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Making Sure You Stay on Top of the CRA

Correcting a Mistake with CRA
The one mistake that you should never make is to avoid correcting a mistake that has been made regarding your taxes whether it is your error or theirs. The tax system is complicated even for a student, and this is one of the reasons it is advisable to use a quality account to try and reduce the chance of error as much as possible.

 

Here is a prime example of what can happen when a simple error is made with a tax filing.

 

“Revenue Canada wrongly took $11K from me: Carleton student…
.. An Ottawa woman says the Canada Revenue Agency took $11,000 out of her bank account for scholarship money she didn’t have to pay taxes on because she was a full-time student.
Heather Gilberds is a PhD student at Carleton University, and received more than $45,000 in scholarships in 2010.

 

Because she was a full-time student, she didn’t have to pay taxes on the scholarships, but she didn’t file the right form when she initially filed her taxes through H&R Block.

 

Gilberds has since been reassessed and repeatedly submitted the proper form, but CRA continued to claim that Gilberds owes $11,000 in taxes for the scholarship money.

 

She went back to H&R Block four or five times in 2011 and 2012 to deal with the CRA and resubmit the correct forms by fax and post. The agency repeatedly told her she either hadn’t submitted the proper form or it hadn’t received it, she said.
Gilberds received another notice in late January and decided to bring it to H&R Block with her in April when she filed her taxes for 2013….continue reading

 

Summary:
This is a most unfortunate situation but one that shows that cannot disregard anything that takes place with the CRA. This student obviously did everything she thought was right by submitting the proper form, but the breakdown was when the CRA kept telling her they had not received it. It is hard to say how much more she could have done on her part, other than what she did.

 

It does cause one to question as to what in the world was happening at the CRA? Are they short on manpower? Or is there lack of qualified staff to be able to resolve this matter? According to the comments quoted in this particular article of the CRA they say that… “if a taxpayer disputes their assessment or reassessment, he or she can file a notice of objection.”

 

Does this mean that no matter what kind of mistake or issue you may have with the CRA you should automatically file an objection instead of addressing the problem directly? If so this seems like it could potentially cause a horrendous backup up objections, when most likely many of them could be corrected immediately at the first contact.

 

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Sam Seidman, CPA, CA, LPA
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