Run a business? Better keep all those receipts handy for a long time to avoid tax trouble

  • 📰 TheStarPhoenix
  • ⏱ Reading Time:
  • 59 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 27%
  • Publisher: 63%

United States News News

United States United States Latest News,United States United States Headlines

Run a business? Better keep all those receipts handy for a long time to avoid tax trouble — via financialpost businessowner taxes

Failure to file a return on time, or to provide appropriate backup for expenses claimed, can lead the CRA to issue an “arbitrary assessment” for tax owing, along with costly penalties. That’s exactly what happened in a recent tax case decided last month.

It turns out the taxpayer never filed tax returns for his trucking company for the 2012, 2013 or 2017 tax years. Or, if he did file returns, as he claimed, the CRA never received them. In May 2018, the CRA wrote to the taxpayer asking him to file corporate returns for those three taxation years. The agency wrote to him again in June 2018 asking him to file, but no returns were received.

The CRA estimated the corporation’s gross income in each of those years by referring to its GST return for the calendar year closest to the particular taxation year. The CRA then deducted 30 per cent as an estimate of reasonable expenses, and deducted the salary expense as reported on the corporation’s payroll records. The CRA assessed federal back taxes owing of about $20,000 total for the three reassessed years, plus nearly $12,000 in failure-to-file penalties for those years.

In July 2018, the taxpayer was involved in a serious crash while driving his truck in the U.S. He spent one day in hospital followed by months of recuperation. He testified he was unable to retrieve anything from the truck following the crash, including his laptop.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 253. in US

United States United States Latest News, United States United States Headlines