if you are the shareholder of more than one corporation in Ontario, or across Canada for that matter you want to watch this video blog. Mark Feldstein discusses the Canada Revenue Agency and shareholder appropriation.
Mark Feldstein discusses possible ways that the new Harmonized Sales Tax (HST) will impact the way that the Canada Revenue Agency (CRA) pursue unpaid taxes.
I thought it was important to focus on discussing charitable donations as this week’s tax topic. The government is cracking down on individuals who have declared charitable donations from unauthorized charities on their tax returns.
You see, the Canada Revenue Agency publishes a list of authorized charities on their website and if you have claimed a donation to a charity that is not on the list you could be facing a reassessment and significant interest and penalties.
The CRA requires that all receipts for authorized charitable donations have the following content:
If you have made a donation that you have declared on a tax return that is not on the CRA list of authorized charities or it was on the list but your receipt does not contain the information outlined above the CRA will show you absolutely zero compassion, not IF but WHEN you get caught.
If you are in this situation there are a couple of things you can do. One thing you should not do is attempt to negotiate with the CRA on your own.
I can’t say I was surprised when the CTV in British Columbia recently reported that Toronto has topped the list as Canada’s tardiest tax filing city in 2007, 2008 and again in 2009.
The reason this didn’t come as a surprise to me is because my firms focus is to work with taxpayers who have these types of problems. Being located in the GTA I see this more and more. So many individuals and business owners fall behind filing their returns unwittingly make errors on their returns or fail to maintain proper records. We usually meet our clients when the CRA has started to close in on them.
If you are in this situation you don’t have to let it go that far!
Not filing returns or failing to declare income on your returns is tax evasion and it is true that you could face administrative and even criminal penalties. The CRA even publishes the names those who have been convicted under the income tax act on their website!
If you owe tax for 2009 and do not file your return for 2009 on time, the CRA will charge you a late-filing penalty. The penalty is 5% of your 2009 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months.
If they charged a late-filing penalty on your return for 2006, 2007, or 2008 your late-filing penalty for 2009 may be 10% of your 2009 balance owing, plus 2% of your 2009 balance owing for each full month that your return is late, to a maximum of 20 months.
There are 3 main elements to any tax problem:
We apply these elements to get your returns, objections and/or voluntary disclosures filed, to develop a long term strategy to deal with the financial aspect of your tax debt and fend off CRA enforcement action, to evaluate your circumstances to see if you have grounds for an interest and penalty relief, to step in between you and the CRA to help you make a fair deal that you can live with.
If you missed the April 30th deadline penalties accumulate each month after the deadline has passed. The faster you get your returns filed the more you will save in the long run. If you are behind more than one year filing your returns you should take this very seriously.