Last week I spent two intensive days learning about all the 2013 tax updates. As to be expected, a lot of the information dealt with the changes implemented by the Federal and Provincial governments for the 2013 tax season and proposed changes for 2014. But instead of dwelling on the tax dollars we all need to pay, I thought I would share 2 ways the CRA might be able to help you when something has gone off the correct path.
1) Voluntary Disclosure Program (VDP)
If you find that you forgot to claim some income or didn’t realize that the investments you sold should have been reported as capital gains, it’s better for you to contact the CRA than for them to come after you.
In March of 2013 a revised information circular (IC00-1R3) was released for the purpose of providing information about the VDP. The purpose of the VDP allows a taxpayer to make disclosures to correct inaccurate or incomplete information, or to disclose information not previously reported. For the purpose relating to this information, a taxpayer can be an individual, an employer, a corporation, a partnership, a trust, a GST/HST registrant or claimant.
The VDP encourages taxpayers to come forward and correct previous omissions. Taxpayers who make a valid disclosure will have to pay the taxes or interest charges and can do so without penalty or prosecution. If you’re not sure on whether you want to take a chance on the VDP, you can submit a “No-Name Disclosure”. You would have a discussion with a CRA officer which is informal, non-binding, and general in nature. The purpose is to supply the taxpayer with insight into the VDP process, a better understanding of the risk involved and the relief available under the VDP. There are 3 Tax Centres that you approach based on your residence. For the Atlantic, Quebec and Ontario Regions the Tax Centre is;
Post office Box 3000, Station Bureau-chef
Shawinigan QB G9N 7S6
If you’re not sure as to whether you want to deal directly with the CRA in this matter, you can authorize a representative to deal with them on your behalf. This needs to be done in writing prior to the representative speaking with the CRA and there are specific forms that need to be completed. For a business it is a RC59 Business Consent Form. For an individual regarding income tax matters, it is form T1013, Authorizing or Cancelling a Representative. For more information, please click here.
2) Service Related Complaint
I was recently working with a new client when they told me why they were changing from their long time tax preparer to me. The client, a proprietor, had an audit which covered the 2010 and 2011 tax years. According to my client, they gave the accountant all their documentation for the 2 years and submitted it to the CRA auditing office. Also according to my client, the accountant didn’t try to explain the client’s business model to the CRA or explain why certain expenses were a necessary part of the way they conduct their business. There was also a language challenge when the client, accountant and auditor were trying to communicate. I mentioned to my client that there was now a new procedure to lodge a complaint. The CRA has established an Electronic Complaint Form which is fillable and saveable. There is also a Taxpayer’s Ombudsman to help you.
So don’t feel that once you run into an issue or problem when dealing with the CRA that this is the final result. There is help out there and the CRA wants to be one of your sources.
I welcome your feedback. Please leave a link back to your own blog too if you have one, via the commentluv feature here on the site.
Until next time,