Tax & Business News
Trips, tips and traps
April 2017
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Links For April
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| Federal Budget 2017 - Billed-Basis Accounting |
Forward this email to a friend!
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The Federal PC party will elect a new leader on May 27, 2017. There are 14 contenders for the position from Chris Alexander to Brad Trost. Unlike our American counterparts, the process so far has been polite and dignified - quite Canadian. Late to the race is Kevin O'Leary, better know for his television persona than his political presence.
Their credentials and position on current matters can be found here.
Having observed the process for nominating a candidate for the riding, I was surprised that so few people were motivated enough to attend.
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| Calendar of Important Dates |
Corporations with a January year end, claiming the small business deduction must pay the balance of tax owing by the end of April.
Corporations with a February year end, not claiming the small business deduction must pay the balance of tax owing by the end of April.
November year ends are due for filing at the end of April
April 14 - Good Friday
May 1, 2017 - Personal Return Filing Deadline
Next Issue - May 8, 2017
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TAX RETURN COUNTDOWN
The end is near...
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The most intense period of tax return preparation and filing is upon us. There are only 22 days until the filing deadline for 2016 personal tax returns must be filed. Fees for preparation increase if the file have to be handled multiple times before being completed. Thus, having complete information at the outset is the wisest use of everyone's time.
The best insurance for an accurate return is to compare the current information with the prior year and find missing information. Many T-slips and RRSP contributions can be downloaded from the CRA website but there is no guaranty their database is complete.
Organizing your material is a big help. (I recall the client bring in the middle drawer of his desk!). Sort medical expenses by date, donations for the current year, and make sure all share sales have their costs when purchased. Also, RRSP receipts for January 2017 and February 2017 should be recorded in your 2016 return even though they will be used in 2017.
Errors can usually be
rectified unlike being late. CRA computers have managed to sustain the demands on them to this point and there is no likelihood they will not be functioning on May 1, 2017.
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QUICK LINKS FOR TAX INFO
Handy tool for tax time...
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TAXPAYER RELIEF
Not what it seems...
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CRA
may grant relief from penalties and interest in cases where the timely satisfaction of a tax obligation was not completed due to:
- extraordinary circumstances;
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actions of the CRA; or
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inability to pay or financial hardship.
In a March 31, 2016 Federal Court Judicial Review,the taxpayer appealed a decision by CRA to refuse relief on penalties and interest. In this case, the taxpayer argued that the CRA agent did not reasonably appreciate the taxpayer's financial difficulties.
The Court agreed with CRA that the concept of financial difficulties for a person is a
financial insecurity or lack of what is necessary to meet basic living needs (that is food,
clothing, housing, and reasonable non-essential elements). As it appeared that the taxpayer was able to repay the outstanding tax arrears, without having an undue impact on a lifestyle of a relatively affluent Canadian taxpayer, CRA's decision to deny the request was deemed reasonable.
CRA has also noted that relief may be granted:
- when collection had been suspended due to an inability to pay and substantial interest has accumulated or will accumulate;
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when a taxpayer's demonstrated ability to pay requires an extended payment arrangement. Consideration may be given to waiving all or part of the interest for the period from when payments start until the amounts owing are paid, as long as the agreed payments are made on time and compliance with the Act is maintained.
Action Item: In addition to financial hardship, some of the more common reasons why taxpayer relief may be granted include: natural or human-made disaster; death/accident/ serious illness/emotional or mental distress; or civil disturbance. If one of these situations apply, an application for interest and penalty relief may be available. Note that taxes would still be owing.
EDITOR: SEE THE TAX CASE REFERENCED AT THE END OF THE NEWSLETTER
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VPN
Don't surf without it...
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The instances of hacking and security breaches are so widespread, consideration should be given to prudent steps you can take to protect your communications. Consider a VPN as secure tunnel between you and where you visit on the internet.
VPN is an acronym for virtual private network. A virtual private network is a private network that uses encryption and other security measures to send data privately and securely through a wide area network (WAN) such as the Internet.
Do-it-yourselfers can set up their own VPN connections or choose from a wide array of commercially available vendors.
Benefits of using VPN include the following:
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GOOGLE ALERTS
Clever...
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Google Alerts is a content change detection and notification service, offered by the search engine company Google. The service sends emails to the user when it finds new results-such as web pages, newspaper articles, blogs, or scientific research-that match the user's search term(s).
Create an alert
- Go to Google Alerts.
- In the box at the top, enter a topic you want to follow.
- To change your settings, click Show options. You can change:
- How often you get notifications
- The types of sites you'll see
- Your language
- The part of the world you want info from
- How many results you want to see
- What accounts get the alert
- Click Create Alert. You'll get emails whenever we find matching search results.
Instead periodically remembering to follow up on information updated on the internet, use Google Alert to troll the internet and program it to email you when the information you are looking for is found.
If you are looking to track news from a competitor or the release of a new product, Google Alerts can automate the process.
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Recent CRA Decisions
There is no escape from tax...
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CRA DOUBLES DOWN ON PENALTIES
Accused taxpayer convicted of four income tax and GST related offences - Whether accused should be fined and also imprisoned, and whether property seized from him should be forrfeited -
The accused taxpayer was convicted of filing false income tax returns, evading payment of income tax, failing to pay GST, and counseling fraud (2016 BCSC 2039). He did not have a lawyer for his trial or for his sentencing hearing. He was about 55 years old, and said that he had no assets and minimal income, and that he had no medical issues, and no responsibility to care for children or other vulnerable people.
After analyzing and applying the applicable sentencing principles, the Supreme Court of British Columbia concluded, in essence, that:
- (a) the taxpayer was able to find work providing an annual income of $25,000;
- (b) it was reasonable for him to pay any fines imposed at the rate of $250 per month;
- (c) the fines imposed should total $24,000;
- (d) he should serve a total of two and one half years in prison; and
- (e) no order should be made for the collection of a DNA sample, and no victim surcharge would apply, although the offence-related property seized from him should be forfeited to the Crown.
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| Disclaimer |
 The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a commentary such as this, a further review should be done. Every effort has been made to ensure the accuracy of the information contained in this commentary. However, because of the nature of the subject, no person or firm involved in the distribution or preparation of this commentary accepts any liability for its contents or use.
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NEW NEWS
All you need to know...
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| Life in the Tax Lane - April 2017 (Episode 23) |
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Sincerely,
Howard Render, CPA*CA
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