Legal Tax Filing Obligations
As a resident of Canada receiving taxable income, you are obligated to file an annual T1 Income Tax Return each year. Canadian Corporations have an obligation to file annual T2 Income Tax Return. In some cases, Partnerships and Not-For-Profit Corporations must file annual Information Returns. Businesses who are registered for HST must file remittances each month, quarterly or year depending on the size of the business.
Many individuals or corporations are not up-to-date, and have unfiled Income Tax Returns or GST Remittances.
Unfiled Income Tax Returns
If you have several years of unfiled income tax returns, the CRA could issue arbitrary Notice of Assessments which demand that you pay tax on false earnings. These types of assessments typically require you to pay more tax than you would have if you had filed returns. This is because in notionally assessing you, the CRA imputes the highest earnings figure and does not consider business expenses to offset business income or Input Tax Credits to offset GST/HST owed.
You may also face late filing penalties. If you owe taxes and did not file your income tax return on time, the CRA will charge you a late filing penalty of 5% of the income tax owing for that year plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Repeated late filing penalties increase the penalty rate to 10% for that year plus 2% per additional month.
What to Do to Correct Unfiled Returns
If the CRA has not contacted you regarding your late filings, you may be eligible for the CRA’s Voluntary Disclosure Program (VDP), which would allow the CRA to waive some or all of the penalties and some of the interest levied. If you are eligible for the program, our experienced income tax lawyers will prepare and submit this application for you.
Next, our tax lawyers will prepare your outstanding returns. If you have been notionally or arbitrarily assessed, our income tax lawyers will replace the false figures with actual amounts, which will substantially lower the income tax or GST/HST that you owe. If you have not been notionally assessed, we will prepare and coordinate the fresh filing of your returns, including personal income tax returns, corporate income tax returns, GST/HST returns, and payroll remittances.
In some cases, you may have failed to file your taxes because of extenuating circumstances beyond your control, such as having a medical illness or having to deal with a natural disaster. In this case, you may qualify for the Taxpayer Relief Program.
Why you Need a Tax Lawyer
We will provide the following services to help you stay current and up to date with your tax returns:
- Prepare your outstanding tax returns and fresh filings for personal income tax, corporate tax, GST/HST returns, and payroll remittances
- Determine whether and how much GST/HST you need to collect on your employees’ tax benefits
- Recover some of your GST/HST that you paid on purchases related to operating your business through input tax credits
- Determine if you qualify for the Voluntary Disclosure Program and coordinate information disclosures
- Coordinate payment arrangements on the outstanding amounts owed, if any
- Determine if you are eligible for the taxpayer relief program and coordinate the information to substantiate the claim
With years of experience in corporate law and tax law, Kalfa Law is your premier legal advisor for all your tax needs. Our tax lawyers will obtain the ideal outcome for you and seek to reduce and/or eliminate the penalties and interest that otherwise would have been levied.
Unfiled tax returns? We’re here to help™.