Taxes can be intimidating for some people. Don't let your tax return scare you. Think of this tax filing exercise as an open-book test. Did you ever write one of those? They gave you the book, for crying out loud. The answers are right in front of you. And to be truthful, filing your tax return is even better than an open-book test because there isn't always one right answer, and you're allowed to choose the answer that gives you the best mark - that is, the lowest tax bill - as long as you're not lying when you complete the forms.
Finally, unlike any test I've ever written, you can go back and change your answers after the fact if you discover you made a mistake or forgot something. And if you disagree with the grade you receive, you can often have it changed by a simple phone call or formal objection.
It's not enough to state as your reason for objection that 'the CRA is not being fair.' They'd have a good laugh at that one by the water cooler at the tax department, I can tell you.
Today I want to talk about what to do after you've filed your tax return and discover you've forgotten something, made a mistake or disagree with the assessment the taxman sends you.
Making changes Picture this: You send in your tax return thinking that all is well and then discover after the fact that another T-slip arrives in the mail a few days later. Or perhaps you're going through your files from last year's tax return and discover some receipts that should have been kept in this year's file - so they were missed when you prepared this year's return (you did check last year's file, didn't you?).
Could it be that you didn't forget anything, but simply made a mistake? Common mistakes include failing to transfer certain tax credits to a family member to save more tax (age, disability, pension, tuition, education, textbook, public transit and donation tax credits come to mind), forgetting some types of business expenses (did you claim capital cost allowance on your computer, desk or owned vehicles used in business?), forgetting safety deposit box fees, among other mistakes.
If you did forget something, or made a mistake, you can easily make a change by filing Form T1-ADJ (called an "adjustment request"). It's a one-page form where you simply make note of the lines on your tax return you'd like to change, provide an explanation
at the bottom, and send it in. No need to file a complete amended tax return. You'll find a copy of Form T1-ADJ on the Canada Revenue Agency's (CRA's) website at cra.gc.ca .
For all the tips, discussions and advice you'll need
Fighting your cause Once you've filed your tax return, you can expect to receive a Notice of Assessment within three to five weeks. If your tax return is not assessed as you filed it, you should take a close look at the change until you understand why the change was made. Speak to CRA to more fully understand the change if you have to.
If you disagree with your Notice of Assessment, you've got two courses of action to consider. Your first step should be a phone call to CRA to resolve the issue by phone if you can.
If that doesn't work, then you may want to file a Notice of Objection. You can use Form T400A to file your objection, which I like to do, but it's not necessary. You can also file an objection by stating in a letter the facts, your reasons for objecting and the change you're requesting. Address your letter to the chief of appeals at your local tax services office or taxation centre.
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Let me just say this: If you're going to file a Notice of Objection, you'd be wise to enlist the help of a tax professional to draft the thing. Why? Because your argument for your case should be based on tax law, CRA pronouncements and case law supporting your position. It's not enough to state as your reason for objection that "the CRA is not being fair." They'd have a good laugh at that one by the water cooler at the tax department, I can tell you.
Unless you're able to cite the appropriate references, your case could look pretty flimsy. I mean, if the issue were that simple and in your favour, you probably could have settled the matter over the phone. If you get to the Notice of Objection stage, you're going to be better off with help.
You've got to file your Notice of Objection on time: For individuals, the deadline is 90 days after the mailing date noted on the Notice of Assessment, or one year after the due date of the tax return that you are fighting, whichever is later.