Section 207.02[1] imposes a tax on over-contributions to an individual’s tax-free savings account (TFSA) of 1 percent each month of the individual’s highest excess TFSA amount that month. Section 207.03 imposes a similar tax on contributions by non-residents. Section 207.06(1) provides the Canada Revenue Agency (CRA) with the discretion to waive or cancel the taxes imposed under sections 207.02 …
In February 2019, the Canada Revenue Agency (CRA) published Audit Communique AD-19-01 “Audit Agreement and Waiver of Objection Rights.”[1] The purpose of the document is to provide guidance on negotiating an audit agreement with taxpayers and obtaining a waiver of objection rights. Audit Agreements According to the document an audit agreement is “an agreement between the CRA and …
Many taxpayers experience delay in having their tax return processed as a result of the Canada Revenue Agency (CRA) conducting a “pre-assessment review.” Practically, a pre-assessment review is not much different than a mini audit. In some cases, the CRA reviews a return before processing it and issuing an assessment. Unusual refunds, donations, medical expenses, professional fees, and substantial interest …
The tax system in Canada is a self-reporting system. Taxpayers are expected to calculate their taxes and pay as necessary and the Canada Revenue Agency’s (CRA) role is to administer Canada’s tax laws. Lately, taxpayers have achieved some success in the civil courts holding the CRA liable for abusive audits and tax collection practices. The (limited) success ought to serve …
The Canada Revenue Agency (“CRA”) often applies penalties when a taxpayer has failed to comply with their obligations under the Income Tax Act, Excise Tax Act and other acts which the CRA administers.[1] The CRA can apply penalties for late-filing returns, repeatedly late-filing returns, failing to report income, deficiencies in foreign reporting obligations, for being grossly negligent, etc. Interest (currently, …
The CRA has broad powers to audit taxpayers and demand information from taxpayers and third parties. There are few limitations on the power to audit and compel information. However, if a taxpayer becomes the subject of a criminal investigation, their rights under the Charter of Rights and Freedoms are engaged and act as a check on CRA power. The …
Bankruptcy is a process to relieve honest, but unfortunate, debtors of their debts. Usually, at the end of the process, the bankrupt is released from the obligation to repay the debts they had when the bankruptcy was filed. One of the largest causes of personal and corporate insolvencies in Canada is tax debts. Options under the Bankruptcy and Insolvency Act …
If a taxpayer receives an assessment or reassessment from the Canada Revenue Agency (CRA) with which they disagree, their first opportunity to dispute the assessment is by filing a notice of objection with the CRA and attempting to resolve the matter with the CRA Appeals Division. If, after the objection process has ended, the taxpayer still disagrees with the CRA’s …
This article provides an overview of what is, for many taxpayers, the first step in a dispute with Canada Revenue Agency (“CRA”) – the “Notice of Objection”. For most people, dealing with their taxes entails gathering all their t-slips and other relevant information and handing it off to their accountant or doing it themselves at home. They receive an assessment, …
