Februrary 5, 2015
Timing is Everything, and Fairness Request will be Helpful!
I had a new client visit with me early in the 2015 New Year regarding older tax filings which had not been made. One of the years which was arbitrarily assessed was 2004. Thus, the Assessment was dated August, 2014, this had now become statute barred (more than 90 days elapsed) and 10 year rule to make an adjustment request had passed.
Thus, being in calendar 2015, not much can be done about the arbitrary assessment for the taxes for 2004. They are now locked. However, the interest and penalty can be waived, based on a 2012 court case for the interest and penalty part which increases in the years 2005 to current. So as the 2004 tax balance was more than 50% penalty and interest, this can be reduced by a fairness request. However, the tax payer is now locked on the actual tax amount and paying taxes which they otherwise would not have had to pay.
So, as an example, on a $3,500 overall assessment, it looks like $1,600 is going to remain (tax assessed) and the rest for interest and penalty needs a fairness appeal to be filed. Had the client contacted me one month earlier in December 2014 versus January 2015, then all relieve was possible for the entire amount. So don't wait 11 years to see an accountant, do it within 30 days of receiving any Notice of Assessment in order to give the CPA, CA time to file the return and/or any other adjustments for you on a timely basis. I do feel badly for the taxpayer, but they did ignore several requests to file, before the arbitrary Notice of Assessment was filed by the Canada Revenue Agent. So the good part is that 2005, 2011, 2012 and 2013 can still be adjusted and properly filed at this time (which I am doing and a fairness appeal on the interest and penalty for 2004). Thus, a tough lesson to learn for the ultimate tax procastinator in the local Newmarket/Aurora, Ontario area.
If you need some help, then please contact me as soon as you receive a Notice of Assessment or letter from Canada Revenue Agency.
If you have any comments or questions, please contact me.
Peter Wiesner CPA, CA at 905-898-3355 or firstname.lastname@example.org
FYI - a reminder on this issue was sent out by CRA in December 2014 as follows;
The Canada Revenue Agency (CRA) reminds taxpayers and registrants (for both GST/HST and non-GST/HST purposes) that they have until December 31, 2014 to make a taxpayer relief request related to 2004.
The deadline applies to taxpayer relief requests for:
The various laws that the CRA administers allow for the cancellation or waiver of penalties and interest when taxpayers and registrants are unable to meet their tax obligations due to circumstances beyond their control. The CRA may also accept certain late-filed, amended, or revoked income tax elections, and issue income tax refunds or reduce income tax payable beyond the normal three-year period. Taxpayers and registrants or their authorized representatives can make a taxpayer relief request for relief of penalties and interest by completing RC4288 Request for Taxpayer Relief - Cancel or Waive Penalties or Interest. For all other taxpayer relief requests, go to Submitting your Request.
Notice to Reader - Warning and Disclaimer
This monthly update was prepared on February 5, 2015.
When considering any of ideas from this article, please contact the writer directly before acting on them. This will ensure that any information has been updated.
Without contacting the writer before implementing any of these items you will bear all the responsibility for any tax assessments and or business issues that may arise from this information.
Copyright @ 2015