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Ways that will attract undue attention of Canada Revenue Agency
3-24-2015
Are you attracting undue attention from the Canada Revenue Agency? Just like a detective, the Canada Revenue Agency creates statistical profiles of suspicious activity. Those profiles are used to ferret out tax cheats and ensure the tax-paying population plays by the rules.
As the Canada Revenue Agency and analyzes patterns of behavior in the general taxpaying population, they also look for discrepancies in tax reporting. That’s when you report an income that’s lower than what your employers have reported to the Canada revenue Agency on your behalf. Or the name you’re using doesn’t match Canada Revenue Agency records. That can be the first tipoff to a Canada Revenue Agency’s auditor that something is amiss.
Every year some Canadians seem determined to attract the scrutiny of the Canada Revenue Agency and its army of auditors.
Some of those attention-getting triggers are:
• Automobile expenses – failure to keep log bog and claiming 100 business use of automobile.
• Ignoring the CRA's requests for further information.
• Recurring losses from a rental property.
• Being self-employed and claiming excessive expenses.
• Recurring losses from a rental property.
• Ignoring the CRA's requests for further information.
• Large or unusual changes in deductions or credits.
• Claiming hefty home-office deductions.
The vast majority of Canadians pay their taxes in full. Those tax dollars mean we all benefit from government-funded services and programs that make our lives better. More and more Canadians are coming forward to correct their tax affairs.
Second chances don’t often happen in life. But if you have ever made a tax mistake or left out details about income on your tax return, the Canada Revenue Agency (CRA) is offering you a second chance. The Voluntary Disclosures Program (VDP) gives you the opportunity to come forward, make things right, and have peace of mind.
Filing a valid voluntary disclosure with the CRA means you would pay only the taxes you owe plus interest, and you may avoid penalties and potential prosecution on the information accepted under the program. You can file a disclosure to correct inaccurate or incomplete information or to provide information you may have omitted in your previous dealings with the CRA.
Footnotes: Footnotes: This column is presented as a general source of information only and is not intended as a solicitation for business. It is always recommended that you consult a qualified tax professional beforeembarking on any of the suggestions outlined above. Mohammed Yasin, CGA, is the principal of M. Yasin & Co. Inc., Certified General Accountants and has offices in Vancouver & Surrey,B.C. For more information on this topic or any other taxation matters, please contact taxes@alameen.ca.
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