SOURCE: Mew & Company

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July 20, 2017 13:00 ET

Vancouver Accountants Discuss Next Steps When the CRA Assesses for More Taxes

Vancouver accountants explore what happens when the CRA discovers an omitted income slip or RRSP withdrawal

VANCOUVER, BC--(Marketwired - July 20, 2017) - As a team of Vancouver accountants, the team at Mew+Company understands that accidents happen. It's already been a few weeks since the filing deadline for 2016 personal income tax returns, and the CRA has been busy sending out notices of assessment. In rare cases, the notices may state that the taxpayer owes more than the amount calculated by the accountant. There are a small number of reasons this happens, but when it does, it's best to act quickly. To read more, go to: http://www.mewco.ca/blog/cra-assessment-owe-more-taxes/

Every year the amount of tax-related information stored electronically by the CRA on each taxpayer is increasing. Tax-related data sent to the CRA from institutions, such as banks, also grows annually. Information such as employment income (T4, T4E, T4P, etc.), investment income (T3, T5, T5013, etc.), and RRSP withdrawals (T4RIF) are all provided to the CRA directly by institutions. In fact, most of this information is provided electronically, which means it is uploaded into the CRA's databank readily.

If a taxpayer receives a notice that more than the amount calculated on the return is owed, it's likely because an income slip or RRSP withdrawal has been omitted. In this age of electronics, the CRA can determine which slips are missing very quickly. In the case of employment income (the T4 related slips), this information is already in their databank, filed under the taxpayer's SIN even before the return is filed.

If a mistake is discovered-and it's easy to do when the information is widely spread over paperwork and online-it's important to rectify the problem as soon as possible. Repeated failure to report an income can result in a penalty of 20% of the unreported amount, or 10% at the federal level and 10% at the provincial level-and that's in addition to the taxes owing.

It's frustrating when a taxpayer receives a notice indicating that money is owed on a forgotten RRSP withdrawal made in 2016, but that doesn't change the fact that money is owed. Additionally, it's important to be diligent over the next few years to ensure that amounts owing aren't compounded by steep penalties.

The bottom line is that it's important to take the necessary time when compiling tax information. For Canadian taxpayers who require extra expertise, we're Mew+Company, and we're here to help.

About the Company

At Mew + Company, we've got the solution to your taxation problems. With a simple philosophy of building long-lasting customer relationships, the company has been serving corporate clients in a variety of fields-including restaurants, real estate, retail, and the service industry. Investing in their specialist services will undoubtedly be fruitful for all kinds of clients.

To learn more about Mew + Company and discuss their services, log on to http://mewco.ca/

Contact Information

  • Lilly Woo
    CPA, CA, CFE, CFP
    Mew + Company Chartered Professional Accountants
    604 688 9198
    Company Website: http://www.mewco.ca