are deemed disposed of at Fair Market Value (FMV) on the day you stopped operating so you will need to calculate the GST on the value of your assets, too.  You will also want to make sure that you capture any bad debts on that final GST return if you have not previously.

If you sell to a purchaser who is a GST registrant and who continues to operate the business, you can jointly file a Form GST44, Election Concerning the Acquisition of a Business or Part of a Business, so the purchaser does not have to collect and you do not have to pay GST.

The important thing to remember about the GST is that once you open an account it remains open until you take action to close it.  If you have a dormant GST account and the CRA is calling you, it will save you time to answer the phone and provide permission to close it.  If you fail to close it and the CRA is unable to get in touch with you, they can enforce collection actions against you and raise director’s liability to hold you personally liable to corporate debts, as well as the previously mentioned criminal prosecution.  Stopping this kind of action can be difficult once the CRA has determined that you are hiding something from them.

Do not wait for the CRA to come collecting their returns or their GST, but if you are already embroiled into a battle with the CRA over notional assessments or GST amounts owing, or worse if you have received a Demand to File notice from the CRA that they are intending to assess you as a director of the corporation and are seeking a due diligence defence, you need professional help right away.

I can help!

Just visit http://www.intaxicating.ca and see how Intaxicating Tax Services can assist you in all your CRA matters.  Passionate about Tax.  Passionate about helping people.

info@intaxicating.ca

Canadian Live-in Caregiver Program Services: Why using Service Canada’s Contract makes sense

With Canada’s Temporary Foreign Worker Program under attack again as a result of RBC’s announced plan to lay off Canadian employees and hire employees overseas, it’s important to understand that this program also has the Canadian Live-in Caregiver Program (LICP) as a part of it, and that program is essential to working Canadian parents who need to hire a Live-in Caregiver (nanny) from overseas for cost efficient reasons.  The LICP provides opportunity for parents to sponsor and bring trained, educated nannies from overseas, who live in their homes and work for them at a wage very close to the minimum wage.

At the outset, many feel that these nannies are being taken advantage of, however, I see it differently.  Yes, there are employers who ask their employees to work long hours, and do tasks which are outside of the normal requrements of the program, but there are also opportunities for these nannies to speak up and have this addressed, and the outcome is that the employer is banned from using the program.  Times have changed and thankfully this government has also changed the program to make it harder for employers to scam the system and also more difficult for employees to scam their employers.  Of course, there are exceptions…

One big way that employers and employees can start this relationship on the right foot is by following the rules of the LICP, and making sure that the employer and the employee know exactly what they are required to be doing during their time in the program and also to make sure that the employee and employer are also moving forward with plan for once the program ends so that the employee is making smart decisions about their future and the employer is able to assist and know where they stand regarding their caregiver.

At Intaxicating Tax Solutions, we are on the leading edge around requirements and changes to this program as we offer assistance at every stage of the process – from deciding whether to sponsor a nanny through this program, or hiring a live-out caregiver already in Canada, to the setting up and payroll account with the Canada Revenue Agency (CRA), networking, course suggestions for caregivers and dispute resolution surrounding tasks, requirements and working hours.  Our website is www.intaxicating.ca and you can find plenty of materials written by us around the program on the web.

With all that being said, I thought it might be useful to post the link to Service Canada‘s Live-In Caregiver contract.

The best way to get a working arrangement off on the right foot is by making sure that the employer and employee are both clear around requirements and what happens if these requirements need to be adjusted.  As a contract is a requiremt of the program for sponsoring a live-in caregiver, those hiring live-out caregivers and those nannies who are living in, but not through a formal program like the LICP, also benefit from having a formal contract in place to keep requirements clear.

The contact forms the basis of a legal agreement between employer and employee as to what is expected and agreed upon by both sides and is used in case of disagreement to support the previously agreed upon terms.  Before employment begins both parties have to agree to all the work arrangements in the contract which should outline every detail from hours worked, to amounts renumerated to specific tasks and vacation pay.  It’s like going to get a job anywhere else in the world, where you sign the contact before your employer agrees to hire you and having a formalized contract as part of this program helps prevent employers from taking advantage of nannies and allows nannies to understand what they are getting into to before they agree to start work.

Too often I hear and read about employers who think their live-in nannies are on call 24/7 at their disposal to take care of them and their kids, and their house and their pets…  I also hear and read in parenting groups about employers placing curfews on their nannies, or making them address you as Mr. or Mrs. like they are a servant. Most of it is not allowed and some of it is just not right. If you accepted a job working at a top law firm, or in the warehouse of WalMart would you allow for them to treat you like that?  I suspect that answer is no.

Now that the contract is part of the application process – prospective nannies who come to apply to the program here, http://www.cic.gc.ca/english/work/caregiver/apply-how.asp, now understand that there are tight guidelines governing their requirements and rights, as well as the employers.  Nannies MUST sign a written contract with their future employer, and the employer must also sign the contact which is them submitted together with the positive Labour Market Opinion (LMO).

The positive LMO is issued to the employer by the government after a lengthy review of the submitted documents where the information is verified, a phone interview is conducted, and if everything checks out, the employer is deemed to be a suitable employer who has followed all the government requirements and regulations for the LICP.  Employers must also provide to the government their payroll BN number with the CRA, and have available suitable space in their home for a nanny to live, and prove that they have children in need of caring for and the financial capabilities to support a nanny.

The contract must be the same employment contract submitted to HRSDC/SC by your employer, unless you provide an explanation of any changes (for example, a new start date).

The written employment contract will ensure there is a fair working arrangement between you and your employer. The employment contract must demonstrate that the Live-in Caregiver Program requirements are met by including a description of:

•mandatory employer-paid benefits, including:

◦transportation to Canada from your country of permanent residence or the country of habitual residence to the location of work in Canada

◦medical insurance coverage provided from the date of your arrival until you are eligible for provincial health insurance

◦workplace safety insurance coverage for the duration of the employment

◦all recruitment fees, including any amount payable to a third-party recruiter or agents hired by the employer that would otherwise have been charged to you

•job duties

•hours of work

•wages

•accommodation arrangements (including room and board)

•holiday and sick leave entitlements

•termination and resignation terms

The contract the government is expecting to see does not have to look exactly like the one provided for in the link – that one is merely a template – but it must contain all the information and clauses indicated as mandatory and the use of an alternate contract format may cause delays to the processing of the LMO application as HRSDC and Service Canada officers will need to determine if the contract complies with LCP requirements.  A copy of that contract can be found here.

Before you jump into hiring an employee through the Canadian Live-in Caregiver program, or someone already in Canada, make sure that you have all the requirements covered and that you and your employer are on the same page.  If you would like further information or have questions, please feel free to post them in the comment section, or contact us at info@intaxicatingtaxservices.ca.  You can find details around our T4/T4 summary services, our payroll services or our consultation services on our website or by contacting us.