Working in the Canada Revenue Agency for almost 11-years, I learned a thing or two about how the CRA operates as well as what is a red flag for them and what the CRA often let’s slide. It helps when I negotiate with them that I know their policies, procedures and how to navigate their systems as well as they do, or even better. I’ve used this knowledge to help my clients save millions of dollars of taxes.
With that in mind, I want to help you save unnecessary expenses, so I decided to reveal the 8 Biggest Taxation No-No’s EVER.
8. Try and do it yourself. Taxation is a complicated topic for many and if you don’t live and breathe tax then you should consider either hiring someone to help you along or at the very least hire someone to set you up correctly and who will take the time to learn about you and your business so that you are getting all of the tax deductions and credits available to you all the time.
7. Think that you are above taxation. Everyone pays taxes no matter their income level; whether it be income tax, payroll tax, or consumption tax. To think that there is a magic “Pay no tax” card is a huge mistake and the CRA does not take “detaxers” or the underground economy lightly..
6. Brag about not paying taxes / scamming the government. Our tax system here in Canada is a self-assessing system with the government’s responsibility being the checks and balances. It’s not that they don’t trust you but… They don’t trust you, which is why they have huge departments responsible for catching the tax cheats. If the government doesn’t get you, your ego might;
5. Post information online about yourself or your business and think that the government will not see it and use it against you. The “government” are a bunch of people like you and I who are trying to make a living. If you claim you are suffering from financial hardship yet post pictures on Facebook showing yourself living it up, or if you claim to be Canadian and your profile states that you are born in the US, the collectors or auditors will find it and us it against you.
4. File late, miss installment payments or fail to make remittances. All this will do is add penalties and interest onto your tax account and there are very few excuses the government will accept to have them reversed or cancelled. Many large tax debts start in just this way.
3. Carry a balance. If at all possible it is critical to make sure that you do not carry a balance with the CRA. With interest being charged at a floating rate of just over 10%, compounding daily, your balance can grow at a shocking rate. The CRA is not a bank and you should not think it’s okay to treat their debt as a bank loan.
2. Don’t be afraid to search online for your tax advice. Not only has the CRA moved to strengthen their online presence but there are a lot of professionals online who have posted their experiences with the CRA and steps they took to resolve tax problems for themselves and their clients. Anyone suggestion otherwise is doing so to avoid you from finding out there are other – better – tax solution providers in Canada.
1. Thinking that anyone can help you. This is the absolute biggest tax no-no I have encountered in 17-years of taxation. If you have an electrical problem at home, do you call a plumber? Would you ask a dentist to perform open-heart surgery? How about asking a former auditor to help you with a collections problem, or an appeals officer to help you correct your payroll nanny account issues? How about going to an Insolvency firm to have a lien removed from you house which was placed there by CRA collections?
It doesn’t make sense but don’t get me wrong. If you have created a tax crime, such as tax evasion, you will need a tax lawyer, and if you need tax returns prepared, they need to be done by an accountant, and a former CRA auditor is the right solution if you have a difficult, complex corporate tax audit underway,
In taxation it is critical that you have experience on your side when you work to resolve your tax issues and understanding the way the CRA operates is more important than you could imagine.
Tax debts begin with audit or compliance issues.
Then they go to collections.
Collections leads to enforcement – garnishments, requirements to pay (RTP), liens, seizures, director’s liability, and much more.
You need experienced former collections staff to help you, and with almost 11-years of progressive collections experience in all areas, from collector to resource officer, to team leader, believe me when I say that experience helps!
When your representative knows more than the collector, or trained that collector, you know you have the best representation possible.
To leave your $250,000 tax liability to anyone else would keep me up at night too.