CRA – They Don’t Give Tax Advice

If you have concerns about your taxes DO NOT CALL the CRA.  The CRA don’t give tax advice, and will not try to give you alternatives.  If you call the CRA you will get an off the cuff answer from an inexperienced person that does not understand your specific situation.

If you have questions about what your accountant is telling you ask them for clarification.  If you don’t like the answer or don’t feel you are getting taken seriously ask another accountant.  Most accountants are happy to take on new business and will do an initial consultation for FREE!!

Tell your current accountant that you are unhappy and going to look elsewhere due to  your dissatisfaction.  This will usually motivate them to try harder.

If you feel you MUST call the CRA then write your questions down and then write down the answers you are given.  Most of the time (99%) you will find that you did not ask the right question, or that the CRA agent did not dig deep enough to give you a proper answer.

Story Time.  I have a client that called the CRA and asked the agent if they could switch from dividends to paying themselves a salary.  The CRA said that there would be penalties for doing this and that the penalties would be substantial.  Needless to say the client is now upset with me because they feel I let them down.

Problem is that the CRA answer is WRONG, or at best a half-truth (ok maybe a ¼ truth).  There are NO penalties for switching!!!  End of discussion!!  That said there are penalties for late payroll remittance.  But, if you do things in a certain way, timelines and deadlines change.  The CRA won’t tell you this, because they are not going to ask about your specific situation.  The agents aren’t knowledgeable enough to give you options.  In addition, most clients don’t know how to ask the proper question and give the proper amount of detail.  Further, there is a lack knowledge when it comes to understanding all the various ways there are to do things.  As I have stated in previous blogs the CRA agents on the phone do not have accounting designations, have no experience with tax planning, and have not been trained in shareholder loans (other than being told they are bad).  They have the least amount of training and frankly should only be asked to send you information.

If I haven’t been clear, then I will summarize:

1. DO NOT ask the CRA for tax advice!!It will be WRONG!!

2. Ask your accountant for clarification.If not satisfied find another accountant to ask.If still not satisfied keep asking different accountants until someone takes you seriously and can coherently explain things to you so that you are confident that you understand.