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.

[calgarygeologist]

I figure this might be a good place to seek out some initial advice on working remotely for a US company. I don't know a lot about these situations outside of some very basic understanding of double taxation. I have a call setup with my former Manager who is now the CFO for a company in Washington state. There is an opportunity to bring me on in the near future and it would be a full time role but I would work remotely from Calgary with the occasional trip out to the head office.

What should I know about taxes, currency conversion of my salary, how benefits might work and other aspects of this type of scenario? I'll hopefully know more details on Friday.

As a side note, my former Manager did end up moving to Washington to actually work out of the HQ.

[Locke]

I have some considerable experience with that, but there are a lot of different things to take into account.

Is this a job or a contract?

[calgarygeologist]

Originally Posted by Locke

I have some considerable experience with that, but there are a lot of different things to take into account.

Is this a job or a contract?

Full time position, not a contract role. I'll definitely lean on you and get tax support if this goes through. I also learned that they do have a bunch of folks that work in Calgary or other parts of Canada including the HR Director so that makes me feel like they should be well set up for these employment situations.

[Locke]

Originally Posted by calgarygeologist

Full time position, not a contract role. I'll definitely lean on you and get tax support if this goes through. I also learned that they do have a bunch of folks to work in Calgary or other parts of Canada including the HR Director so that makes me feel like they should be well set up for these employment situations.

Yeah, in this town thats not an uncommon scenario, I have a few clients in very similar situations, hence why I'm familiar with it.

[Language]

Originally Posted by calgarygeologist

I figure this might be a good place to seek out some initial advice on working remotely for a US company. I don't know a lot about these situations outside of some very basic understanding of double taxation. I have a call setup with my former Manager who is now the CFO for a company in Washington state. There is an opportunity to bring me on in the near future and it would be a full time role but I would work remotely from Calgary with the occasional trip out to the head office.

What should I know about taxes, currency conversion of my salary, how benefits might work and other aspects of this type of scenario? I'll hopefully know more details on Friday.

As a side note, my former Manager did end up moving to Washington to actually work out of the HQ.

They can hire you through an EOR (Employer of Record), like Deel, where you would be getting paid a salary in Canadian dollars, have taxes remitted at source, and would be eligible for benefits. You would technically be employed through the EOR.

Alternatively, if the company is open to it, they can simply hire you as a W8 contractor, via a consulting agreement, and they can pay you a gross monthly salary in USD, to your Canadian bank account. You would just open a USD account. They would be hiring you with the understanding of it being a full time role, but technically it would be structured like a contractor/consulting agreeement.

There are pro’s and con’s to both. If the company hires you through an EOR, they would most likely offer you less as a salary, because they are still responsible for benefits and payroll taxes. Conversely, you would be eligible for whatever benefits plans they have enrolled into through the EOR and can offer you.

Or if they hire you as a contractor, you can likely negotiate a higher salary because they are not on the hook for any payroll burden (which can be anywhere from 15%-30%). However, you wouldn’t be eligible for benefits, and would need to seek private coverage if desired. Also, you have slightly less protection if they choose to terminate you, since you’re technically just a contractor.


Sent from my iPhone using Tapatalk

[Strange Brew]

Originally Posted by calgarygeologist

I figure this might be a good place to seek out some initial advice on working remotely for a US company. I don't know a lot about these situations outside of some very basic understanding of double taxation. I have a call setup with my former Manager who is now the CFO for a company in Washington state. There is an opportunity to bring me on in the near future and it would be a full time role but I would work remotely from Calgary with the occasional trip out to the head office.

What should I know about taxes, currency conversion of my salary, how benefits might work and other aspects of this type of scenario? I'll hopefully know more details on Friday.

As a side note, my former Manager did end up moving to Washington to actually work out of the HQ.

No reason for you to take on currency conversion risk in this role. As long as you live in Canada, your salary should be agreed and paid in CAD. Feel free to speculate in USD if that is your thing, but no way should your primary income be in anything other than your home currency.

[Shazam]

Imagine the brainpower.

https://ca.finance.yahoo.com/news/cr...134545855.html

[DoubleF]

Originally Posted by Shazam

Imagine the brainpower.

https://ca.finance.yahoo.com/news/cr...134545855.html

IMO, CRA's enquiry into this is logical against $130K of moving costs, but I am also happy that the taxpayer prevailed.

Originally Posted by calgarygeologist

Full time position, not a contract role. I'll definitely lean on you and get tax support if this goes through. I also learned that they do have a bunch of folks that work in Calgary or other parts of Canada including the HR Director so that makes me feel like they should be well set up for these employment situations.

Yeah, details are key here. It kinda sounds like the company has a permanent establishment in Canada/Calgary, so you might end up just picking up T4 slips as normal vs maybe a 1099 form. Should be relatively straight forward.

Just be aware that the funky stuff might happen if there are ESO or something that aren't fully going through the T4. This is a scenario to make sure to give all details to the tax prepper, regardless of how insignificant you think they may be. Let the tax prepper determine if it's insignificant or not, don't make that decision yourself. I helped a buddy sort out an issue where multiple jurisdictions were fighting each other for taxes, leaving him in the middle of a double taxation issue due to the way his tax forms were. Yes, there's tax treaties, but sometimes the money is already gone because it's employer remitted in error and you're fighting to get it back.

[Shazam]

I didn't think the costs were at all unreasonable. Like why wouldn't you deduct the cost of selling your home?

[DoubleF]

Originally Posted by Shazam

I didn't think the costs were at all unreasonable. Like why wouldn't you deduct the cost of selling your home?

I didn't say the cost was unreasonable. I'm just saying I get why CRA challenged it. I think it's a reasonable challenge. I'm happy the taxpayer won as their assertions are reasonable too. For $130K in deductions, CRA for sure is going to investigate it and challenge it, regardless of whether it's moving, donations, medical etc.

The 32.8km vs 47.4km difference has merit, but the time required to traverse those paths is also needs to be addressed which is what the tax judge did.

I guess I've just been dealing with completely unreasonable challenges and reassessments, that at least for this one, it's kinda refreshing to see one where both sides have reasonable belief they are correct vs some CRA trying to pull some underhanded bull####.

ie:
"Based on our matching program, you have more investment income than what we are expecting on the registered slips. Prove it."
You're getting more income/taxes than you expected, wtf you wasting our time for?

or

"We reduced your donation credits to $0 because we don't know if you actually donated."
- WTF is this bull####? Why didn't you do a request for information for the slips?

[calf]

Originally Posted by DoubleF

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

Just to close the loop on this, after talking to another buddy who does a lot of personal taxes as well, he said 'oh yeah, this is happening lots...good luck and if you succeed, let me know how you did it". So, with the penalties/interest not being overly huge, we decided not to waste our time and just pay the tax, interest and penalties for 2022/2023. Refiled and immediately paid 2024 taxes to avoid it getting caught/hit with further penalties, but they charged a whopping $12 in interest for our troubles. The lesson being - have the seniors in your life check all their online accounts that have any sort of money, etc, in case they send tax slips there instead of by mail!

[DoubleF]

Originally Posted by calf

Just to close the loop on this, after talking to another buddy who does a lot of personal taxes as well, he said 'oh yeah, this is happening lots...good luck and if you succeed, let me know how you did it". So, with the penalties/interest not being overly huge, we decided not to waste our time and just pay the tax, interest and penalties for 2022/2023. Refiled and immediately paid 2024 taxes to avoid it getting caught/hit with further penalties, but they charged a whopping $12 in interest for our troubles. The lesson being - have the seniors in your life check all their online accounts that have any sort of money, etc, in case they send tax slips there instead of by mail!

If that's all you got dinged for, start the car! Totally worth $12 to close the loop earlier.

CRA recently also stated they are changing the VDP program. The maximum penalties to be waived via VDP is no longer 100%. It seems that going forward, almost everyone will have to do both VDP and taxpayer relief at the same time to see if they can get it 100% waived.

[Shazam]

Originally Posted by DoubleF

I didn't say the cost was unreasonable. I'm just saying I get why CRA challenged it. I think it's a reasonable challenge. I'm happy the taxpayer won as their assertions are reasonable too. For $130K in deductions, CRA for sure is going to investigate it and challenge it, regardless of whether it's moving, donations, medical etc.

The 32.8km vs 47.4km difference has merit, but the time required to traverse those paths is also needs to be addressed which is what the tax judge did.

I guess I've just been dealing with completely unreasonable challenges and reassessments, that at least for this one, it's kinda refreshing to see one where both sides have reasonable belief they are correct vs some CRA trying to pull some underhanded bull####.

ie:
"Based on our matching program, you have more investment income than what we are expecting on the registered slips. Prove it."
You're getting more income/taxes than you expected, wtf you wasting our time for?

or

"We reduced your donation credits to $0 because we don't know if you actually donated."
- WTF is this bull####? Why didn't you do a request for information for the slips?

And I'm saying that $130K in moving expenses is normal, and that's there no reason for CRA to challenge it. Sure, they can review it internally, but they do that for everything, seeing as I how get reassessed for $50 every year.

[DoubleF]

Originally Posted by Shazam

And I'm saying that $130K in moving expenses is normal, and that's there no reason for CRA to challenge it. Sure, they can review it internally, but they do that for everything, seeing as I how get reassessed for $50 every year.

As far as I can tell, any deduction over $2,500 gets automatically reviewed by the CRA. That's why I mentioned the amount. As far as I can tell, almost all moving expense claims are automatically reviewed as I have seen reviews even below that arbitrary threshold I've noticed. The crux of CRA's issue also wasn't the $130K. It was the 40+km part of the moving expense rule.