Tax Auditor Bonuses and Quotas

The Canada Revenue Agency and its provincial counterparts are mandated by law to enforce the provisions of their respective statutes, which includes collecting as much as possible of the taxes due to the various governements under the law.  As taxpayers, we may not always appreciate their efforts, but we probably do want to ensure that those employees charged with these duties are actually doing their jobs.

3rd Quarter 2014 CRA Interest rates

The CRA has released the interests rates for the third quarter of 2014.  The rates are unchanged from the 2nd quarter with the rate on overdue income taxes remaining at 5% (non-deductible) while CRA will pay 3% on refunds to individuals and 1% to corporations (this interest is of course included in income!).  The prescribed rate for benefit calculations remains at 1%.

Individual income tax return statistics for the 2014 tax-filing season

The CRA maintains comprehensive statistics regarding personal tax filings.  While the 2013 tax return season is not not complete (individuals carrying on business personally have until June 16th to file their personal tax returns for 2013), the CRA reports that to June 2nd a total of 25,697,031 personal income tax returns had been filed for the 2013 tax year.  Of these, 20,597,002, or fully 80%, were filed electronically, either by Efile through registered tax perparers (54% of the overall total) or through the CRA's personal Netfile program (26%).

CRA Penalties For Businesses That Use Illegal Electronic Sales Suppression Software

The Canada Revenue Agency (CRA) is aware that electronic sales suppression (ESS) software is being marketed and sold to Canadian businesses. As part of its efforts to combat the underground economy, it has introduced new measures to address this problem.  ESS software (commonly known as zapper software) is illegal. Designed to work with point-of-sale systems and electronic cash registers, businesses use this software to knowingly delete part of their sales from their computer records to reduce their GST/HST and income tax obligations.

CRA Changes Taxation of Lottery Retailer Payments

Provincial lotteries typically provide payments to lottery ticket distributors and/or retailers in respect of sales of lottery tickets by them in the course of their businesses.  Many also pay additional amounts in respect of winning tickets sold by them.  

The Canada Revenue Agency has long maintained (see Interpretation Bulletin IT-404R, dated March 31, 1981) that the former payments are to be included in calculating income from business, while the latter payments are excluded from income as representing the receipt of a prize.

CRA to Register Tax Preparers

The CRA announced on January 17, 2013 a program to register all persons and companies who prepare personal and corporate income tax returns for a fee.  It is contemplated that the Registration of Tax Preparers Program (RTPP) could be expanded in the future to include persons who prepare trust returns as well and GST/HST returns.

CRA Refund/Collection Scams

This week I received an email purportedly from the CRA inviting me to respond to collect a tax refund - I deleted it, since I know I don't have a refund coming to me, and the email was really pretty poorly crafted really.

Rely On The CRA At Your Peril

Some time ago I wrote a cautionary note explaining that taxpayers cannot rely on advice received from the CRA (here); the CRA is free to change its "mind" retroactively and to assess a taxpayer who followed CRA explicit advice or written policy.

Top ten CRA audit flags

Gowlings, a large national law firm, recently published an article setting out the top ten audit things most likely to trigger an audit by the CRA.

CRA Interest Rates Decline

The Canada Revenue Agency is required to adjust the interest rates used for taxable benefits, overdue taxes, tax refunds and other matters on a quarterly basis.  Rates increased for the 4th quarter of 2013 after a long period of stability, but have now all decreased for the first quarter of 2014.  Generally rates will be 1.00% for benefit purposes, 3% for tax refunds for individuals and trusts and 1% for corporations, and 5% for tax arrears.

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