Understanding the Dangers of Outstanding Tax Returns

As a taxpayer in Canada, it can be tempting to postpone the inevitable. The thought of sifting through receipts, calculating income and expenses, and ensuring all the numbers add up can be daunting. However, having outstanding tax returns or unfiled tax returns can lead to a host of problems.

While this post will explain the most common risks associated with not filing tax returns on time, if you do have an outstanding tax return(s), always speak to an expert at the best CPA firm in Toronto as the best approach for dealing with any unfiled tax returns depends on the specific circumstances unique to your situation.

Know When to File to Avoid Having an Outstanding Tax Return

The deadlines for filing tax returns in Canada are as follows:

March 1: Deadline to contribute to an RRSP, a PRPP, or an SPP.
April 30: This is the deadline to file your taxes. However, if April 30 falls on a weekend or holiday, the deadline is extended to the next business day.
June 15, 2023: This is the deadline to file your taxes if you or your spouse or common-law partner are self-employed.

If you have a balance owing, you must pay it on or before April 30. Please note that these dates are current at the time of this writing. Always refer to the CRA website for the most recent tax filing deadlines. For Canadian businesses, these tax filing deadlines are crucial:

Corporation Income Tax Return: You should file your return within six months of the end of each tax year. The tax year of a corporation is its fiscal period. When the corporation’s tax year ends on the last day of a month, file the return by the last day of the sixth month after the end of the tax year. When the last day of the tax year is not the last day of a month, file the return by the same day of the sixth month after the end of the tax year.

Of course, as a business, having unfiled tax returns includes reporting, filing, and remitting GST/HST on time; not doing so can result in similar penalties as an outstanding tax return.

Filing and Payment Deadlines for GST/HST

For self-employed individuals and businesses required to charge and remit GST or HST, the GST/HST filing and payment deadlines in Canada are as follows:

Monthly Reporting Period. The filing and payment deadline is one month after the end of the reporting period. For example, if the reporting period ends on July 31, the filing and payment deadline would be August 31.
Quarterly Reporting Period. The filing and payment deadline is also one month after the end of the reporting period. For example, if the reporting period ends on March 31, the filing and payment deadline would be April 30.
Annual Reporting Period (except for individuals with a December 31 fiscal year-end and business income for income tax purposes). The filing and payment deadline is three months after the fiscal year-end. For example, if the reporting period ends on August 31, the filing and payment deadline would be November 30.
Annual Reporting Period (individuals with a December 31 fiscal year-end and business income for income tax purposes) The filing deadline is June 15, but the payment deadline is April 3012.

It’s always a good idea to file your return early or before the due date to avoid being charged interest and penalties.

The Financial Cost of Outstanding Tax Returns

Penalties and Interest. The Canada Revenue Agency (CRA) doesn’t take kindly to unfiled tax returns. If you owe money and don’t file your return by the deadline, the CRA will charge a late-filing penalty. This penalty is 5% of your balance owing, plus 1% of the balance owing for each full month your return is late, up to 12 months. And that’s just the beginning. Interest is also charged on the outstanding amount, including the late filing penalty.
Loss of Benefits. If you have an unfiled tax return, you might lose out on government benefits. The CRA determines your eligibility for benefits such as the Canada Child Benefit or the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit based on your filed tax information. By not submitting your return, you could be leaving money on the table.
Loss of Refunds. If the CRA owes you money, they won’t send you a refund until your outstanding tax returns are filed. It means that by delaying or not submitting, you’re essentially giving the government an interest-free loan.

Risks Associated with Unfiled Tax Returns

Other consequences of unfiled tax returns can include:

CRA Assessment. If the CRA notices that you have unfiled tax returns, they might decide to file a return on your behalf. This is known as a “notional assessment.” The problem? They will estimate your income without considering all your available credits or deductions. As a result, you might end up owing more than if you had filed yourself.
Legal Repercussions. Believe it or not, consistently not filing or having outstanding tax returns can be considered tax evasion. The penalties for tax evasion can be severe, including hefty fines and, in some cases, imprisonment.
Loss of Financial Flexibility. Unfiled tax returns can impact your credit score. If the CRA decides to take collection action against you for unpaid taxes, it will appear on your credit report. This can hinder your ability to secure loans, mortgages, or even rent properties.

Navigating the Consequences of Outstanding Tax Returns

Getting Back on Track. If you have outstanding tax returns, it’s essential to address the issue promptly. Start by gathering all relevant financial information and paperwork. If you’re missing information, the CRA can provide copies of slips and other details. Consider seeking help from a tax professional if you’re unsure about the process.
Payment Plans. If you’re concerned about a significant bill from the CRA due to outstanding tax returns, remember that the CRA often allows taxpayers to set up payment plans. By making consistent monthly payments, you can slowly reduce your debt without incurring additional penalties.
Voluntary Disclosure Program. If you’ve made an error on a previously filed return or have unfiled tax returns, the CRA’s Voluntary Disclosure Program (VDP) might be an option. It allows taxpayers to come forward to correct inaccurate or incomplete information or to disclose information they haven’t reported. In return, they may receive relief from penalties or prosecution.

Tackling the Fear of Unfiled Tax Returns

The idea of dealing with unfiled tax returns can be intimidating, but the risks of letting them remain outstanding are even more daunting. Taking proactive steps is crucial. Whether you choose to tackle the task yourself or hire a professional, addressing the issue head-on will give you peace of mind and keep you in good standing with the CRA.

About the Author

Sam Faris

CPA, CGA, LPA, CPA (C.O.) (Expired), FACCA (U.K.)

Sam Faris, President of Faris CPA, is a Licensed Public Accountant in Ontario, with affiliations to CPA Ontario, CPA USA, and FACCA U.K. Since 2003, he's excelled in resolving CRA disputes and tax audits. His firm offers diverse services, from bookkeeping to corporate tax planning, serving a wide client base. Renowned for his formidable track record against the CRA, Sam is a committed advocate and expert in tax resolution.

Learn more about Sam Faris

Testimonials

Faris CPA | Toronto Tax Accountant

4.9

Based on325reviews

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Fadwa Layous

1745074093

I found Sam online and I decided to have a consultation with him to discuss my CRA audit. I got a very good feeling about him, his integrity and his tax knowledge and skills and I had no doubts that he would be the best fit to provide audit help and support. I decided to hire him to handle my case. His approach to my case was consistent to the advice that he gave me at the conclusion. Sam was able to prepare working papers and supporting documents to show the auditor why his numbers are overstated. Sam had to involve the team leader and insisted to meet with him as the auditor refused to adjust his numbers. Sam confidently presented his work to the team leader and the team leader accepted his numbers without any adjustments. Sam deserves 10 stars for all what he has done in my CRA audit case and all his support and help.

Louis Makhoul

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Thank you Sam for your guidance and walking me through the implication of being taxed in Canada as a US resident. You help is very helpful and informative.

Filippo Alviani

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It was a pleasure working with Mr. Faris. He is highly respectful, meets his promises and has a very high business standards. We approached Mr. Faris as we needed help in a tax audit. We have hired a tax lawyer to help us before but he did not deliver. We were referred to Mr. Faris by one of his clients who highly recommended him to us. Mr. Faris met our expectations and was able to deliver a package to the CRA to resolve the situation to our satisfaction. We are glad that we met him and used his services.

michael Gebregziabiher Tekie

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I am very grateful to Mr. Faris and his team. I appreciate their expertise, support and professionalism in my most difficult time in life fighting the CRA. They were always made me feel that I am in a good hands and the results that they got very impressive. If you have any problem with the CRA, hire Faris CPA as they are top notch tax firm.

Kamalpreet Singh

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I recently had a consultation with Mr. Faris regarding a CRA audit. He was very knowledgeable. He helped me to get a fair understanding of my situation and reduced my stress level by suggesting a very good approach to address the audit and how to eliminate unfavorable audit results.

Husna A

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I had the pleasure of working with Sam during a CRA audit, and I can confidently say he is an expert in his field. His deep understanding of tax laws and CRA procedures was immediately clear. Sam is incredibly thorough—he reviewed all my documents with precision, identified areas that needed attention, and ensured everything was in perfect order before submission.

What really stood out was his strategic thinking. Sam didn’t just react to CRA inquiries—he anticipated them, prepared strong responses, and communicated with the CRA on my behalf in a professional and effective manner. His ability to break down complex tax language into something I could actually understand was a huge relief.

Beyond his technical skills, Sam is patient, calm under pressure, and genuinely dedicated to helping his clients. I never felt rushed or overwhelmed—he made a stressful experience feel completely manageable. If you need help with a CRA audit or any tax-related issue, Sam is the person you want in your corner. Highly recommended!

A McLean

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I was referred to Sam Faris by a family member as I needed tax help from a professional and tax expert. I met in person with Sam and explained the tax audit that I am having. Sam reviewed all the documents that I have and reviewed my tax history and figured what triggered the red flag by the CRA. It was the wrong filling by my previous accountant. Based on Sam’s experience with similar cases, he determined the best approach to fight the CRA audit. I trusted his advice and I decided to hire his services. As expected, Sam kept his promises and worked aggressively on my file based on the approach that he determined when I first met him. Long story short, the results that he achieved for me were very sufficient. I had to pay a very minimal tax bill compared to what the CRA proposed at the beginning. My life is back to normal now and CRA is not part of it anymore. I can’t thank Sam enough for the great work that he has done for me.

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Working with CPA Faris and the team on an issue I had with CRA was stress free and such a breeze they are attentive to customers needs and the seamless service is second to none they resolved my issue swiftly and I’ll definitely be recommending there services

Deniese Scott

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I had an excellent experience working with Sam Faris. Their team is knowledgeable, professional, and incredibly efficient. They took the time to understand my situation, provided clear explanations, and ensured I received the best possible outcome. The process was smooth, and they handled everything with great attention to detail.
If you’re looking for a trustworthy and reliable tax firm, I highly recommend Sam Faris. Their expertise and customer service are truly outstanding!

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Benjamin Daniel Vrdoljak

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I had the pleasure of working with Sam Faris to deal with a complex matter with the CRA, and I am very satisfied with his services. He provided exceptional support and guidance. He demonstrated commitment to my case and was on top of every task I hired him for. I felt I am in a very good hands and was confident with his capabilities.

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Sam is a professional who cares about his clients and provides a high level of service. His professionalism and work ethic makes him a respected CPA and his high level of customer service makes him a good businessman. It is a true pleasure to work with him and I highly recommend him as a CPA.

DISTINCTIVE HARDWOOD & RENOS

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Sam and his team were both wonderful to deal with. They are professional, knowledgeable, and always quick to respond to any questions. They helped me through a difficult time with the CRA audit. Their attention to details and dedication very much appreciated.

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Tara B.

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I found Sam Faris to be very professional and helpful. He took the time to answer my questions and concerns. I’d made a mistake reporting income from the United States, so I had to file amendments for several years of taxes, submit an application to the VDP, and file a few years that I was behind on. After I struggled for months just trying to figure out where to start, Sam got it all done in just three days. I appreciated his step-by-step method of collecting information that was never too overwhelming.

Alla G

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Very Pleasant to deal with and extremely knowledgeable with tax issues
Thank you Sam with all your help and support.

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i scheduled a consultation with Sam regarding some tax questions. Sam has answered all my questions to my satisfaction. he was friendly, patient and very polite. he also waived the charge for me. many thanks to Sam.

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IKRAM HUSSAIN

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Supper knowledgeable with tax matters with the cra.
I was referred to Sam by a family friend who has dealt with him during a tax audit. Sam help me out to resolve my audit with the CRA. He was prompt in replying and have high business standards. Sam responded to the unfair proposal letter by the CRA and was able to convince CRA that their tax numbers are incorrect. He submitted to the CRA a very sophisticated package which was perfectly backed up and reconciled. As a result of Sam submission, CRA accepted his package with no question asked. Many thanks to Sam and his team. Muhammad ikram Convenience store

M “Moss” T

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Sam and his team helped me to correct my corporate books as a result of the previous accountant sloppy and carless accounting and bookkeeping. He was able to file amended corporate tax returns plus amended personal tax returns under the voluntary disclosure program in a very short of time. He saved me lots of money with his brilliant tax planning and all around creative tax and accounting strategies. I am grateful to his help. His fee is reasonable considering the quality of work that he provided. Don't waste your time by hiring another firm or a tax lawyer. Sam can do it all to your satisfaction.

Asmeret

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Excellent work with respect to a very complicated tax matter with the CRA. Very happy with the outcome. Thank you FARIS CPA with all your help.

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Asqeri Kasmi

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I had a meeting with Sam. He is an expert of the field and very professional. He provides the right solution and the respective plan and works diligently to complete his work on time. He and his staff of CA are experts of the field. Strongly recommended.

Ideal Air Inc Office

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While I can’t provide details on my case and I usually don’t like to post Google reviews but I made an exception for Sam Faris. I absolutely recommend Sam to deal with any tax dispute with the CRA. He is efficient, creative and highly knowledgeable and experienced in successfully fighting the CRA. Many thanks Sam.

J Ballan

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Nadeen Awad

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Sam Faris and his team helped me with a very complicated CRA audit. He was very aggressive with his approach and was able to reduce the tax bill big time. My life is back to normal now as CRA case is closed to my satisfaction. Many thanks to Sam and his team.

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Excellent, well knowlegable team and efficient service. Thanks for all your help.

Rula Haddad

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Excellent service..

Atifa Lattif

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Sam Faris and his team helped me with a very complicated audit by the CRA.their approach and the way my case was handled was beyond my expectations.he saved me from getting a significant tax bill and more importantly CRA was convinced with Sam argument and accepted his submission and my case is closed now. I did not have to go through objection and pay more fee and live restlessly anymore.I highly recommend Sam and his team.

Abe Matar

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Thanks you Sam for all your help. You made the work process very easy to us.

Melika Ardestani

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He’s very professional and gave me a lot of advice about taxes and my tuition at university. I highly recommend him!

Hudaynazar PETIYEV

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Sam helped me to file my 10 years personal tax returns. He made the process super easy and stress free. CRA accepted the package with no single question asked. He is highly knowledgeable, down to earth and easy to deal with.

M G

1726589253

I interviewed 5 CPA firms before hiring Mr. Faris. During the initial assessment he was able to identify a huge mistake that CRA has done. He was able to perfectly communicate this mistake with me and explained how this mistake should be corrected. Mr. Faris assured me that the CRA will have to correct this mistake which will result in saving huge amount of taxes and penalties and interest. Mr. Faris worked around the clock including weekends to meet the pressing deadline. In summary, he met all his promises and of course did not disappoint me. All these sleepless nights worrying about the CRA are gone now and of course thanks to Mr. Faris who has changed my mind about the accounting and the tax profession forever.

Ana Miletic

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The best CPA and tax firm in the country. Worked with so many CPA firms but Faris CPA is the best by far. Highly professional, knowledgeable, pays attention to details. His fee is very reasonable comparing to other CPAs. I highly recommend the firm.

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Sam was able to sort out my US and Canadian tax returns as a result of errors made by my previous CPA. He was able to identify every little mistake on the returns and saved me taxes and penalties. I highly recommend Sam and his firm for all tax and accounting needs.

T D

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We approached Sam 10 years ago when CRA was auditing us and our business. Sam was able to handle the audit properly and resolved it to our satisfaction. Since then, Sam has been our family and business accountant. His service is reliable, professional and efficient. Also his fee is reasonable. I already referred to Sam family members and friends who are super happy with his services.

Gerda Saryte

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MR. Faris has given me a great advice and helped me through complicated tax issues with the CRA.

Petar Przuljevic

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Sam Faris challenged CRA proposal regarding selling two of my properties. Sam was able to convince CRA that the sale of those properties was not business in nature and not subject to HST. His response was based on detailed analysis and supported with court cases. Many thanks to Sam for saving me money and the hassle with the CRA.

Sterling B

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Sam is honest and highly responsive. He's a very hard worker and gets things done quickly. I can't recommend him enough.

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I recently hired Faris CPA for a tax dispute with the CRA. Sam and his team were very professional and knowledgable in dealing with my concerns and tackled my issue head on. Their communication was particularly noteworthy as they answered all of my questions throughout the process in short time. Definitely recommended.

Brkovic Zorka

1725358810

Sam Faris is a reliable and highly knowledgeable with what he does. Sam delivered a strong and convincing package to the CRA regarding my case. He worked tirelessly to meet a very tight deadline. He was able to object the CRA decision and knocked down the taxes significantly. I highly respect him on both personal and business levels. He is a man of his word. I will definitely recommend him to family and friends. Many thanks Sam.

Sotiris Yannopoulos

1725226185

Sam deserves all the 5 stars reviews that he already received. He has done an amazing job with regards to my case with the CRA.

Marko Krawcow

1725062049

By far one of the most enjoyable experiences I’ve had with a tax specialist. I can truly say this is the most professional and hardworking person I have ever met. He spared no time getting to work, not only was he extremely efficient but a great communicator. If you’re looking for someone to help you figure out your finances, message Sam. I have no regrets, only wish I had done this sooner.

helene ghaleb

1725053083

Working with Sam and his team for the last 7 years has been a pleasure. Their attention to details has been essential in assisting me to navigate complex tax and accounting matters. Sam and his team are always prompt in reply to my questions and fully dedicated to my file. I highly recommend their services to anyone in need of top-notch accounting and tax support.

stjoseph cafe

1724640445

Lucky that I retained Faris CPA to deal with the CRA. I have no complaints whatsoever. My file was dealt with on a timely and efficiently basis. With the least cost.

CIFS Ottawa

1724638931

The firm performed tax planning to my organization. I am very happy with the results and the performance.

Will Noja

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I had a consultation with Mr. Fares last week and explained my issue with the CRA. Sam provided a great advice. Further he recommended not to hire a professional and pay money while he thought that I can handle the issues on my own. Obviously he looked at my best interest rather than to pay him more unnecessary fee. He is reliable and trustworthy and I would recommend him to anyone in need for this kind of services.

Sahar Ghantous

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Sam helped me to resolve a serious audit with the CRA. Throughout the process, Sam demonstrated skills, knowledge and expertise in accounting and the tax rules. He was able to challenge the auditor and prove why her assumptions were inaccurate.
I feel safe and confident to have Sam and his team as my representative in any future tax and accounting related matters.

Jack

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Thanks for your help, amazing service 👍

Danijela Sljukic

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Working with Sam at Faris CPA was an excellent experience. His deep knowledge and professionalism made navigating a challenging audit with the CRA much easier. Sam was highly responsive, addressing all my concerns and guiding me through every step of the process. I'm very pleased with the service provided and would highly recommend Sam and the Faris CPA team to anyone in need of dependable accounting and tax support.

D C

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I recently worked with Faris CPA regarding my many years of outstanding personal and corporate tax returns. Sam has submitted all returns under the voluntary disclosure program, he was incredibly helpful throughout the entire process. He was knowledgeable, responsive, and took the time to explain everything in detail. Thanks to his expertise, I felt confident in my decisions. I highly recommend Faris CPA, especially if you have the chance to work with Sam!

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