Audits

In Alberta corporations have to file what amounts to an annual registration / licensing fee.  It is kind of like renewing your license plate for your car.  The annual cost to file is between 50 and 100 dollars.  This is not something your accountant can do unless they have special programs and access set up directly with registries.  You are responsible for taking care of this yourself unless you have confirmed that your accountant can and will do this for you.  It will usually cost you extra to have your accountant do it for you.

For those of you who have ever wondered why I (and most accountants) keep their hair so short it is really a matter of hair preservation.  If my hair was longer I would have pulled it all out from sheer frustration.  Frustration with what you ask?  Really?  You have to ask?  Frustration from dealing with the *&^%$#@^&*%$@#  CRA of course.  I have tried alcohol, which helps a little, but at the end of the day I have found a punching bag and a 4 mile run to be way more effective.

OK if you read the blog titled Appeals vs. Taxpayer relief then you have the back story.  If not go read it.  Its good and its informative.  If you are following the dates these things get posted then you may be thinking “wow! The CRA got back to Kevin in like 3 days?”  Don’t be ridiculous.  I am just getting sloppy about posting things when they happen.  Come on.  The CRA are slow and you should know that by now.

Yeah here I go again.  I am going to bitch about the CRA and specifically about how slow they are.  What was that?  How slow are they?  I am so glad that you asked.

Part of being an accountant is making sure you are up to date on new accounting practices and understanding new tax changes.  Another part is staying up to date on how the CRA operates.  Yes even I am continually learning things.

Recently I learned that there is only so much that appeals can do.  I am now going to share what I learned with you.  Everybody know what time it is?  Yup, “it’s story time!”

“Let’s get to it. Its Story time!”, again. I just met with a client who told me an interesting story. While dealing with the CRA on other matters the client was told by the agent that two GST returns had not been filed. The agent went on to tell the client that they needed to be filed immediately and that the CRA had estimated how much he owed. The agent also stated that the amounts should be paid immediately. The client told the agent that he had filed the returns, and paid them, and had proof. The agent said that they would require proof in order to make any changes.

Sometimes you just need to take the path of least resistance. It may not always be the most correct or the best way, but so long as it is correct it is still a valid choice. All too often people get caught up in doing things perfectly or the exact way they envisioned as being “correct”. Let me explain. Most people file their GST returns with expenses that apply to the period being filed. Makes sense however, GST credits (expense items you paid GST on) can be claimed in any period up to four (4) years after they were incurred.

I have met more than a few people who I would classify as being wearers of Tinfoil hats. You know the type of people who think the government is scanning their brain, and that the aliens are going to find them and harvest their organs unless they are “off the grid”. These same people are afraid of the CRA “knowing” how much money they have, where they do their banking, knowing where they live, etc., and think that any amount of tax is too much.

For those of you who regularly read my blog you may have noticed a pattern. I am usually bitching, complaining, and telling you how bad the CRA is at almost everything. I am always right and have the proof to back it up. All my stories are true and based on actual events. That said, NEVER let it be said that I am not fair. “Story Time!!!”

If you have ever heard the phrase “100% tax deductible” and believed it keep reading. I hate this phrase, amongst many others, because it is misleading and just plain WRONG! This phrase makes most people think that if they spend $1 then they will save $1 in taxes. If you haven’t figured out based on my tone of voice that this is wrong then here it is. THIS IS 100% WRONG AND 100% BS!!!

Time for a word of warning. Paying cash for things is ok and is totally LEGAL. After all cash is legal tender and it is not against the law to use cash. But if you want to claim cash payments made for business purposes as a tax deduction you better (MUST, MUST, ABSOFRIGINLUTELY MUST) have invoices that document the expense. You also MUST have withdraws that correspond directly to the amount of the invoice. You MUST be able to directly correlate invoices and payments. Have I used the word “MUST” too much? I don’t think that I have used it enough, because this is important.