Accounting and Taxes Thread

[DoubleF]

Originally Posted by Fuzzy14

Happy News (heavy sarcasm), it looks like bare trust filings will be coming in for 2025.

The rule technically never went away and I was expecting this. Honestly speaking the biggest part is ensuring that the individuals know they have to be heavily involved and take point on the filing. Unlike other filings, they can't just tell a tax preparer to figure out it and take back seat, because a lot of this stuff doesn't show up/isn't associated with the tax returns. With the individual taking point, bare trusts are not much worse than a normal trust filing.

However, my true annoyance is that lawyers, registries and banks are much more likely to have this information, but the responsibility is a tax preparer for ensuring the CRA obtains this information? Why not get those guys to prep the info and/or to send to the info direct to CRA any time specific situation arises that CRA wants to know about for bare trusts, and then issue letters to taxpayers to file when they have enough evidence they think there's something they want to know more about?

[Strange Brew]

I think you're making this out to be more complex than it really is.

Deemed disposition technically occurs at the moment before death, before assets are transferred to the estate.

An executor who hires a tax accountant who doesn't inform them of the deemed disposition rules, doesn't question them as to why there is dividend income with no corresponding deemed sale and who doesn't describe the clearance certificate process hasn't received very good service. Not trying to throw anyone under the bus, and I don't even know if the poster hired a tax accountant.

[calf]

A relative (who I do the taxes for) received a notice of re-assessment for their 2022 taxes.

An honest mistake - there was a T5 missing, so there is an amount owed. On looking at things, we realized that this T5 was also missing in 2023 and 2024. Was about to re-file for those years, but of course the notices of re-assessment for those years have come in basically a week later, and the penalties and interest have piled up before we had a chance to correct and pay the amount owed.

Basically, they didn't have the T5 before 2022, and the new slip was in their online banking (the bank defaulted to electronic, so and they and I didn't realize it was there when we were doing the annual taxes). Lesson learned.

My question - the oversight was an honest mistake, and we didn't have a chance to realize the error and make necessary corrections - we were in the process of doing so when the other reassessments and penalties were applied. Is there any chance of success if we phone CRA to appeal the penalties? Or would it be a waste of time and we should just pay and be done (the amount is worth it to try and get forgiven with a phone call if that's possible, but not so much that it's worth hours on end of arguing and waiting on hold).

[DoubleF]

Originally Posted by calf

A relative (who I do the taxes for) received a notice of re-assessment for their 2022 taxes.

An honest mistake - there was a T5 missing, so there is an amount owed. On looking at things, we realized that this T5 was also missing in 2023 and 2024. Was about to re-file for those years, but of course the notices of re-assessment for those years have come in basically a week later, and the penalties and interest have piled up before we had a chance to correct and pay the amount owed.

Basically, they didn't have the T5 before 2022, and the new slip was in their online banking (the bank defaulted to electronic, so and they and I didn't realize it was there when we were doing the annual taxes). Lesson learned.

My question - the oversight was an honest mistake, and we didn't have a chance to realize the error and make necessary corrections - we were in the process of doing so when the other reassessments and penalties were applied. Is there any chance of success if we phone CRA to appeal the penalties? Or would it be a waste of time and we should just pay and be done (the amount is worth it to try and get forgiven with a phone call if that's possible, but not so much that it's worth hours on end of arguing and waiting on hold).

You could attempt to do a taxpayer relief filing, but it's not guaranteed. It's just a hail Mary attempt to reduce penalties/interest. Honest mistake wise, you'd have needed to VDP before CRA figured it out. Since CRA already figured it out in your case and calculated an amount, VDP is now sealed. You're limited to CRA's mercy via taxpayer relief and CRA hasn't really been very lenient on that for a while.

The main reasons CRA might waive it would be the taxpayer is in a financial distress situation, certain illnesses and/or death of taxpayer. But it's not a guarantee the CRA would reduce or waive interest and penalties even if those criteria were met. Because it's a 3 year thing with the same type of error, CRA may waive one year but not the others. I honestly don't know. CRA has been so random in the last few years.

I'd still recommend doing the taxpayer relief application to see if you get lucky, but don't get your hopes up. The application isn't arduous, but it still takes occasional time over a period of time for waiting/communicating. Because it's not guaranteed, it may make sense to discuss whether paying the whole balance in full (taxes plus interest and penalties) prior to applying for arrears interest relief.
https://www.canada.ca/content/dam/cr...rc4288-25e.pdf

[Locke]

That one gets on my nerves like almost nothing else.

"You have to pay this money and these penalties because you didn't include these slips in your filings!!!"

Um. Those slips didn't exist when I filed those returns. Realistically, the chumps who made them late should pay any penalties.

[calf]

It's not even so much the slips were late, it was that the bank sent them to a spot no 80 year old would ever think to look.

and also the reassessing 2-3 years at once to get the penalties tacked on. At least send one year a provide a bit of grace to do the review/adjustments required on other years.