Did you forget to file your taxes or need a payment plan? It is always best to get in touch and deal with the CRA right away or, better yet, ask your tax professional to do it for you to ensure that you do not pay more than necessary.
For those who prefer to read, a transcription is available below the video.
Good afternoon, everyone. It’s Irfanali with RMI Professional Corporation once again. I hope everyone’s had a great past week and looking forward to the end of the month here as we approach the end of June. We’ll finally get some time hopefully for things to slow down in our office and catch up on life as we say coming into summer.
So, over the last couple of weeks, I’ve actually had some other interesting topics that have
been approached to us in the office. One of them is how to deal with CRA in some finicky situations, let’s say.
dealing with the cRA
So, couple instances, right now, we have a lot of people in the crypto market for example who made a lot of money last year owed taxes for last year. Unfortunately as the calendar
switched the years and tax filings got done we’ve seen a big drop in not only the crypto market but stocks as well. So some people are paying capital gains from last year but they don’t have the capital available to pay their tax bill because the markets have dropped a lot. In that situation what can we do?
Well, simple is to request the CRA. They will work with you that they will do some payment
arrangements. Typically, they want to see their balances paid within six months and they will continue to charge you interest but there are options available. So, always talk to a tax professional and they can walk you through the process, assist with negotiating with CRA and making sure you can actually pay your tax bills on time.
Now, the nice thing is if if the market does continue to stay low for the rest of the year, there will be most likely some losses approaching in 2022 which then those losses can be carried back to 2021 capital gains and you can reduce your tax balance that way as well.
voluntary disclosure program
Another situation that’s come up is we’ve had some clients come back to us saying that they forgot to disclose stuff in the past and they’re not sure what to do on that side. Another good example here is using CRA’s Voluntary disclosure program.
Now, what’s nice about this is as long as CRA is not notifying you about misfilings or anything like that or if CRA is not aware of the situation we’re able to file you under the Voluntary disclosure program and a lot of times get any interest as well as penalties waived in those occasions.
Good example might be somebody who’s out of country for a year but they’re still basically a resident of Canada because they have a house here, families here but they never file taxes. In that instance, we might be able to go under Voluntary disclosure, deem you as a resident of Canada. We file everything. You will owe your taxes of course but the nice thing is any interest and penalties could be waived under the program.
Same thing applies in some situations where you’re not sure if you need to file so you never did but now all of a sudden you realize you need to or if you forgot to disclose something in the past.
So, it’s a very good program but you want to make sure when you go through that program, you file it correctly. You need to file it to CRA properly, give the proper wording to them so you can make sure it gets approved, and when it does get approved, it can save you tons in interest and penalties.