Introduction: Repeated Failure to File Income Tax Penalty Under Canada’s income tax system, taxpayers are obligated to calculate, report, and pay their taxes by the applicable deadlines. While most Canadians comply with these requirements, some fail to file or pay their taxes on time. To ensure compliance, the Canada Revenue Agency (CRA) enforces penalties, including […]
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What is an Income Tax Statute-Barred Period? When taxpayers are initially assessed for income tax or GST/HST, they receive a Notice of Assessment. If changes are needed to a prior assessment, the CRA issues a Notice of Reassessment, which overrides earlier assessments. Taxpayers can receive multiple Notices of Reassessment for the same tax year or […]
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Filing Tax Returns: The Starting Point in Tax Administration Under subsection 150(1) of the Income Tax Act, taxpayers in Canada are required to file an income tax return each year without waiting for notice or demand from the Canada Revenue Agency (CRA). Once a return is filed, the CRA reviews it and assesses the taxpayer’s […]
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Introduction: Net Worth Assessments A net worth assessment is a tool the Canada Revenue Agency (CRA) uses when they believe a taxpayer’s return is inaccurate or when the taxpayer has not maintained adequate records of their income. Under subsection 152(7) of the Income Tax Act, the CRA is not bound by the information provided in […]
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What is a Taxpayer Relief Application? When taxpayers are unable to meet tax payment deadlines or fulfill their obligations due to personal misfortune or uncontrollable circumstances, the CRA typically imposes penalties and interest. Fortunately, subsection 220(3.1) of the Income Tax Act allows the CRA to waive penalties or interest at their discretion or upon the […]
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Introduction: CRA’s Limitations on Collecting Old Tax Debt If you have an unpaid tax liability that’s over 10 years old, the Canada Revenue Agency (CRA) may no longer be able to collect it, especially if they haven’t contacted you for collection purposes. The Income Tax Act grants the CRA extensive powers to collect tax debts, […]
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Introduction: The Canadian Tax Objections Process Under subsection 165(1) of Canada’s Income Tax Act, every taxpayer has the right to object to a tax assessment or reassessment, provided they meet the statutory time limits and procedural requirements. This process begins when a taxpayer files a Notice of Objection. The CRA’s Appeals Division will then assign […]
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Introduction: CRA’s Power to Compel Oral Interviews Since December 15, 2022, the Canada Revenue Agency (CRA) has the authority to require taxpayers or relevant individuals to attend oral interviews during a tax audit. This power stems from the Federal Court case Minister of National Revenue v Cameco Corporation, 2019 FCA 67 and subsequent legislative changes […]
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Introduction Many taxpayers find themselves overwhelmed by tax debts, compounded by other financial obligations and increasing interest charges. If you’re struggling to manage your tax debt, it’s important to know that the Canada Revenue Agency (CRA) has extensive collection powers. These powers can be exercised without a court order and may include: Garnishing your income […]
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Introduction One of the most impactful changes in recent tax policies includes increased funding for tax enforcement in Canada. While tax authorities have assured that additional enforcement efforts will not disproportionately target small businesses or middle-income taxpayers, individuals may still be concerned about how to prepare for potential scrutiny by the Canada Revenue Agency (CRA). […]