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How many people know their rights when it comes to dealing with the CRA?  My guess is not many.  Did you know that the CRA posts your rights on their website?  This is all good I know until you get the phone call or letter out of the blue saying you owe lots of back taxes and by the way we are charging huge interest on it as well.  This type of thing usually scares the crap out of most people and they assume (we know what happens when we assume, right?) that the CRA are only doing w

Well here we go again.  I got a call from a lady in BC who had what is known as a desk review.  This is a mini audit usually done by part of CRA called Office Exam.  These “audits” are usually limited to one or two issues and are done via mail.  You get a letter saying to send all documents to the CRA for specific issues.  They review the documents send you a letter advising you of the outcome of the review (usually you get a bill with the letter – funny thing don’t you think).

If I ever find the mystical friend “Bob” that is out there giving people advice on everything from home improvement to taxes and accounting I am gonna kill him.  This is the person who has done everything, knows everything about everything and is always telling you what to do.  He is constantly whispering in your ear and giving you advice.  Now that I think about it he is probably related to “Murphy “, of Murphy’s Law fame (or infamy).  You know the “if something can go wrong it will” guy.

In the spirit of Halloween I thought that it would be appropriate to share a horror story.  But not just any horror story, a CRA horror story, which has to be scarier than any movie.

Rumour has it the CRA want to put a tax on Halloween Candy.  When the child goes to the door they would have a box around their neck and the candy giver would have to put 10% of the market value of the candy into the box.  The child would then have until November 10th  to submit the box to the CRA.  They want to call it HST (Halloween Snack Tax). 

Depending on who you talk to you will hear stories about the CRA having motivations to screw people or deliberately be unfair.  While I do not subscribe to this belief, I can tell you that it is always about the money.

I hate to sound like a broken record or be perceived as someone with a vendetta against the CRA, but I feel it is my duty to let everyone know that the CRA do make mistakes (regularly), can be hard to deal with, and are slow in dealing with requests.  You can do everything right and still end up with problems that seem insurmountable.  The keys to remember are these.  Always keep your source documents (especially payment advices and cancelled cheques).  Don’t assume that you (or your accountant) did anything wrong (it’s a 50/50 chance that it was CRA who screwed up).  Don’t give up.  Fight

Accounting and taxes are not usually comical, but I feel that we can all use a good laugh.  With that in mind please enjoy the story below.

Why Lawyers should never ask a witness a question if they aren't prepared for the answer:

This post is meant as a warning to anyone reading to make sure that you are diligent in documenting your expenses.  A new client came to us once they were already under audit and we had to pick up the pieces.  An interesting product of this was the realization that given the way society is changing it is harder to document all expenses.  Let me explain.

For those of you that have met me you know that I share what I know about the CRA.  Having worked there for 15 years I saw and experienced a lot of things.  Being out in the private sector now, I am seeing things from the opposite side of the fence.  Given my experience at the CRA I am in a position to share unique perspectives and information that are not common knowledge to most people.  Many accountants do not possess the knowledge that I do, which is why I try to share what I know with as many people as possible.