CRA Appeals & Tax Shelters

This blog is directed specifically at those of you who have made charitable donations through Pharma gifts, Mission Life, UHT, CHT, ATCLAP, or other organizations that are commonly known as tax shelters.  The premise is that you make a cash donation which yields you a much larger income tax credit due to revaluations, gifts in kind, and other “schemes”.

Beliefs and terminology aside what you need to know is that you must pay attention to every piece of paper you receive from the CRA so you do not have your taxpayer right taken away from you without your knowledge.

Most people know that they can Object to, and appeal, CRA decisions that you don’t like or that you don’t agree with.  What most people do not know is that if the CRA issues a reassessment on a year under objection (even if the issue is not related to the objection), then the objection is considered resolved.  This means that the CRA will start collection action on any unpaid amounts.

For example, you did a tax shelter in 2012, the CRA denied it, so you objected.  Along comes 2014 and CRA discovers you missed a 2013 T-5 slip for $100, which causes them to reassess your 2012 return.  Once that reassessment is issued the objection is considered resolved.  Now your tax shelter amounts owing become payable.

When this happens you have object all over again and get your objection in within 90 days, or request an extension and get your objection in within 1 year of the date of the new notice of reassessment.  If you miss these deadlines then there is nothing you can do.  This means you are stuck paying a bill that may have been reduced by appeal, by Court, or by settlement.

Pay attention to your CRA mail, and make sure that you or your accountant know what is going on and what to do to make sure that you don’t lose out simply because you did not understand the process.