Posts Tagged ‘compliance’

What to expect when the Canada Revenue Agency calls you

It is possible that the Canada Revenue Agency (CRA) will contact you by phone for legitimate tax reasons.

During such phone calls, the CRA officer must validate your identity and therefore will ask for certain personal information, including your date of birth, your address, and in the case of a business some account specific details.

The CRA will not:

The CRA may:

·         ask for information about your passport, health card, or driver’s licence

·                  validate your identity by asking for certain personal information, including your full name, date of birth, your address and, in the case of a business, details about your account

·         request personal information by email

·         notify you by email when new mail is available for you to view in CRA secure portals such as My Account, My Business Account or Represent a Client

·         email you a link requesting you fill in an online form with personal or financial details

·email you a link to a CRA webpage, form, or publication in response to your telephone enquiry

·         send you a link to your refund by email or text message

·send you a notice of assessment or re-assessment by mail or notify you by email when it is available to view in My Account, My Business Account, or Represent a Client

·         setup an in-person meeting in a public place to take a payment

·ask for financial information such as the name of your bank and its location

·         demand immediate payment by prepaid credit card

·request payment for a tax debt through any of the CRA’s payment options

·         threaten with immediate arrest or prison sentence

·take legal action to recover the money you owe if you refuse to pay your debt

 

Before giving money or personal information:

  • verify the caller’s authenticity
    • You can note the caller’s name, phone number, and office location and tell them that you want to first validate their identity.
    • You can then verify that the employee works for the CRA or that the CRA did contact you by calling the CRA at 1-800-959-8281 for individuals or 1-800-959-5525 for business.
  • verify your tax status and make sure your address and email are up to date
    • You can confirm this information with the CRA either online through the CRA secure portals, or by calling the CRA at 1-800-959-8281 for individuals or 1-800-959-5525 for business.

When in doubt, ask yourself

  1. Did I file my tax return on time? Have I received a notice of assessment or re-assessment indicating a tax balance due?
  2. Have I received previous written communication from the CRA by email notification or mail about the subject of the call? Does the CRA have my most recent contact information, like my email and address?
  3. Is the requester asking for information I would not provide in my tax return or that is not related to my debt with the CRA?
  4. Did I recently submit a request to make changes to my business number information?
  5. Why is the caller pressuring me to act immediately? Am I confident the caller is a CRA employee?

CRA phone interactions generally come after written communications, such as an email notification to check your online mail or a letter, and are made under special circumstances. For example:

  • If you have a tax debt, a collections officer may call you to discuss your case and request a payment. In this case, you may need to provide some information about your household financial situation.
  • If you have not filed your income tax and benefit return, a CRA officer may contact you by telephone to ask you for the missing returns.
  • If the CRA has questions about your tax and benefit records, or documents you have submitted, a CRA officer may contact you by phone for further discussion.

To report scams

To report deceptive telemarketing, contact the Canadian Anti-Fraud Centre online at www.antifraudcentre.ca or toll free at 1-888-495-8501. If you believe that you may be the victim of fraud or have given personal or financial information unwittingly, contact your local police service, financial institution, and credit reporting agencies.

 

 

Business Investment Loss – Denied

In a Tax Court of Canada case, a mother had guaranteed the business loans for her son’s corporation. Unfortunately, the corporation failed and subsequently the mother paid off the loans. The mother claimed business investment losses for the amounts repaid.

Her only motivation for the guarantee was to assist her son’s business. She did not charge a guarantee fee and thus there was no possibility of investment income.

The Tax Court disallowed the business investment losses for the mother because she did not make the loan guarantees to earn income. Solution – Charge an annual fee.

Gov’t of Canada targeting retail workers with employee discount tax

A spokesperson for Revenue Minister Diane Lebouthillier confirmed that her office is reviewing the proposal, which appears in the latest version of the tax folio from the Canada Revenue Agency.

The proposal is to tax employee discounts as income based on the amount of money saved. Under the proposed change, employee discounts would be counted as income, and the value of that discount would need to be taxed at “equal to the fair market value of the merchandise purchased, less the amount paid by the employee.” Exceptions would only be made on discounts that are afforded to some members of the public at some point during the year.

The latest version of the Canada Revenue Agency’s tax folio advises employers that “when an employee receives a discount on merchandise because of their employment, the value of the discount is generally included in the employee’s income,” with the value of the discount assessed at “equal to the fair market value of the merchandise purchased, less the amount paid by the employee,” unless the discount is “available to the public or a segment of the public, at some point during the year.”

Conservative finance critic Pierre Poilievre issued a statement Monday saying the change means the government plans to tax things like a 10 per cent shoe discount offered to shoe salesmen, a meal discount offered to a waitress or a free gym membership given to a fitness trainer.

Before the change, which some expect to come into effect Jan. 1, employers were advised to tax employee discounts only if the employee was purchasing the merchandise below the employer’s cost.

Not only would the change “target those who can least afford to pay more,” according to Poilievre, but it means local business owners will have the headache of needing to “track all of these discounts.”

Minister of National Revenue Diane Lebouthillier said in a written statement that the CRA’s goal is “to ensure that the agency does not impose additional administrative burdens on businesses.”

With a report from CTV’s Kevin Gallagher

ctvnews.ca/politics

Tax Information Newsletter for Businesses

Businesses – Tax information newsletter, Issue: 2016-03

1- Compliance letter campaign – Message to GST/HST registrants

In December 2016, the Canada Revenue Agency (CRA) will conduct a GST/HST compliance letter campaign pilot project. The CRA will send 250 letters in December followed by 250 in February, 2,500 in May, and 2,500 in August to GST/HST registrants. Those receiving a letter will be asked to review a previously-submitted GST/HST return with suspected errors and confirm whether the amounts they reported are correct or need to be changed.

The campaign supports the CRA’s increased emphasis on helping individuals and small businesses to better understand their tax obligations and encourages them to correct any errors in their past GST/HST returns. This increased understanding of tax obligations will also serve in promoting compliance going forward.

2- 2017 Indexation adjustment for personal income tax and benefit amounts are now available

Each year, certain personal income tax and benefit amounts are indexed to inflation using the Consumer Price Index data as reported by Statistics Canada. The chart provides the indexed amounts for four tax years.

3- Does your business have tax debt? Don’t panic. You have options.

Does your business owe taxes to the CRA? Ignoring your tax debt isn’t the best strategy. Avoiding payment could result in financial and legal consequences for you and your business. Instead of avoiding a payment, check out the video “Keeping Your Business on Track” to find a better option.

4- Businesses take notice: Your tax information just got clearer!

The CRA is redesigning the correspondence it sends to Canadians, including the Corporation, and Goods and services tax/ harmonized sales tax (GST/HST) notices of assessment (NOA) and notices of reassessment (NOR). The CRA has made changes to how the notices are structured, designed, formatted, and written, making the information easier to read and understand.

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