Where a taxpayer, HST registrant, or payroll employer misses a filing deadline, CRA will assess non-filing penalties on tax returns. These vary depending on the issue. If you have several years of outstanding returns, particularly if you do not respond to requests to file, the CRA may issue "arbitrary" Notice of Assessments that roughlu estimate income in a year, often include penalties, and allow the CRA to collect on the balance. These estimates tend to significantly overstate taxes owing, because the CRA assesses very few expenses, credits, or Input Tax Credits that offset HST.
A Notice of Assessment is a statement sent by the CRA to taxpayers which details the amount of income tax that they owe. Most often, notices of assessment follow filed returns. However, where a taxpayer has not filed a return, the CRA may assess the year or period unilaterally, in which cases they will take a very limited view of the taxpayer's entitlement to expenses, benefits, and credits. The CRA cannot apply any of their collections powers without first sending a Notice of Assessment. Where a taxpayer files a return, the CRA generally takes the return as filed; however, they may make smaller changes without consulting the Taxpayer and may conduct a review of the claims prior to assessing (see above)
A Notice of Ressessment is a second statement sent by the CRA that alters the results of the initial assessment. These typically follow either an audit/review or request from the taxpayer themselves to adjust the return.
Yes. You may be able to file a Voluntary Disclosure-see the discussion below.
