What Are Your Rights and Responsibilities Regarding CRA Tax Audit?

If you are a small or medium-sized businessman or individual contractor in Canada, then experiencing CRA tax audit us pretty common and normal. Every year, the concerned authority sends capable auditors and audit the books and financial details of businesses all over the country. This is done to ensure that the tax system is fair to everyone in the country. To that end, if you think that the tax audit and assessment has not been done properly in your case, it is very easy and advisable to go for CRA Tax Remediation and Appeals in North York Ontario.

The appeal and its scope – During this appeal, you will be able to inform the concerned authority about your doubts and questions and they will listen to them and take the relevant steps. If the auditor has been wrong or the authority thinks that, your complaint is valid, then you will receive compensation. On the other hand, if your appeal turns out to be incorrect, you have to pay the excess tax amount as well. In short, you have the chance to point out the mistake and make things right. To be able to do this, you need to have some basic idea and information on the subject, along with your right and responsibilities in this context.

Your rights – If you know what rights you have as a taxpayer, then no one can dupe you in any way. On the other hand, if you are aware of your responsibilities, then messing things up won’t be an issue which will make the whole process a lot easier than ever before. It is your right to be served by the CRA with utmost professionalism, courtesy, accuracy and fairness. To that end, the Taxpayer Bill of Rights includes Commitment to Small Business along with 16 separate rights for you.

Your responsibilities – As the taxpayer, it is your responsibility to keep all the required books and records. This way, you will be able to understand and deal with your tax-related obligations and entitlements. These records should be kept for at least 6 years after they have been created. If you use a computer for this record keeping purpose, then all records should be kept in a medium or format that is electronically readable, along with the records kept in paper. Additionally, you must provide all the relevant details, books and records to the auditor, along with giving correct and timely explanations to all the questions by the auditor.

By following your responsibilities and knowing your rights, it will be possible to handle CRA tax audit, CRA Tax Remediation and Appeals in North York Ontario with ease.

The Importance of CRA Tax Remediation and Appeal for Your Business

Being the owner of a business does not only mean earning money and getting richer every day. The process consists of a lot of stages, strategies, struggles and involvement and not just dealing with the finances. Moreover, handling the finance of a business requires both knowledge and experience in professional accounting which can turn out to be pretty tough without having the proper degree and practice. The CRA or Canada Revenue Agency check the financial and transactional records of small and medium-sized business to ensure that not tax fraud or financial deception has happened. Once the audit is done by the authority, if application, you can go for CRA Tax Remediation and Appeals.

Preparation is Always Rewarded – This remediation and appeal process is about questioning the assessment done by the CRA. It may seem that going the remediation and appeal way is pointless, because it will yield no results, but the reality is quite different. If you are transparent and have documents proving all your financial trysts, then the audit will be fair, but mistakes can happen and in certain cases, they mean you have a chance to appeal the decision resulting in financial benefits. So, if you are seeking professional help for CRA Tax Remediation and Appeals in North York Ontario, it can prove to be a wise decision.

Professional Help and Its Premise – Running a business requires fund and its ample expense. In such a situation, the requirement for additional expense in the form of an accountant or financial consultant helping with CRA may seem unnecessary from the outset, but the reality is quite different. The benefits of hiring a consultant will outweigh the expense by a huge margin which means seeking professional help in this context will mean a smart investment. Despite this rosy picture, you need to remember that, appeal should only be done when you are sure about winning and befitting from the decision. Appealing for just the sake of it won’t be a smart decision. This is why, hiring a competent and experienced professional is so crucial, because that person can provide the advice and suggestion regarding CRA Tax Remediation and Appeals in North York Ontario which may prove to be invaluable.

Selecting The Right Candidate – There are a large number of financial consultants available to help with the CRA tax audit and that can be quite confusing. For best results, you need to select the most suitable candidate. Making this selection can prove to be a time-consuming and long process, but the outcome will be worthwhile.

Penalties Associated with the Late Filing of CRA Taxes

The CRA does not sympathize with a defaulting taxpayer in all circumstances. Though there are certain exceptions which the tax agency takes into consideration, the CRA demands an explanation for the inability to file the tax returns or the failure to pay the tax amount within a given deadline in all the cases.

In case the reasons are genuine, the CRA gives it a thought to waiving the interest amounts or the penalty levied on a taxpayer. However, it depends upon the approval of the Taxpayer Relief Application (TRA). In case it is rejected after a thorough assessment, a taxpayer is required to pay their CRA late filing penalty.

As far as the CRA late filing penalty is concerned, it depends on whether one reports corporate taxes or personal taxes. The repeated failure to file a tax return in a timely manner can lead to a severe form of penalty as it is managed by the federal administrations.  Only Quebec residents are exempted for this kind of penalty. Normally, a person is charged with this form of penalty if they fail to pay the taxes for the current year in addition to the failure to file tax returns for three previous years.

The territorial government or the provincial government may charge as many as ten per cent of the outstanding amount, regardless of whether the pending amount belongs to the current year or a previous year.

However, the CRA can cancel the penalty linked to one’s CRA late filing if one takes the initiative to come out willingly and discloses one’s undisclosed income. In case of non-resident Canadians, the CRA will penalize them only if they fail to report their income despite being eligible for the payment of territorial or provincial taxes.

While the tax guidelines set by the CRA necessitates the bigger corporations to file their tax returns in a timely manner via T2 Corporation Income Tax Return, a failure to do so can trigger a huge penalty which may be applicable to the late returns filed up to 40 months. Also, the agency is critical about incorrect information based on false financial statements. The CRA usually deals with such cases with its stringent rules.

Are you facing tax troubles or are you worried about one? Do not worry. Our services related to CRA tax remediation and appeals in North York, Ontario can help you find out an amicable solution to the problem related to the late filing of CRA taxes. Contact us now!

A Guide to Dealing with a CRA Frozen Bank Account

In Canada, the self-employed individuals who do not pay taxes in a timely manner are subjected to the legal notice letters from the CRA. A failure to reply to such notices translates into the seizure of the assets of the concerned individual.

At first, the CRA freezes the bank account of an individual to draw their attention to the non-payment of taxes. Usually, this happens when a potential taxpayer ignores the pay notices sent by the CRA repeatedly. It can also happen in the event of not filing the taxes for more than 12 months. In instances such as these, the tax officials get the impression that an individual is being non-cooperative in a deliberate manner.

What to do when the CRA freezes your bank account

The wise thing to do following the seizure of the bank account of an individual is to look for professional help. Professional tax consultants can help an individual get out of situations like this. However, it is necessary to get in touch with a professional as soon as possible – the quicker, the better.

It is also recommended that you should open another bank account to prevent the total stagnation of funds. Unless the CRA gets to know about this account, it will not notify the bank.

It is a good idea to establish communication with the CRA to find out the reason behind the frozen bank account. Next, it is necessary to work with the CRA for the release of the funds. The tax collection agency in Canada can allow it if the concerned taxpayers agree to pay their tax returns with a given timeframe as instructed by the CRA.

Given the fact that the CRA considers a payment schedule only post the exhaustion of all the options, including borrowing or selling off your assets, it is important to figure out the outstanding dues so you are able to decide what amount of money you are able to pay.

While the amount of money which the CRA necessitates to pay can be difficult to bear for a taxpayer, not having an agreement would only serve to attract further legal actions or penalties.

Has the CRA frozen your bank account? If yes, then prompt action can save you both money and hassle. Contact us now for help or assistance regarding CRA tax remediation and appeals in North York, Ontario and other parts in Canada.

Want to Prevent a CRA Audit? Follow These Tips

Whenever the CRA finds a discrepancy with the submission of a tax return by a taxpayer, the nightmare of the latter translates into a reality – the officials of the CRA turn up for carrying out an audit. And though it may not always spell big trouble for a taxpayer, it can be difficult for them to justify their point, especially if they are caught unprepared.

The reasons for an abrupt CRA audit may vary from simple to complex. Generally, the tax officials in Canada show up for an audit when there is some sort of inconsistency in the tax filings when compared year on year.

For example, if you show an unusually low income in your income tax returns for a given year against your income in the previous years, it may catch the attention of the CRA. However, as long as your case is genuine i.e. it does not involve any fraudulent practice, you need not worry. Getting away with false information is nearly impossible as the CRA keeps an eye out for the earnings of taxpayers, regardless of whether they are self-employed or work in a company.

While there is the provision to penalise an individual for falsification of information or tampering with their financial data, engaging in such practices in multiple instances can lead to an even severe penalty. If you ever run out of ideas, it is a good idea to consult a CRA tax consultant of approach a company which provides assistance in this regard. We provide a wide range of services related to taxation in Canada, including CRA tax remediation and appeals in North York Ontario.

When it comes to the filing of business statements, declaring both profits and losses with accuracy is necessary. Apart from promoting transparency, it lends credence to the tax report filed by an individual in the eyes of CRA officials.

The intricate details of CRA taxes and provisions even beat the experts. Minimize the chances of a tax discrepancy and a CRA audit – contact us now!

Useful Information about Changing Your Tax Return

The tax system in Canada is centered on numerous laws related to taxes that are proposed by the CRA. As a result, taxpayers seek an answer to a number of questions. A majority of them wonder whether or not there is a way to change their tax returns. A pertinent question which they ask in this regard is this:

Yes, it is possible to change your tax returns. You can do so after getting a notice of assessment. Though experts strongly recommend using the “My Account online” option to make changes to your tax return, some alternative options such as sending a letter of request to the local tax centre are also available at your disposal.

Reasons for Changing a Tax Return

There can be various reasons for altering your tax return. These are as follows:

  • You got a revised slip
  • Your slip was delivered at a later date than the date at which you were supposed to receive it
  • You have queries regarding the published information of the CRA

While applying for a change in your tax return, you can also add an additional piece of information to lend credence to your claim, regardless of whether or not your reason for applying for a tax change coincides with one of the reasons mentioned above.

Form for Requesting An Adjustment

An applicant can request for an adjustment by filling up the T1 Adjustment Request Form. Even a representative can also fill out the form on behalf of an applicant if the latter provides a signed letter of authorization to the former.

What Happens When You File An Adjustment Request?

Owing to the fact that the inventory levels of the CRA always remains high, the processing of a T1 Adjustment request form submitted by an applicant can take longer than anticipated length of time.

After carrying out a review, the CRA sends a notice of reassessment in connection with a request to the address of correspondence as furnished by an applicant. It also provides the explanation of its review to an applicant by virtue of a letter.

While the CRA makes every possible effort to improve its services, it also deals with the problem of the scarcity of manpower to accomplish all its tasks.

For help or assistance regarding CRA taxes, including CRA tax remediation and appeals in North York Ontario, contact us now!

Missed The CRA Deadline? Apply for Relief from CRA Tax Penalties

When it comes to the submission of your CRA tax-filing, sometimes it can be a case of six of one, (and) half a dozen of the other. That is to say, paying your CRA taxes within the given deadline (April 30 in Canada) provides considerable rewards and not doing so can land you in both monetary and legal troubles at the subsequent stages.

If you have failed to submit your CRA tax-filing within the given deadline, you might wonder what lies ahead of you and what course of action you should plan in order to avert the penalties associated with it. Here’s what you can do to ameliorate the situation.

Why It Is Important To Not Miss The Deadline to File CRA Tax

In Canada, the failure to file your tax return on or before April 30 may result in the delay or discontinuation of solidarity tax credits or any GST/HST refunds. The same is applicable to the payments associated with old age security benefit and Canada child benefit.

Even as you owe a balance, the fact remains that it is mandatory to get the submission of tax filings done by the fixed deadline i.e. April 30.

In the event of late payment of CRA tax, you will be liable to pay a late-filing penalty which includes 5% of the due balance plus 1% of your balance for the number of complete months for which the return was filed late up to 12 months.

A delay in the filing of penalty in previous years can attract a penalty of up to 10% of the outstanding balance for the current year. Plus, you will also be required to pay an additional 2% of your pending balance for the number of full months for which the payment is delayed. At maximum, it is applicable for up to 20 months.

These facts highlight the importance of filing your return within the given deadline. Rather than avoiding the submission of your return, the sensible thing to do would be to reach out to the CRA so that a payment plan could be worked out to help you pay off the amount of money which is due.

Situations in Which You can Request The CRA to Cancel or Waive The Penalties

Sometimes a delay may also happen due to certain man-made or natural disasters. In such situations, one can ask for the waiver or cancellation of the charges related to interest and penalties. Such instances include the following:

  • Extraordinary circumstances like floods, fires, civil disturbances, postal strike, illness, accident or the demise of a family member
  • A delay in the processing or resources of the CRA
  • Loss of employment or inability to pay excessive charges
  • Not meeting the criteria for the eligibility for filing tax returns

You can request for relief from tax penalties for up to a maximum of 10 years preceding the current year.  Fill out from RC4288 to request for cancellation or waiver of interest or penalties. For help or assistance in this regard, consider reaching out to us. Our experts can offer professional assistance related to CRA tax filings, including CRA tax remediation and appeals in North York Ontario.