A vast majority of Canadians pay their fair share of taxes, but those who don’t put an increased burden on the rest of us. That is why the Canada Revenue Agency (CRA) has implemented initiatives to help Canadians participate in the efforts to help fight offshore tax avoidance and evasion. The Offshore Tax Informant Program…
The following are tips to keep the CRA’s collections department happy.
This list in not fully inclusive of everything that you can do because you cannot send them gifts, they have to reject or toss them, and if you do their work for them – they might like that for a bit – until there are no more accounts, and then they will have no more work to do, and then no job.
So here are a few tips to keep CRA happy…
- Communicate, communicate, communicate. If they have to contact you, they’re already angry.
- Don’t be a jerk on the phone to them. Everything you say goes into a permanent diary and that diary is summarized semi-annually. You don’t want anyone who accesses your account to think you’re a jerk
- Don’t accuse them of being out to get you… They likely have 400-500 accounts and their goal is to collect some, write some off and let the others pay or go bankrupt. Just show them some progress on any of those fronts and you’ll be in much better standing.
- Ask for the best and lowest settlement offer. The CRA does NOT do that unless it is through insolvency or a formal proposal in bankruptcy. The IRS settles debts, but this is not the IRS… The CRA is WAY better!
- If you enter into a payment arrangement, ensure there are sufficient funds in the account to pay the cheques. If a cheque is returned NSF (not sufficient funds), then the CRA collections officer will take immediate collection actions and getting those Requirements to Pay removed can be next to impossible.
- Keep current!!! Whether during the period of a payment arrangement, or just through discussions with the CRA make sure you are up-to-date on all filings and payments (including GST/HST, income tax, payroll taxes, etc). If you fail to remain current, the CRA can – and likely will – end the payment arrangement and pressure you for more.
- Understand that the CRA is not your bank, and treat them that way. At a bank, you are earning credit, but at the CRA, in collections, you are paying 10% interest compounding daily… It’s not in your best interest to take your time re-paying them.
- If you have nothing to hide (and even if you do have something to hide), be honest with the CRA collections officer. Things you say may cause the CRA collections officer to become concerned.
- Provide the information that is requested by the CRA collections officer. If the CRA collections officer trusts you, he/she will be more likely to exercise discretion before pressing confirm on that Requirement To Pay.
Knowledge First Financial urges parents to apply for BCTESG
1 in 5 BC children have received the $1,200 education grant
Approximately 80% of eligible children have yet to receive the $1,200 British Columbia Education Savings Grant. Knowledge First Financial, a Canadian RESP Provider, is urging parents to apply now and enjoy all the benefits of an RESP including compound, tax-free growth and the Canada Education Savings Grant (CESG) of up to $7,200. That means up to $8,400 of ‘free’ money for each child to help pay for post-secondary education for BC parents.
More than ever, post-secondary students have more freedom to choose programs and schools, more time to focus on studies and explore new opportunities, less stress and less debt thanks to the savings accrued from RESPs. Knowledge First Financial supports students in their post-secondary studies – in fact, when the BCTESG was introduced in 2015, Knowledge First Financial was one of the first RESP providers to support it.
If you’re the parent of a child born in BC in 2006 or later, here are three things to know about BCTESG:
What is BCTESG?
The British Columbia Training and Education Savings Grant is a $1,200 grant for post-secondary education established in 2015. To be eligible, parents or guardians and children must be residents of BC, and possess a Social Insurance Number.
How do I apply?
Firstly, you will need a RESP from a provider who can access the BCTESG – a sales representative from Knowledge Financial First can help set this up for you. You will be asked for proof of residency, such as a driver’s license, BCID card, BC Service Cards or a recent utility bill upon application.
When do I apply?
You can apply for BCTESG as soon as your child turns six up until the day before your child’s ninth birthday, however Knowledge First Financial recommends that parents apply as soon as possible. Deadlines for children born before August 15, 2009 are slightly different:
- Children born in 2006: Apply between August 15, 2016 and August 14, 2019
- Children born in 2007, 2008, before August 15, 2009: Apply between August 15, 2015 and August 14, 2018
Why apply now?
You’ll receive the education grants sooner and your savings will have more time to grow. Learn more about why an RESP is a smart way to invest in a child’s future by setting up an appointment with a Knowledge First Financial sales representative today.
About Knowledge First Financial Inc.
Knowledge First Financial Inc. is a wholly owned subsidiary of the Knowledge First Foundation and is the investment fund manager, administrator and distributor of the education savings plans offered by Knowledge First Foundation. For more information about education savings plans from Knowledge First Financial Inc., please visit knowledgefirstfinancial.ca or refer to our prospectus.
As of April 30, 2016, Knowledge First Financial manages $3.62 billion in assets on behalf of more than 250,000 customers.
Knowledge First Financial® is a registered trademark of Knowledge First Financial Inc.
This post was written by Daryl Shriver, and he can be found through his Twitter account.
Prince Edward Island will be raising their Harmonized Sales Tax (HST) to 15% (from 14%) beginning October 1, 2016.
This decision was made on April 19, 2016, when the PEI Government announced its intention to increase the Provincial rate of the HST (PST) to 10% effective October 1, 2016, resulting in an HST rate of 15% when added to the 5% GST.
PEI set out transitional rules to determine which rate – the existing 14% HST, or the new 15% HST – should apply in respect of transactions that straddle October 1st and under these rules suppliers would generally be required to charge the 15% HST on any consideration that becomes due without having been paid, or is paid without having become due, on or after October 1, 2016, for taxable supplies of property or services.
Under the Excise Tax Act (ETA), the consideration, or a part thereof, for a taxable supply generally becomes due on the earliest of:
- The day the supplier first issues an invoice in respect of the supply for that consideration or part thereof;
- The date of that invoice;
- The day the supplier would have, but for an undue delay, issued an invoice in respect of the supply for that consideration or part thereof; and
- The day the recipient of the supply is required to pay that consideration or part thereof to the supplier pursuant to a written agreement.
Regarding real property transactions, supplies of services are to charge the 15% HST rate to any consideration that becomes due without having been paid, or is paid without having become due, on or after October 1, 2016.
Conversely, the 14% HST rate applies to any consideration that becomes due or is paid before October 1, 2016.
Just wanted to drop a quick note to all of you who called, emailed and hit me up on the blog or on social media that we’re back to work and trying to get to everyone as soon as possible.
If anyone has an urgent matter, please send an email to email@example.com, in the subject line, please write “urgent” and that will be the top priority.
For new readers of this blog or who are seeing this blog through our website, here is what you need to know!
inTAXicating is a Canadian tax consulting business which provides solutions to Canadian Tax problems predominantly related to the Canada Revenue Agency (CRA), but not limited to the CRA.
With over 20-years experience in Canadian Tax (throw in some IRS tax, FATCA, Revenu Quebec, Cross-border matters and WSIB) combined with over 10-years working in the CRA in their collections division, you have the experience and expertise that no-one else can boast to have.
Our model is simple! Give you the truth based on the facts.
You get a free consultation and if it is determined that you can handle it best, or if your questions are quickly answered, then you are on your way.
If there are more complex matters which may eventually require greater expertise, then you have the option to handle you tax matters up to that point and then hand it over, or you may wish to hand it over right away…
It’s your taxes and you need to know what is being done and how to properly handle them going forward.
There are no magical cures for tax problems which took years and years to grow, so if anyone promises you a magic bullet, proceed with caution.
inTAXicating also believes that everyone who earns money needs to pay their taxes, however, they should pay what they owe, and in circumstances where there is no ability to pay, the government should understand that and give you a break.
No questions are bad questions.
I do not believe in the “natural person” being exempt from taxes because the CRA does not believe it, but I have spoken to many, many “de-taxers” and enjoy the conversations and helping them through the CRA’s prosecutions.
We specialize in all matters relating to CRA collections, specifically Directors Liability, Taxpayers Relief, s160 assessments, liens, and garnishments, RTP’s.
We provide audit representation, accounting (through a CA), as well as presenting the options to solve all tax matters including the ugliest and most complex tax matters. The messier the better!
In short, we want to help.
15 minute Consultation / responding to questions via email – free
Meeting – $250 plus HST (one hour meeting – detailed summary and recommended plan of action included)
Engagement – either hourly @ $250/hour or a fixed fee depending on the complexity and amount of work involved.
Accounting – best rates possible also related to the amount of work involved.
We try to stick to this model as best as humanly possible because it’s your money and you work hard for it, so you should not have to throw it away.
The Canada Revenue Agency (CRA) has posted on their website that they will revoke the registration of ACTLAP Children’s Foundation (A.C.F.), a charity based in North York, Ontario, effective July 9, 2016. The notice of revocation has been published in the Canada Gazette.
On May 3, 2016 the CRA issued a notice of intention to revoke the registration of the ACTLAP Children’s Foundation (A.C.F.) as a charity, in accordance with subsection 168(1) of the Income Tax Act (The Act). The letter stated, in part, that:
“The audit by the Canada Revenue Agency (CRA) has revealed that the Organization operated primarily for the non-charitable purpose of furthering a tax shelter donation arrangement, the Pharma Gifts International Inc. program. The Organization agreed to accept alleged gifts of property from participants and to act as a receipting agent for this donation arrangement. For the period of June 16, 2012 to June 15, 2014, the Organization improperly issued receipts totalling over $64 million for purported donations of cash and pharmaceuticals, which were not legitimate gifts. Of the $1,724,814 in cash contributions it received, the Organization paid $1,289,385 to the promoters of the tax shelter. Of the $62,315,818 million [sic] worth of tax receipts issued for the gifts of pharmaceuticals, the CRA determined that the Organization significantly over-reported the value of the alleged property, resulting in grossly inflated tax receipts to participants.
The audit has shown that the Organization has failed to comply with several requirements set out in the Act. In particular, the Organization issued donation receipts for transactions that did not qualify as gifts, issued receipts otherwise than in accordance with the Act and its Regulations, did not devote all its resources to charitable activities and failed to maintain proper books and records. For all of these reasons, and for each reason alone, it is the position of the CRA that the Organization no longer meets the requirements necessary for charitable registration and should be revoked in the manner described in subsection 168(1) of the Act.”
Registered charities perform valuable work in our communities, and Canadians support this work in many ways. The CRA regulates these organizations through the Act and is committed to ensuring that they operate in compliance with the law. When a registered charity is found not to comply with its legal obligations, the CRA may revoke its registration under the Act.
Registered charities receive generous tax incentives under the Act including the ability to issue official donation receipts. To maintain this privilege, charities must continue to meet all the requirements of the Act.
The CRA is committed to preserving the integrity of Canada’s tax system.
The CRA audits every gifting tax shelter that offers official donation receipts in excess of the value of any property donated.
The CRA has also repeatedly warned Canadians of the consequences of participating in abusive tax shelters that it holds to be non-compliant with the Act.
There is a substantial amount of information on the CRA’s website and the CRA has published information, including warnings about tax shelters and donating wisely, in a variety of newspapers, magazines and various other media sources.
For more information, go to Tax shelters and Donor Beware, a special report from the Office of the Taxpayers’ Ombudsman.
An organization that has had its registration as a charity revoked can no longer issue donation receipts for income tax purposes and is no longer a qualified donee under the Act. The organization is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.
For more information about the registration of Canadian charities or to find out more about a registered charity, go to the CRA’s Charities and Giving webpage.
Quick Facts on charities:
• As of March 31, 2016, there were 86,191 registered charities across Canada.
• Canada’s approximately 86,000 registered charities issued receipts worth more than $15.7 billion in 2014.
• In the 2015-16 fiscal year (April 1 to March 31), the CRA’s Charities Directorate completed 726 audits of registered charities chosen using a variety of methods – including random selection, follow-up on possible non-compliance or complaints, and based on a review of annual information returns. During that same period, 20 charities had their registered status revoked by the CRA as a result of an audit.
• As of March 31st, 2015, the CRA reassessed more than 195,000 taxpayer returns, denying in excess of $6.6 billion in donation claims mostly due to tax shelter gifting arrangements.
• A copy of the Notice of Intention to Revoke and other letters relating to the grounds for revocation are available to the public on request, in the language in which they were originally written, by going to Request for registered charity information.
Canada Revenue Charities Listings: http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html
Charities Media Kit: http://www.cra-arc.gc.ca/chrts-gvng/md-kt/menu-eng.html
To receive updates when new information is added to the CRA website, you can:
• Follow the CRA on Twitter – @CanRevAgency.
• Subscribe to a CRA electronic mailing list.
• Add the CRA’s RSS feeds to your feed reader.
• You can also watch the CRA’s tax-related videos on YouTube.
In a nutshell, this charity received $1,724,814 in cash contributions.
It paid $1,289,385 of that money to the promoters of the tax shelter who were bringing in the people to donate.
This charity issued donation receipts totalling $62,315,818 million dollars.
It failed to keep adequate books and records.
It failed to devote 100% of its efforts to charitable work.
As a result, any of the taxpayers who have filed their tax returns claiming any of the donation deductions from this charity should hope that the CRA offers them a deal to accept the money donated on a dollar for dollar basis, or they should use the Voluntary Disclosure Program to amend their returns! (Just not the current year return).
Note: Please use common sense when making a donation! If you make a $100 donation and receive a donation receipt for anything more than that amount understand that the CRA will deny it… eventually.
The Canada Revenue Agency (CRA) has put together a list of some things to avoid this tax-filing season. Follow these 5 tips and they will save you time, stress and money!
- File your tax returns! On time.
Many people are of the belief that they do not need to file a tax return (personal tax – T1 – GST/HST, Corporate Tax – T2 – or payroll taxes) because either they do not have any income to report or because they had no activities in that period / year.
Failing to file a tax return is a criminal offense, whereas filing a return but owing a balance is not. Additionally, once a due date for a return has passed the CRA automatically charges a Late filing Penalty (LFP) once it has been filed. It’s money you do not need to be paying.
Additionally, even if you have no income to report, you still have to file a return because you might be eligible for a refund, for Input Tax Credits (ITC’s) and for child tax benefits.
Even if you don’t have all your slips / information, file because you can always amend the returns after – but don’t forget information on purpose because the CRA is all too wise for that trick and they will still assess LFP’s.
2. Gather as much information as possible (all year).
If you have not received, have lost, or misplaced any slips for the taxation year you are filing for, try to get it. If it’s a T4 slip, as your employer / HR department. If it’s an investment slip, as your investment dealer, or log onto your investment dealer’s website and print off a copy.
If you have already registered to the CRA’s My Account you have access to electronic copies of your slips. Your employer / investment dealer must provide you a copy and a copy to the CRA of each slip.
If you are missing information, use any documents you have and enter estimated amounts.
New for 2016 is the CRA’s Auto-fill service which allows taxpayers who file their returns online to automatically fill in certain parts of their income tax and benefit return. In order to use the service, you must be fully registered for My Account. For more information, go to www.cra.gc.ca/auto-fill.
If you were quick to file your personal tax return and then a new or amended tax slip arrives, My Account has a “Change My Return” feature which is very helpful, or you can go old-school and complete Form T1-ADJ, T1 Adjustment Request, and send the completed for to your local tax centre.
3. Know your credits!
Don’t rely on your accountant or tax preparation firm to know what you are eligible for, especially if you only see them during tax time when they are already busy.
Without the benefit of a relationship with your tax professionals, they are just filing the return for you based on the information you give then, and would never know what credits you are eligible for or what slips are missing, unless you tell them.
The CRA posts information about new tax credits, benefits, and deductions on their website, some of which may apply to your tax situation, so before filing your return or before signing it confirming that it is accurate, go to www.cra.gc.ca/getready to learn about the new and existing tax measures.
Remember, once you sign your tax return, the CRA believes that you have gone through the return and agree with all the information on that return. If something is denied by the CRA, you cannot blame your accountant / tax preparer.
4. Use someone you trust!
A common excuse given to the CRA when tax credits and deductions are denied is that your accountant or tax preparer did it and said it was okay. This may work to convince the CRA that you are not knowingly trying to commit fraud, but any infraction is noted in your permanent tax file and going forward may result in the CRA not giving you the benefit of the doubt where there are disputes.
If you’re concerned that you are paying too much tax, or paying to much to your accountant, or that your tax professional is recommending convoluted tax schemes involving holding companies, incorporation and other complicated processes, it could be to pad their bottom line, or because they have no idea what they’re doing.
It’s okay to ask.
If you don’t like the answer, ask again, or ask someone else.
The last thing you need is to find out that a complicated structure set up to help you pay less taxes, costs you a lot of money each year and then will be denied by the CRA – costing you penalties and interest – not the mastermind behind the scheme.
5. Donate wisely!
With all the tax shelter scams and schemes floating around, be very careful when donating.
Make sure the charity issuing the tax receipt is registered with the CRA. That is the first step, but there is an additional step which must be adhered to, and that is the common sense rule. If you donate $100, and are provided a tax receipt for $1000, you likely need to run and not include that slip, or include it for the amount you donated.
The CRA has been under a lot of criticism lately for their treatment of Canadian taxpayers who had donated to tax schemes like GLGI, but the issue here likely will be solved in court. The participants have argued that the CRA provided GLGI with their charitable status, thus endorsing the scheme, while the CRA has responded with the fact that they have warned Canadians for a long time about donation schemes and that they provide the registered charity number to charities which comply with the CRA’s requirements and the CRA was not aware of the full extent of the scam until they investigated.
It’s a hot button issue which can be avoided by not trying to reduce taxes by fudging donation receipts.
If, at any time, you owe a balance to the CRA, make sure to keep in touch with the collector, respond to all notices and change your address with them if you have moved.
I also disagree with the CRA’s Direct Deposit initiative because it provides your main bank account to the CRA so that their collectors can take legal actions right away if you do not pay your balance.