We solve serious CRA tax problems

CRA & Unfiled Tax Returns

When dealing with CRA unfiled tax returns, you don’t need a tax lawyer. At Faris CPA, we’ve been assisting with CRA unfiled tax returns and saving taxpayers unnecessary legal fees for over a decade.

Unfiled tax returns should be addressed sooner rather than later so that you can get up to speed and avoid additional consequences. Contact the professionals at Faris CPA today for an assessment. Call 1 (844) 340-5771 or use the contact form to get started.

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About Sam Faris, Licensed Public Accountant

Tax Return Obligations

Canada has a self-reporting tax system. This means that it is each taxable entity that is required to report its income to the government by filing the appropriate tax return.  These returns include a T1 General for individual taxpayers, a T2 Return for corporate taxpayers, and a T3 return for trusts.  There are many other types of returns that apply to particular circumstances. Talk to your tax expert to see what your return filing obligations are.

Individuals

For individuals, the tax year is the calendar year (January 1 to December 31).  Individuals have to file a tax return (T1 Return), for the preceding tax year, either on or before April 30th, if they are employees, or on or before June 15th if you or your spouse earned business income.  If the individual taxpayer doesn’t have any Part I tax payable for the preceding year, then no T1 needs to be filed. Most people interpret this exemption as no balance being due (for example, if your employer has withheld enough tax from your paycheques and you don’t owe any more or are entitled to a refund).  However, the requirement is that you have file a return IF Part I tax is payable (whether paid or not).  Therefore, individuals earning income above the basic exemption threshold have to file a tax return annually.  There are special rules for deceased individuals in their year of death, as well as for their surviving spouses.  These special rules can be complex and it would be best to get the help of a tax expert so you reduce the amount of tax payable.

Trusts

Trusts are also required to file tax returns for each of their tax years (also the Calendar Year). Trustees are required to file a T3 return within 90 days from the end of the tax year.

Corporations

Corporations can have an off-calendar fiscal year, which also becomes their tax year.  A corporation that is required to file a tax return has to file its T2 return within six months of the end of its fiscal year.  It is important to remember that a return due date may be different from when the balance of taxes is due so as to avoid interest being charged on the balance outstanding.

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TAX AUDIT EXPERTS IN TORONTO

Unfiled Tax Returns

Unfiled returns or incompletely files returns are a common problem for all types of taxpayers. If you do not file a return as required, the Canada Revenue Agency (CRA) can make a demand that you file your returns.  Alternatively, the CRA can assess you arbitrarily – they will use some method to take a guess at your income, leaving you with the almost impossible task of having to prove them wrong.  Unlike in most cases, when it comes to taxes, it is the taxpayer’s obligation to prove the CRA wrong, not for the CRA to prove that they are right.  To avoid the burden that comes with unfiled returns and the CRAs often draconian actions in relation to them, take unfiled returns very seriously.  It can be overwhelming dealing with returns for a number of years, but that is what a tax expert is here for – to lend you a hand and take on some of the burden of getting yourself current with your tax filing obligations.

If you fail to file your return on time, you will be subject to late filing penalties.  The penalty is 5% of the balance owing PLUS 1% of the balance owning for each full calendar month your return is late (to a maximum of 12 months). If you’ve previously been charged late filing penalties in one of the past three tax years, the penalty doubles to 10% of the balance owing PLUS 2% of the balance owing for each full calendar month the return is late (up to a maximum of 20 months).  In addition to the penalties, if you have a balance owing, you will also have to pay compound interest on the balance outstanding for as long as the balance has not been paid in full.  Interest and penalties can quickly add up to exceed the amount of tax owing, sometimes resulting in people losing their possessions or having to file for bankruptcy.  You can see how important it is to get help to quickly become current in your filings if you are delinquent.

CRA Voluntary Disclosure

There are many sources of information that the CRA has access to, allowing them to find people who are required to but have failed to file tax returns.  If you have unfiled returns, or if you have filed returns but either not reported all income you were required to report or have misreported amounts, you may be eligible for the CRA’s Voluntary Disclosure Program (VDP).  The VDP is a special program that provides taxpayers with an opportunity to come clean or become current with the incentive that, if you meet the criteria, you don’t need to pay penalties, get to cancel some of the interest, and won’t face criminal prosecution.  The monetary savings can be huge.  Time is of the essence when it comes to applying to the VDP because one of the criteria is that the disclosure is “Voluntary”. This means that you cannot have been approached by the CRA about the return or part of the return you need correct.  There are other criteria that are more technical and complex, making a tax expert an invaluable resource.

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Not only can you save significant amounts of money and avoid criminal prosecution by using the VDP, but becoming current or staying current with your tax filings is an important part of avoiding a tax audit by the CRA.  Whether you are under audit, or you are trying to become current to avoid or prevent an audit, you should get the help of a Chartered Professional Accountant (CPA) who is a tax expert.  The risks and cost of not getting your filings right or not making sure you meet the VDP requirements can be large and are often far outweighed by the cost of having an expert navigate the tax rules for you.

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FAQS

How long can you go without filing taxes in Canada?

You are not supposed to go any amount of time past the tax filing deadline without submitting your taxes. However, the CRA can view your unfiled returns as one way to start charging penalties and interest or even audit you.

Can you file your tax return without your T4 slip?

Some of the information you need to file your tax returns can be found without a T4 if you look online. However, you should also contact the CRA if you need to file your taxes and don’t have your T4 slip so you can walk through your options.

Can I file 3 years of taxes at once?

If you have unfiled tax returns, it is recommended that you file all the overdue tax returns at once so that you can get on track with a payment plan and start making payments towards the overdue amounts. If this means that you need to file three years at once, then you want to get on top of these back tax returns immediately with the help of a professional.

How do I find out if I have unfiled tax returns?

Should you want to find out if you have unfiled tax returns, first check your own records. Often, you will be able to see which years you have missed. Once you have done that it is wise to seek the help of a fully trained tax professional. You will have to pay the taxes that you owe, which can be expensive. But with the help of an experienced tax specialist that bill can be reduced.

What happens if you have unfiled tax returns?

If you have unfiled tax returns, you will be asked to pay the tax you owe, interest and will usually have to pay a fine. Most tax authorities now have systems that automatically highlight those who have not filed a return. Some authorities run voluntary declaration schemes to encourage more people to pay their back taxes. Often, using them will save you a lot of money. But, you should seek advice from a tax professional before using them.

How do I fix unfiled taxes?

You can fix unfiled taxes, by contacting the authorities and paying what you owe. It is a complex process that needs to be approached carefully. You may be required to pay late payment fines and interest on the tax you did not pay. Plus, you will have to pay the tax you owe. It is wise to use a tax professional to help you to put things right. Their understanding of the system will usually help to minimize the bill.

pro-tip

Pro Tip

ACCESSING THE SMALL BUSINESS DEDUCTION IN YOUR BUSINESS

The Small Business Deduction gives businesses a tax deduction on the first $500,000 of income. This saves an eligible corporation around up to $50,000 in income taxes. There are a number of conditions that have to be met to be eligible for this deduction.

I was referred to Sam Faris by a tax lawyer to handle my a complicated tax audit by the CRA and to refile all my outstanding corporate and personal tax returns. He was highly recommended by the tax lawyer and by other professional. The minute I hired Sam to sort out the big mess that I had with the CRA, I felt I am safe and in a good hands. He and his team were responsive to my questions and my concerns. Once he completed his work, he insisted to meet in person with the auditor and the team leader. His work quality was second to none. He backed up all accounts prepared a perfect reconciliation. On that basis, he presented his work confidentially and was able to convince the CRA team with his position and his calculations. I must admit that Sam Faris is the best tax consultant and he is a life saver. As a side note, his fee is very reasonable considering to other professionals and more importantly the work quality and the results that he achieved are unbeatable.
Response from the owner:Many thanks Moss for the positive review.
I was referred to Mr. Faris by another professional who recommended him to deal with my multiple years of outstanding corporate and tax returns. I interviewed Sam and was impressed in his confidence and transparency. He did not promise the moon just to get my business. Sam was able to file all returns under the voluntary disclosure program. After completing filling all tax returns, I realized the amount of money he saved me. I enjoyed very much working with him. He ensured that the work progress flow smoothly without any complications. He took to consideration the emotional stress factor and he was available to speak with me even beyond business hours just to make me more calm and to make me feel that he is on top of the matter and it will be resolved to my satisfaction. Indeed, this is what happened. The matter was resolved to my satisfaction and CRA concluded that the returns which Sam filed are reasonable and there is no need to further audit me nor my company. In summary, Sam is a life saver. He saved me and saved my family and now I am in the right track where all my tax filing obligations are met and I don’t owe any taxes. So grateful to Sam and his dedication while working on my file.
Response from the owner:Raj Thank you for the positive Google review. We are happy that you are satisfied with our services. Voluntary disclosure program is one of our specialties and we have dealt with many complex cases too. We get referrals from other professionals as we have been in the business of fighting CRA many years and we have countless success stories that many professionals are aware of. Please do contact us if you require further help in the future.
Sam is an excellent CPA and the best tax consultant in the country. He helped me to deal with a very complicated tax audit with the CRA where the CRA sent me a proposal assessment of 1.5 million dollars based on their net worth audit calculation and analysis. Sam was able to provide a counter analysis which highlighted significant mistakes that the auditor made with his assumptions and calculations. It’s ridicules that CRA wanted to taxed me on a loan that I obtained from my bank. Sam dealt with this audit perfectly. He demonstrated a very high level of expertise and CRA had to accept his counter analysis with no question asked. Many thanks to Sam’s efforts and high business standards in dealing with this issue and resolve it to my favor. I will have Sam as my primary CPA going forward so I can focus on doing business and will have a peace of mind in terms of the high quality of work done by him. Well deserved this review with the 5 stars rating.
Response from the owner:Yash Thank you for the positive feedback and the 5 stars Google review. We are glad that you are happy with our service and you are satisfied with the outcome. Net worth audits are very complicated and disputing them might get very tricky. We have been dealing with the same types of audits for many years and we are confident in fighting CRA and to point out mistakes that the auditor have made while performing the audit. We will remain at your disposal anytime you contact us in the future.
Sam Faris helped me with a complex cross border tax matter. This issue involved 12 years of tax returns and it was as a result from mistakes that my previous accountant did. He was able to perfectly address the issue with the CRA and to fix the returns under the voluntary disclosure program. End results; CRA accepted Sam’s work with not a single question and the returns were reassessed to my satisfaction without penalties and interest. Many thanks to Sam brilliant work.
Response from the owner:Dear Sir It was a pleasure working on your file and get you the results that you aimed to have and to your satisfaction. We have been dealing with similar cases for many years and we were confident that the results are favorable. Please feel free to contact us in the future if you do require further help.
I found Sam’s firm online and I read the excellent Google reviews about him and his team. I decided to hire him to help me navigate an issue with the CRA. Sam delivered as expected and as promised. Results were to my satisfaction and I am very happy with how the process was handled. Highly professional and extremely knowledgeable.
Response from the owner:Dear Tanya Thank you for the 5 stars Google review and your kind words. We strive to provide the best customer service and make our clients relax and calm during the process. The cases we are taking are very sensitive so providing quality work to the CRA is extremely important so just to avoid any escalation and to make sure that our package is accepted from the first round. We will remain at your disposal anytime you require our services. Sam Faris
after the initial assessment I had with Sam, he proposed a strategy to dispute CRA decision. He knew up front how to approach my case as he seemed that he dealt with similar cases many times. I hired him the end results were as promised and no surprises. Sam is very trust worthy and has a high business standards. May thanks Sam.
Response from the owner:Many thanks for the positive review.
I recently turned to Faris CPA for help with my tax filing, and I must say, I'm over the moon with the results! The whole process was a breeze, saving me time and stress. What really stood out was the friendly professionalism, impressive expertise, and crystal-clear communication from Sam and his team. They made what could've been a daunting task feel like a walk in the park! If you're looking for a warm, approachable tax expert who genuinely cares about his clients, I wholeheartedly recommend Sam and the folks at Faris CPA - they're great tax consultants!
Response from the owner:Many thanks.
Working with Sam and his team was an extremely valuable experience. One of the best Tax consultants in Toronto I've ever come across.

He has a ton of experience resolving problems with the CRA and was truly a big asset to me when I had issues I needed help with.

Would highly recommend Sam and Faris CPA, thanks again for all the great work!
Response from the owner:Thank you Paul for your positive feedback and we are glad we met your expectations.
I had an amazing experience working with Faris CPA for my CRA needs. They really know the CRA processes and made everything so easy. They were super professional, always ready to answer my questions, and made sure everything was done right. I couldn't have asked for better help. Highly recommend their services for anyone dealing with the CRA! -Sara
Response from the owner:Thank you Sara for the 5 stars review.