Have you ever accidentally forgotten to add in something to your taxes? What do you know about the CRA�s �repeated failure to report income� section? The penalties are blindsiding Canadians with inadvertent slip-ups. For instance, tax slips sent to an old address, late-arriving slips, lost slips, forgotten slips including unreported ebay income is now your responsibility. CRA is now actively giving out 20% penalties on missing information. A dear friend explained how she became aware of this: �I got a cheque from Manulife for work done by my dentist. Manulife, of course, will report this. But if I fail to report it, it will be noted. If I do it again within 4 years, I will be penalized.�
The CRA has upgraded its system in matching T-slips. They will red flag your account if revenue is not reported. If it happens twice in the last four years you are in for a 20% penalty. The penalty is a combined 20% federal-provincial rate that may be applied to the amount of the unreported income.
�Where a taxpayer fails to report income more than once over a four-year period, a penalty based on the amount of the most recent unreported income is justified,� the department said in an email to CBC News.
CBC News spoke to accountants who stressed the importance of listing every T-slip on tax returns. �Anyone who doesn�t report a T-slip is foolish,� MacIntyre says. �It�s going to get picked up.� MacIntyre notes that the CRA�s matching program doesn�t begin until the fall. That�s when the CRA�s computers begin to match the slips taxfilers have reported with the ones that the issuers filed with the CRA. So you do have some time to report slips that were left off your return, but don�t wait too long.
This rule just goes to show you how serious the CRA is about people forgetting/omitting information from their tax return. It is always a good idea to compare your current year information to the tax return that you filed last year to ensure that you have not missed anything.
A T1 Adjustment Request form is available on the CRA website. However, if you voluntarily tell CRA about an amount you failed to report and/or an overstatement of credits, CRA may waive this penalty. For more information, see Voluntary Disclosures Program and IC07-1, Taxpayer Relief Provisions. Know your rights with http://www.cra-arc.gc.ca If this forwarding is to late, another option is to amend the tax returns with the correct information. This option is less desirable than the VDP, because it does not necessarily provide for interest relief nor will penalties always be waived. However, some auditors may be forgiving and will cancel any penalties that would otherwise apply.
Check your last 4 years filed. Don�t be a re-offender. Now that you are aware of how much this could potentially cost you, tell everyone you care about how to protect themselves. On average, it is estimated that each penalty works out to almost $1000.00 The CRA collected $39 billion dollars last year. Don�t support them this year. For more valuable information, visit www.prudentcreditrepair.ca