Frequently Asked Questions

The Canada Revenue Agency is a federal agency that administers tax laws for the Government of Canada and for most provinces and territories. The CRA is also in charge of various social and economic incentive programs (cheques for HST/GST refunds, “Canada Child Benefit”, etc)

See more on about the CRA at: http://www.cra-arc.gc.ca/gncy/menu-eng.html

Well, you can try calling them, but from our experience, you’ll be waiting on hold for a long time, and they do not give tax advice.  Nor is it in their mandate that they act in your best interest; their mandate is to collect as much tax as possible. Furthermore, they will only answer the exact question you ask, and won’t fill in any blanks or address your particular context. Lastly, any information they do provide will be the CRA’s perspective on what they think the Income Tax Act says.

So if you still want to call them directly, the CRA has different phone numbers for different types of enquiries.

For individual income tax enquiries call 1-800-959-8281.

For Benefit enquiries call 1-800-387-1193.

For Businesses and self-employed individuals call 1-800-959-5525.

Remember, the CRA does not provide legal advice, and their mandate is to collect as much tax as possible. So if your issue is complicated, we would advise getting proper tax and legal advice.

If you do not get a satisfactory response from the CRA or would like a second opinion from someone with your best interests in mind, please contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation to address your specific situation.

You can call the telerefund line at the CRA at 1-800-959-1956, or the individual income tax enquiry line at 1-800-959-8281.

You would call the “benefit enquiry” number at 1-800-387-1193. The benefit department provides information on the Canada Child Benefit, GST/HST Credits, child disability benefit, and other related provincial and territorial programs.

When the CRA requests a specific document in regard to a claim, this is not an audit. Rather, since the tax system is based on self-assessment, they are just seeking proof of your claim.

An audit is a deeper examination of your tax return to verify any claims you have on anything on your return, such as the amount of deductions you claimed.

The CRA, in information circular IC71-14R3 (found online at http://www.cra-arc.gc.ca/E/pub/tp/ic71-14r3/ic71-14r3-e.html), describes tax audits in detail.

For further information see our blawgs at https://dominiontaxlaw.com/tax-lawyer-vs-accountant/ and https://dominiontaxlaw.com/how-to-handle-disputes-with-the-cra/.

If you are under audit and you are concerned about any potential issues, please contact us for a consultation. We charge for our consultations, but it may be the most cost-effective investment you ever make. Please contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation to address your specific situation.

The CRA states that you should generally keep all your required records for a period of six years from the end of the last tax year. The Income Tax Act, in section 230(1) and 230(4)(b) state that the records must be kept “until the expiration of six years from the end of the last taxation year to which the records and books of account relate.”.

Please contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation to address your specific situation.

The “normal” assessment period (how far the CRA can go back and reassess you) is three years for an individual, four years for a corporation. Another three years can be added to the normal reassessment period if the matter involves non-residents of Canada in any way.  However, the normal reassessment period can be extended if it can be established that the taxpayer made a misrepresentation due to negligence, carelessness or willful blindness, or committed any fraud in filing a return or in supplying any information. The CRA routinely alleges negligence, carelessness and willful blindness and sometimes outright fraud in order to reassess tax years beyond the normal re-assessment period. If the CRA disagrees with you in any way, they will allege you were careless, which is sufficient to open up any year back to the 1917 War Income Tax Act. Effectively, there is no “statute of limitations” on Canadian tax matters.

If you have concerns about the CRA reassessing you for past taxation years, see our blawg on Disputes with the CRA at https://dominiontaxlaw.com/how-to-handle-disputes-with-the-cra/or contact us https://dominiontaxlaw.com/contact-us/ to set up a consultation to address your specific situation.

A notice of assessment.

After you file your tax returns, you will receive a “Notice of assessment”. This notice summarizes how the Canada Revenue Agency calculates your taxes, and describes any amounts they have changed.

When looking at your notice of assessment, pay attention to the date issued. There are time limitation periods to “object” to a notice of assessment if you disagree. For further information, Please see our blawg on disputes with the CRA at https://dominiontaxlaw.com/how-to-handle-disputes-with-the-cra/ information or contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation to address your specific situation.

The Canada Revenue Agency will inform you if they are reassessing your taxes with a “notice of reassessment”. If you disagree with the CRA’s decision, you have the ability to object, so long as it is within the prescribed time periods. Please see our blawg on disputes with the CRA at https://dominiontaxlaw.com/how-to-handle-disputes-with-the-cra/ information or contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation to address your specific situation.

You can fill out a Notice of Objection, or contact tax professionals like ourselves for help. Please see our blawg on Disputes with the CRA at https://dominiontaxlaw.com/how-to-handle-disputes-with-the-cra/ or contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation to address your specific situation.
The regular time limit for a notice of objection is a maximum of 90 days from the date of the notice of assessment or reassessment. There are ways to get an extension, however, they are not automatically granted. Please see our blawg on disputes with the CRA at https://dominiontaxlaw.com/how-to-handle-disputes-with-the-cra/ or contact us at https://dominiontaxlaw.com/contact-us/ for more information.

Residents with a Postal Code starting with letters A to P may send their objection to the Eastern Intake Centre, and residents with a Postal Code starting with the letters R to Y may send their objection to the Western Intake Centre.

Western Intake Centre Vancouver Tax Service Office

9737 King George Boulevard
PO Box 9070, Station Main
Surrey BC  V3T 5W6
Eastern Intake Centre
Sudbury Tax Service Office
1050 Notre-Dame Avenue
Sudbury ON  P3A 5C1

See http://www.cra-arc.gc.ca/E/pub/tg/p148/p148-e.html#_Toc312911627.

A Voluntary Disclosure gives you the ability to change a tax return you previously filed, or to file a return that you should have filed.  For more information, please see our blawg on Voluntary Disclosures at https://dominiontaxlaw.com/canadas-voluntary-disclosures-program/ or contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation to address your specific situation.

We would recommend contacting a professional such as ourselves, but please see our blawg on Voluntary Disclosures at https://dominiontaxlaw.com/canadas-voluntary-disclosures-program/ or contact us at https://dominiontaxlaw.com/contact-us/.

If you have suffered hardship, you can file a Request for Taxpayer Relief. You can also work out a repayment plan with the CRA. You will want to take action or the CRA can penalize you.

We work with various professionals to address these issues in an efficient manner, including setting up payment plans that are right on your facts and circumstances, or determining if bankruptcy or something akin to bankruptcy would be appropriate for you, if we can intervene relatively early in the process. Please contact us at https://dominiontaxlaw.com/contact-us/ for a consultation to discuss your specific situation.

The Canada Revenue Agency may grant relief from penalties or interest if there are extraordinary circumstances that would prevent a taxpayer from meeting their tax obligations. We can assist in determining if this process is likely to be effective for you, and with preparing the documentation so as to optimize your relief.  Please contact us at https://dominiontaxlaw.com/contact-us/ for a consultation to discuss your specific situation.

If you are unable to pay your taxes, and the matter is in collections, you may be able to arrange a payment plan with the Canada Revenue Agency. We work with various professionals to address these issues in an efficient manner, including setting up payment plans that are right on your facts and circumstances, if we can intervene relatively early in the process. Please contact us at https://dominiontaxlaw.com/contact-us/ for a consultation to discuss your specific situation.

Yes. If you owe taxes, the penalty is 5% of your balance owing, plus an additional 1% of your balance owing each month your tax return is late, to a maximum of 12 months.

See http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/ntrst/menu-eng.html.

Tax evasion is defined as “the illegal nonpayment or underpayment of tax”. There are severe penalties for tax evasion in Canada. Tax evasion is different than “tax avoidance”, which utilizes provisions in the Income Tax Act to result in paying less taxes in a legal manner. If you think you may have committed tax evasion or know someone who has done so via a non-Canadian entity or account, contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation

Tax Fraud what people normally call tax evasion.  It occurs when an individual or business willfully or intentionally falsifies information on tax returns in order to reduce the amount of tax paid. If you think you may have committed tax fraud or know someone who has done so via a non-Canadian entity or account, contact us at https://dominiontaxlaw.com/contact-us/ to set up a consultation.

Please see our blawg at https://dominiontaxlaw.com/tax-scams-dont-fall-for-scammers-pretending-to-be-the-cra/ regarding common scams from individuals pretending to be the CRA.

The CRA states the following: 

If you suspect you may be the victim of fraud or have been tricked into giving personal or financial information, contact your local police service.

If the CRA has confirmed that a taxpayer’s information has been compromised, the Agency will act to prevent the fraudulent use of the information involving systems and processes for which the CRA is responsible.

If your social insurance number (SIN) has been stolen, you should contact Service Canada at 1-800-206-7218. For more information, see Social Insurance Number (Service Canada website).

First, and very importantly, do not file another return for that tax year. The CRA instructs that you should wait for your notice of assessment before asking for changes. The CRA also states that “Generally you can ask for a change to a return for a tax year ending in any of the 10 previous calendar years. For example, a request made in 2016 must relate to the 2006 or a later tax year to be considered.”.

In the collections process, the CRA has the right to seize your accounts. If the situation has progressed that far, there is often very little we can do.  However, we work with various professionals to address collections issues in an efficient manner, including setting up workable payment plans, if we can intervene relatively early in the process. Please contact us at https://dominiontaxlaw.com/contact-us/ for a consultation to discuss your specific circumstances.

A CRA garnishment typically occurs when you have a tax debt and do not have a payment plan with the Canada Revenue Agency. However, we work with various professionals to address collections issues in an efficient manner, including setting up workable payment plans, if we can intervene relatively early in the process. Please contact us at https://dominiontaxlaw.com/contact-us/ for a consultation to discuss your specific circumstances.

According to the CRA, “Bankruptcy is a legal process performed by Industry Canada under the Bankruptcy and Insolvency Act, by which you may be discharged from most of your debts.

When you file for bankruptcy, the trustee becomes the administrator of your property and assets. One of the roles of the trustee is to wind up the property by selling all the assets and depositing the funds in trust for the creditors in bankruptcy.”

It depends…really, it does, depending on so many different factors and issues that I can’t really be addressed in a FAQ.  See our blawg on Bankruptcy at https://dominiontaxlaw.com/bankruptcy-the-unfortunate-end-of-the-line-for-many-tax-disputes/. However, we work with various professionals to address these issues in an efficient manner, including determining if bankruptcy or something just shy of it, is right on your facts and circumstances, if we can intervene relatively early in the process. Please contact us at https://dominiontaxlaw.com/contact-us/ for a consultation to discuss your specific situation.

According to the Canada Revenue Agency, “a tax shelter includes either a gifting arrangement or the acquisition of property, where it is represented to the purchaser or donor that the tax benefits and deductions arising from the arrangement or acquisition will equal or exceed the net costs of entering into the arrangement or the property. Also, a gifting arrangement where the donor incurs a limited recourse debt related to the gift will be a tax shelter”.

Contact professionals such as ourselves at https://dominiontaxlaw.com/contact-us/ if you are planning, or are involved in a tax shelter and need some advice.

Please see our blawgs on tax shelters including “Berg, Berg 2 and Two cases” at https://dominiontaxlaw.com/tax-shelters-you-can-never-be-too-cautious-berg-v-the-queen./

No. Only Canadian registered charities or other qualified donees may issue donation receipts that will allow you to claim a charitable tax credit. The Canada Revenue Agency provides a list of registered charities. See our blawg on Tax Shelters at https://dominiontaxlaw.com/tax-shelters-you-can-never-be-too-cautious-berg-v-the-queen.  Please contact us at https://dominiontaxlaw.com/contact-us/ for advice on your specific situation.

Also see http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html.

How do I find out if a charity is registered?

Check the CRA website at http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html.

Your principal residence can be any of the following types of housing units: a house, a cottage, a condominium, an apartment in an apartment building, an apartment in a duplex, or a trailer, mobile home, or a houseboat. You may have only one. The property must qualify to be a principal residence.

According to the CRA, “A property qualifies as your principal residence for any year if it meets all of the following four conditions:

  • It is a housing unit, a leasehold interest in a housing unit, or a share of the capital stock of a co-operative housing corporation you acquire only to get the right to inhabit a housing unit owned by that corporation.
  • You own the property alone or jointly with another person.
  • You, your current or former spouse or common-law partner, or any of your children lived in it at some time during the year.

You designate the property as your principal residence.”

According to the CRA, “A property qualifies as your principal residence for any year if it meets all of the following four conditions:

  • It is a housing unit, a leasehold interest in a housing unit, or a share of the capital stock of a co-operative housing corporation you acquire only to get the right to inhabit a housing unit owned by that corporation.
  • You own the property alone or jointly with another person.
  • You, your current or former spouse or common-law partner, or any of your children lived in it at some time during the year.

You designate the property as your principal residence.”

The government of Canada has committed to tightening up these rules and requiring taxpayers to report the sale of their principle residence on their tax returns going forward. Please see our blawg on the issue. https://dominiontaxlaw.com/contact-us/

The Offshore Tax Informant Program was launched as an effort to fight international tax evasion. It allows the Canada Revenue Agency to make financial awards to individuals who provide information related to major international tax noncompliance, that leads to the collection of taxes owing. Please see our blawgs at https://dominiontaxlaw.com/blowing-the-whistle-on-us-tax-fraud/ and/or contact us for more information at https://dominiontaxlaw.com/contact-us/.

No. We charge a reasonable fee for a consultation. Free consultations are usually worth what you pay for them. See our Fees and Retainers page at https://dominiontaxlaw.com/fees-retainers/.

Additional Questions

Whoa! Specialize?  Who said anything about “specializing”?  …

Unfortunately, “specialize” is a loaded word for Canadian lawyers, especially lawyers called to the bar in Ontario.

You cannot say you “specialize” or are “a specialist” in any type of law unless you have received a certificate of specialization from the Law Society.

Using the word specialize or specialist to describe your practice without such a certificate can get you in serious trouble, maybe not disbarred, but very serious trouble,.

So we make no claim to being specialists or specializing in anything, thank you very much.!  Also, there is no such thing as a certificate of specialization in tax law in Canada so we could not “specialize”, even if we wanted to …

When you are called to the bar, every lawyer is presumed to be competent in every area of the law.

Of course, this is clearly not the case. Its as though there were no such thing as Chemical Engineering or mechanical engineering, and there were just “engineers” and all engineers were presumed to be able to do every kind of engineering. No one knows everything, or even that much about anything but their field of law, especially these days. A good lawyer is effectively knows his field, but that field is “an inch wide and a mile deep” as they say.

So Garbutt Tax Law has “restricted its practice” to Canadian income tax, trusts and estates law, as a means of identifying the types of law that we understand best.

Tax law covers a wide field, including the taxation of corporations, trusts, partnerships and individuals, and, of course, non-residents of Canada who have or could have some interaction with the Canadian tax system.

It basically means that the firm will not take family law cases, criminal law cases, etc., that are not areas with which we are familiar as a practical matter.

We can help you make arrangements to deal with the appropriate lawyers in the appropriate jurisdiction(s).

Canada is a big place, and the law in each of the 13 provinces and territories is different, so you may need a number of lawyers, depending on what it is that you want to do.

There are corporate law, labour law and perhaps regulatory law issues.  But the first issue is determining how you are going to hold your Canadian business, both in terms of the formation of the entity, and who is going to hold the shares or other interests in that entity, if a legal entity is required.

You may just want to start out as a branch so that you can deduct the expenses of setting up the business in your home country.

There are a lot of tax issues that need to be worked out first. 

Therefore we can help you establish your business, first by helping you wrap your head around the concepts of what you want to do, and how you go about doing that in Canada in a tax efficient way over the short and longer term. Once we have that figured out, then we will assist you by taking advantage of our connections in various provinces to implement the structure consider optimal. 

Effectively, there is the practice of tax law, which involves the research and drafting of legal advice and opinions regarding tax efficient structures, then there is what could be called “the business of tax law”, which is implementing what the structure using whatever resources are necessary in each case.

There is no such thing as “international tax law”.  Each country taxes on the basis of its own set of rules.

However, as anyone who has ever done any international transactions of any size can tell you, the domestic tax laws of all the various countries do not always work well together.

Although legitimate corporations and law-abiding individuals, do not mind paying tax, they certainly mind paying tax in more than one jurisdiction.

The problem is that cross-border transactions, investments and involvements can result in tax arising in more than one country.

We practice Canadian tax law, and not the law of any other country, but we also cross-border tax law in the sense that we are very aware of the potential for double (or triple or quadruple) tax in countries other than Canada.

As a result, when we advise, we always take into account the fact that any cross-border transactions can give rise to taxation elsewhere, and advise accordingly.

We are also very used to dealing with entities and structures that interact with more than one jurisdiction, and so we plan taking into account the tax rules of other jurisdictions, as advised by counsel qualified in those jurisdictions.

We are also very aware of, and have worked extensively with Canada’s tax treaties with various countries, and we are therefore.

We have also worked on several international transfer pricing matters, both that the planning and controversy levels.

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