When the average Canadian tax payer is attending to their tax matters and filing their Canada tax yearly returns they often refer to the standard guidelines and bulletins that are freely given away by the CRA. These are pretty basic and work well for direction as to how to fill out the tax forms. The problem is although they do provide some good examples many tax payers may run into unique situations, and these general guides just don’t give them enough guidance.
Then there is always the opportunity to call the CRA hot lines for tax inquiries. The issue with this is that you will get information which is based on the opinion of the tax official taking your call, however if it is a complex matter you cannot be sure that you are going to get all of the information you need, or even if the opinion is valid. There have been times where tax payers have followed this type of information and after filed their taxes based on it only to have it bounced back as being incorrect. The bottom line is the tax laws of Canada are based on interpretation. For big or complex tax matters there is a CRA resource called “Advanced Rulings.”
These special rulings are where you can formally submit your tax issue and supporting documentation to a specialized section of the CRA that will review the tax matter in depth, and give you a ruling pertaining to your issue. The advantage of this is that it can save you a lot of time and work in doing your taxes one way, only to find out that you were not allowed to claim or file that way. Or it can be valuable if you are structuring or re-structuring a business and you have some options that would directly affect your tax affairs.
Now one would think that when it came to the laws of the country that we must abide by, that we should be provided with all the resources to fully understand them without any charge. Not the case however, because if you want an “Advanced Ruling”. It is going to cost you. This particular tax department will charge an hourly rate to compile its ruling. You will be asked to pay a set amount when you submit your application. If less time is used the balance from what is owed will be refunded to you, or you could be billed if you run over the amount you have already paid.
The best thing you can do if you have a complex tax matter is utilize the services of a Toronto accountant, such as myself who has the knowledge and experience of dealing with tax matters. Utilizing the expertise of professionals like us usually means there is valid tax data to rely on to support the right tax filing decision. One thing you don’t want to do is just go ahead and file your taxes based on limited knowledge.
