I received a link to the following article from LEDGERS.COM. Their experience pretty much mirrors our own:
As Canadians, we have an inherent obligation to pay taxes; we also have rights under “The Taxpayer Bill of Rights” CRA however, does not seem to believe in a lot of these rights lately.
We have seen directly and heard from other Accounting Firms, how unbelievably aggressive the CRA has become lately, and how they have thrown the rules out the window.
Here are a couple of examples:
Client A had no payroll to report in 2016 so there were no T4’s issued. (they had payroll in 2015); The CRA arbitrarily assessed them for the missing taxes, plus interest and penalties amounting to a total of more than $30,000!
Since the client refused to pay, the CRA seized the client’s bank account! When the client called CRA to explain, they would not listen. The CRA’s position was “pay the amount owing, then we will discuss it”.
If you owe money to the CRA, and try to negotiate a repayment
schedule, you will always get the same response: “You have only 6 months to pay the outstanding balance”.
NOWHERE in the Income Tax Act does this appear! What the Act says is: “payment arrangements are to be made based upon the taxpayers ability to pay”
CRA’s Commitment to Small Business says ”The Canada Revenue Agency is committed to administering the tax system in a way that minimizes the costs of compliance for small businesses”
Again, this is hard to believe;
Client B had a GST Review. The CRA did not like the way the books (computer program) listed the GST charged and the ITC’s.
They forced the client to redo the books to show the information in a format that was acceptable to the auditor. THIS is not required under the Excise Tax Act! The Act states that the taxpayer must be able to provide RECEIPTS and other supporting documentation to justify the amount of the ITC being claimed; this has also been upheld numerous times by the Tax Court of Canada.
So why does the CRA feel they can force taxpayers to incur tremendous costs in reprocessing information? Simple – they are trying to cut costs (for themselves)! They rarely have field audits anymore;
it is up to the taxpayer (or their accountant) to prepare the information (in a format acceptable to the CRA, not what legislation requires), then to send it to CRA either via fax (ancient technology) or by file upload through the CRA website (cumbersome at best).
They are transferring the costs of the reviews to the taxpayer!
Have you tried to call the CRA lately?
The General Business Inquiry number is busy more often than not. If you do get through, plan on waiting for someone to answer.
Requests for changes? Good luck. We have seen items that are supposed to take 14 days take several months and longer.
The CRA is so focused on collecting tax dollars, that they have completed neglected their other obligations.
Rule # 6 – “You have the right to complete, accurate, clear, and timely information”.
Where did timely go?
Of course, if they want information from you, you better get it to them immediately or else.
Perhaps it is time for our politicians to stop trying to find ways to further tax and burden small business and to work together with small business to streamline the CRA policies and procedures.