Chapter 2: Procedures and Administration

Question 1

Canada Revenue Agency (CRA)

Answer 1

Administers tax system by collecting funds, redistributing funds, and ensuring tax compliance.

Question 2

Communications from CRA

Answer 2

• Notice of Assessment (NOA)
• Notice of Reassessment (NOR)
• Audit Letters
• Request for filing or payment letters
• Statements if money is owing to CRA
• T-slips and information letters

Question 3

What are some situations that require filing of an income tax return?

Answer 3

• taxes payable
• claiming a refund
• CRA demand to file
• eligible for benefits
• pension income splitting
  disposition of capital property

Question 4

What is the filing deadlines for returns?

Answer 4

Standard Deadline: April 30 of the following year.

Business Deadline: June 15 of the following year for individuals who carry on a business.

Death Deadline: 6 months after date of death (if death occurs after October and before April 30th)

Question 5

What is the balance due date for tax returns?

Answer 5

Standard Deadline: April 30th of the following year. There is no extension to June 15 for individuals with business income.

Death Deadline: usually April 30th of calendar year following death; 6-month extension if death occurs between Nov 1 & April 30.

Question 6

What are the penalties for not filing on time?

Answer 6

1st Offence: 5% + 1% per month (maximum 12 months)

2nd Offence: 10% + 2% per month (maximum 20 months)

Question 7

What are the three things we file?

Answer 7

1) T1: individual Income Tax Return and supporting schedules.
2) T2: Corporate Income Tax Return and supporting schedules.
3) GST/HST Return

Question 8

How long should you keep your books and supporting receipts?

Answer 8

you should keep your books and supporting invoices/receipts for six years. May want to keep them long (ten years to be on the safe side).

Question 9

Penalties for Incorrect Information

Answer 9

• Tax Evasion: prosecution, steep penalties (200%), criminal record, jail.
• Tax Avoidance/Planning: it depends… usually penalties and interest on adjustment (range in severity).
• GAAR: being strengthened and more heavily enforced.
• Tax Monies: can be collected through wage garnishment, taken directly from your bank account, assets seized.

Question 10

What are the four due dates in 2024 of instalments?

Answer 10

• March 15, 2024
• June 15, 2024
• September 15, 2024
• December 15, 2024