Ch.3 tax administration

Question 1

Filing deadline - person

Answer 1

i) April 30
ii) June 15, if taxpayer or spouse carried on a business
iii) later of six months after the date of death and normal filing deadline, if the taxpayer passed away during the year.

Question 2

filing deadline - corp

Answer 2

six months after year end

Question 3

installments = individual

Answer 3

due on filing will be greater than $3,000 for the current year (must be estimated in advance) and for one of the two previous years, instalments must be paid for the current year.
Instalments are due on March 15, June 15, September 15, and December 15. The amount of each of the four instalments is the least of:
i) ¼ × estimated tax payable for the current year
ii) ¼ × tax payable for the immediately preceding year
iii) first two instalments: ¼ × tax payable for the second preceding year; last two instalments: ½ × tax payable for the preceding year minus first two instalments for the current year

Question 4

installments = corps

Answer 4

greater than $3,000 for the current year (must be estimated in advance) and prior year, monthly instalments must be paid. Corporations (excluding small CCPCs) can choose from the following three alternatives, normally choosing the option with the greatest deferral of cash outflow (that is, the smallest instalments):

i) 1/12 × estimated tax payable for the current year
ii) 1/12 × tax payable for the immediately preceding year
iii) first two instalments: 1/12 × tax payable for the second preceding year; last 10 instalments: 1/10 × tax payable for the preceding year minus first two instalments for the current year

Question 5

CCPC eligibility

Answer 5

ligible CCPC is a corporation (together with associated corporations) that:
• did not have taxable income exceeding $500,000 (small business deduction limit) in either the current or previous taxation year
• had taxable capital employed in Canada of no more than $10,000,000
• claimed the small business deduction in either the current or previous year
• has a perfect compliance history (throughout the 12-month period, it had no compliance irregularities with regards to the remittance of tax and filing of returns under the ITA and GST/HST portion of the Excise Tax Act)

Question 6

CCPC installment

Answer 6

4x
The amount of the instalments is calculated as the least of:
i) ¼ × estimated tax payable for the current taxation year
ii) ¼ × tax payable for the immediately preceding taxation year
iii) first instalment: ¼ × tax payable for the second preceding year; last three instalments: 1 /3 × tax payable for the preceding year minus first instalment for the current year

Question 7

Notice of assessment

Answer 7

CRA will complete an initial assessment and provide the taxpayer with a notice of assessment. It is important to note that the CRA has the right to further review and/or audit any tax return within certain time limits.
corporations, the CRA can reassess up to four years after the date on the original notice of assessment. For CCPCs, however, the reassessment period is three years.

Question 8

Notice of objection and appeal process

Answer 8

• for an individual or a testamentary trust, the later of:
o one year after the filing due date
o 90 days after the date of mailing of the notice of assessment (or reassessment)
• for any other taxpayer (for example, a corporation), 90 days after the date of mailing of the notice of assessment (or reassessment)