Canada Revenue Agency (or CRA ) ; earlier Canadian Income and Canadian Customs & Excise (French: Agence du revenu du Canada , or ARC ), is a Canadian federal agency that regulates tax laws for the Government of Canada and for most provinces and territories, international trade laws, and various social and economic benefits and incentive programs delivered through the tax system. It also oversees the registration of charities in Canada, and tax credit programs such as the Scientific Research and Experimental Development Tax Credit Program.
Video Canada Revenue Agency
Histori
The Canadian Revenue Board was known as the Customs and Excise Agency of Canada (CCRA) until the federal government reorganization in December 2003, when customs enforcement was transferred to the Canadian Border Service Agency, part of Canada's Public Safety portfolio.
The short-lived CCRA was created in a federal government reorganization in November 1999, where it has been known for many years under its legal name, National Income Department. Prior to 1927, it was known as the Department of Inland Revenue. This is also referred to as Canadian Income under the Federal Identity Program of the Canadian Financial Council. Maps Canada Revenue Agency
Structure
Commissioner
The Commissioner and Chief Executive Officer are heads of bodies and Management Boards, consisting of 15 members, 11 of which are nominated by the province and region. CRA's current Commissioner and Chief Executive Officer is Bob Hamilton, who was appointed on 1 August 2016.
List of CRA Commissioners and Appointment Date
Head Office
The head office is in Ottawa and is responsible for budgeting, planning, manager training, decisions, reporting to ministers, and other high-level functions. CRA is divided into 5 areas for administrative purposes, including Atlantic, Quebec, Ontario, Prairie, and Pacific. Each region has several tax service offices, which carry out field work, such as audits and collections.
Tax service office (TSO)
TSO is a CRA field office. Their functions mainly include audit and collection.
Taxation center (TC)
TC is responsible for processing tax returns and conducting a limited review of the proposed return. Canada has 7 TCs, including the JonquiÃÆ'¨re Tax Center, Shawinigan-Sud Tax Center, St. Tax Center. John, Sudbury Tax Center, Summerside Tax Center, Surrey Tax Center, and Winnipeg Tax Center.
States
Most executives and managers are not represented by unions. Many CRA employees are represented by the Union of Taxation Employees, which is a component of the Canadian Public Service Alliance. Auditors, researchers and employees of computer systems are represented by the Canadian Public Service Professional Institute.
Processing tax returns
The Canadian tax system is based on mandatory compliance or a self-assessment system. Every taxpayer is obliged to file a tax return on time. A fine is imposed if the return is submitted late; the outstanding amount owed is also subject to daily compound penalties and compound interest, without reprieve. CRA processes most of the tax returns with very limited reviews and immediately publishes the Rating Notice. The Valuation Notice is a legal document and provides a summary of the income, credit and deductions of each entity. If the taxpayer does not agree with the judgment, they may file an appeal that may lead to challenging judgment in the tax court. After the tax refund is assessed, it may be reviewed. In some cases, tax returns may be reviewed before they are assessed.
Income tax refund
A resident of Canada is required to file an income tax refund each year. Non-residents may have to apply for a tax refund under certain circumstances. Someone filed a T1 refund; a company filed a T2 refund; a trust file returns T3. Guardianship is not an entity under general law but is treated as a taxable entity by the Income Tax Act. Legal representation of the property of the deceased person may have to file a T3 refund for property if it has property that has not been distributed. Unlike the US, families can not file a joint refund under Canadian tax laws. A partnership is not a taxable entity for the purpose of income tax and its income is taxed at the hands of its partners.
An individual taxpayer can file a T1 return on paper, or use netfile. The software program, provided by the commercial vendor and not CRA, is required for netfile. Accountants and composers usually use the efile method, which requires registration with CRA and is not available to individuals who submit their own tax returns.
Many benefits, such as Canada Child Benefit (CCB), are determined by the reported income on return of T1. If a refund is not submitted, benefits will not be available. The Registered Retirement contribution space (RRSP) also depends on the income reported by the taxpayer.
The T1 refund is due April 30 for most taxpayers. If someone has self-employed income, they can file a refund on June 15, but interest on their taxes begins to increase after April 30.
A taxpayer can apply for his own return or ask an accountant/payer to file it to them. Each taxpayer is responsible for their tax liability, not the compiler. If the tax return is audited and a larger tax bill is the result, the taxpayer is responsible, not the maker.
Employees typically have withholding taxes on each payment check by their employer, who sends withholding tax along with payroll tax to CRA. Contractors (and most retirees) are usually required to pay income tax installments to CRA throughout the year. After the tax refund is filed, a tax refund will be available if tax is deducted or the overpayment of the indebted tax is calculated on the tax return. If the result of the tax return in the balance is due, it must be paid in full by the due date or interest will increase every day.
GST/HST returns
GST/HST is governed by the Excise Tax Law, which requires many entities to register for GST/HST accounts and send GST/HST collected. These entities include sole proprietorships, partnerships, corporations, etc. Nonprofit organizations are usually excluded for income tax purposes but not for GST/HST purposes. Even universities and hospitals must register for GST/HST.
Returns GST/HST matures every month, quarterly, or annually depending on sales volume. If sales are less than $ 30k per year, the business may qualify as a smaller supplier, which is not required to register for GST/HST.
Payroll tax refund
An employer is required to withhold income tax and payroll taxes, such as CPP & amp; EI, and to deliver the amount deducted to CRA every month, quarterly, or annually, depending on the number of deductions. At the end of each February, the employer is required to file a T4 refund, which is a T4 summary for the total wage paid by the business, and the T4 slip for the wages paid to each employee, to CRA.
Tax collection
CRA collects income tax, excise tax, payroll tax, etc. GST/HST is governed by the Excise Tax Law. CRA does not collect provincial taxes, such as sales taxes and gas taxes, or municipal taxes, such as property taxes. CRA has agreements with several provinces to collect extraordinary debts for provincial programs. For example, CRA may use personal income tax returns to offset the outstanding debt to the BC medical program if requested by the BC Province.
Income tax
The Canadian Revenue Board collects most of the individual income taxes in Canada, except for residents of Quebec. Tax collection from provincial companies in Canada is managed by CRA except for the provinces of Alberta and Quebec. Ontario grants corporate taxes for the fiscal year to 2008. On January 1, 2009, CRA collects Ontario corporate taxes.
Goods and Services Tax (GST)
The Canadian Revenue Agency collects 5% Federal Territory Goods and Services (GST) taxes in all provinces except Quebec. Revenu QuÃÆ' Â © bec manages its own Quebec Sales Tax (QST) and GST on behalf of CRA. The Goods and Services Tax introduced in 1991 of 7% was added to the value of most sales of goods and services. GST was reduced to 6% in 2006 and 5% in 2008, the current rate.
Harmonized Sales Tax (HST)
In Prince Edward Island, New Brunswick, Newfoundland and Labrador, Nova Scotia and Ontario, the Goods and Services Tax (GST) has been replaced by Harmonized Sales Tax (HST). The Harmonized Sales Tax combines national GST and provincial sales taxes into a single tax. HST is managed by CRA. Every province that has Harmonized Sales Tax receives its share of the HST of CRA.
CRA manages many useful programs. Most of the important benefits to Canadian families are Canadian child support (CCB). CRA also manages many programs on behalf of the province. Personal income tax returns generally must be filed before any benefits can be paid.
CCB
Canada child benefit (CCB) is non taxable income for taxpayers. It is related to the income of taxpayer families, which may include income for taxpayer pairs. This requires all tax returns filed for taxpayer families before the allowance amount can be determined. The reason is to pay more to low-income families so that their children can grow healthy. The specified form must be submitted for this benefit. The CCB was implemented in July 2016, and incorporates a pre-2016 (UCCB and CCTB) benefit plan as well as other child related credits.
Compliance program
CRA has many auditors working on audit files. Most of the time, the audit results result in a reassessment, ie a taxpayer undergoing an audit will get a tax bill. Tax bills include not only tax payable but can also include fines and interest. Auditing can lead to jail time.
Some audit files will be referred to Investigation. The results of the investigation will most likely lead to criminal prosecution and possible time of imprisonment. A taxpayer under investigation is protected by the Charter of Rights and may remain silent as it is up to the investigator to make the case and lay the charges.
Audit
The agency conducts audits to ensure compliance with tax laws. The auditor has the right to inspect the taxpayer's books and records, inspect the property in the inventory of the taxpayer, enter the place of the taxpayer or place of business, require the owner or manager of the property to provide all reasonable assistance and to answer questions, and ask taxpayers or others to provide information or documents. The taxpayer must cooperate with the auditor or encounter a blockage fee under S. 238 of the Income Tax Act .
Income tax audit can be done by the Tax Center (TC) and Tax Office (TSO). TC conducted several reviews of very limited tax returns, such as pre-assessment of donations and tuition fees, post-assessment review of medical expenses and moving costs. Most audits are conducted by auditors working on TSOs. Auditors working in audit program offices typically limit their audits to business cost reviews. They do an audit with correspondence and do not visit the business in the field. Auditors working in SMEs (SMEs), basic files, and large file programs perform their audits in the field, usually at the taxpayer's place of business. Audit of the field auditor is not limited and may include many and any issues in tax returns.
GST/HST Audit performed by TSO. Prepaid program only handles credit return, which is refund GST/HST requesting refund. Prepaid auditing is a limited audit of Input Tax (ITC). Post audit is a full audit of the return of GST/HST and which includes not only the ITC but also the GST/HST collected.
Investigation
CRA operates four investigative programs: the Voluntary Disclosure Program, the Informant Lead Program, the Special Enforcement Program and the Criminal Investigation Program.
- Voluntary Disclosure Programs (VDP): A program that allows taxpayers to avoid punishment or prosecution if they choose to correct inaccurate or incomplete information, or to disclose information previously held confidential to CRA. In order to be accepted into the program, the taxpayer's acts or omissions must involve the application, or the application of potential penalty by CRA and he is willing to make full disclosure.
- Leader Programs Informant (ILP): This program enables citizens to report individuals or businesses that may engage in tax evasion or other tax-related violations.
- Special Enforcement Program (SEP): Since the proceeds of the crime may be taxed, this program specifically conducts audits and performs other law enforcement actions for individuals who are known or suspected of obtaining income from illegal activities. The Collection Officer is responsible for collecting the tax payable and to confiscate assets under the Income Tax Act . The program is removed after the 2012 federal budget cuts.
- Criminal Investigation Program (CIP): The investigator of the program is responsible for alleged tax evasion, fraud and other serious violations of the tax laws. Investigators â € <â €
CPP/EI rules
CRA is responsible for making CPP/EI decisions, namely to determine whether any wage or payment can be insured under the Canadian Pension Program and/or the Employment Insurance program. The substance of a decision is to determine whether a person is an employee or contractor working alone. An employee can get benefits and EI contractors can not. Typically, CPP/EI decisions are required by Service Canada when they try to determine whether EI benefits should be paid.
An arbitrary rating
If a taxpayer does not file a tax return on time, CRA may first send a request, such as a reminder, to a taxpayer who asks them to propose an outstanding return. This first letter is called TX11. If the taxpayer still does not file a refund, CRA may send a second letter demanding that the refund be filed. This second letter is called TX14. Thereafter, the third letter, TX14D, may be issued, usually by registered mail, or may be sent personally by a non-filer.
If returns are not filed after computer-generated letters, such as TX11 and TX14, non-filer clerks may arbitrarily set up tax returns for taxpayers, typically generating more tax bills than taxpayers expect. Notice of appraisal under paragraph 152 (7) of the Income Tax Law shall be issued. Assessment 152 (7) is commonly known as random assessment. Action collection can follow. Taxpayers may file a modified tax refund to reduce their tax bill. After the revert has been changed, the audit is usually triggered.
If the non-filer officer determines that not enough info is available to issue an arbitrary assessment, they can refer the file to the Investigation, which will then bring the taxpayer to court. The taxpayer may be ordered by the court to file a remarkable return, usually subject to a court fine. If the taxpayer ignores a court order, they will be subject to contempt for court costs.
Dispute resolution
Appeals process
Taxpayers who believe that the Canadian Revenue Agency has not assessed the correct tax amount may dispute the appeal by filing an objection. There is a strict timeline to file an objection. Objection will be reviewed by CRA Appeals program. The appeals officer will make an independent decision of the audit. The appeals officer may confirm, alter, or dismiss the audit. The appeals officer has the discretion to negotiate a settlement, usually on condition that the taxpayer will not file a further appeal to the tax court.
If, after the objection has been assessed, the taxpayer is still dissatisfied, the appeal may be filed with the Canadian Tax Court within the time allowed. The Tax Court examines the taxpayer's claims and evidence, then looks at the evidence and arguments made by the government before issuing the verdict. CRA becomes a witness for the purpose of providing evidence in the tax court. Like other Canadian courts, the Tax Court operates by treating each party to disputes as equal when applying tax laws, administrative law, constitutional law and evidence law. If the taxpayer feels wrong in the assessment, he is encouraged to use the Canada Tax Court as an easy way to resolve the dispute. In addition, taxpayers are not responsible for costs in relation to their opponents, but only for their costs associated with their own defense. However, if the appeal is successful, payment of fees from CRA may be requested.
The tax court deals with income taxes, excise taxes, and CPP/EI issues. If the tax return has no tax due, the tax court can not resolve it. If this is about the provincial tax, the tax court can not handle it and it must be settled in the provincial court.
The tax court has two procedures, informal and general. Informal procedures are cheap and fast. A taxpayer can represent themselves or get a friend or accountant in an informal procedure. Informal procedures only handle assessments against certain thresholds and taxpayers must choose to take this route. The decision of informal procedures is not a precedent of arrangements and judges have more wisdom than general procedures. informal procedures allow limited appeal rights to a higher court. General procedures handle all assessments and require taxpayers to represent themselves or get a lawyer, friend or accountant to do so. The general procedure can be protracted for many years and the decision is a setting precedent.
If a taxpayer is still unhappy with a tax court decision, they can take him to a federal appeals court, or even further to the Supreme Court of Canada.
Service complaint process
The taxpayer harmed by the Canadian Revenue Agency's conduct may file a Service-related Complaint with CRA. This complaint should really deal with the services provided, not the legal aspects of the service. (For example, a service level complaint may be filed for an unprofessional language, but not for statutory payment requests.)
This complaint was first forwarded to the office which became the subject of the complaint. If the taxpayer is dissatisfied with how the first office handled it, they can escalate the complaint to the regional office, investigating the complaint and contacting the taxpayer. If the taxpayer remains unsatisfied, a complaint may be filed with the Taxpayer Ombudsman.
Bill Taxpayer Rights
In 2007, the Canadian Government announced in Parliament the Bill of Taxpayers and Commitment to Small Business. Today, the Bill of Taxpayer Rights contains sixteen rights, including the right to taxpayers to make a complaint about the services they receive from CRA.
Taxpayer Ombudsman
In fulfilling this mandate, the Ombudsman reviews complaints from taxpayers who report violations of rights related to their services by CRA. The Ombudsman upholds the eight taxpayer service rights in the Bill of Bill Taxpayer which is directly related to the services provided by CRA. To enforce these rights, the Office of the Taxpayer Ombudsman facilitates access to the compensation mechanism available to taxpayers and raises awareness of the role of the Taxpayer's Office and Ombudsman.
In addition to individual examinations, the Ombudsman may, at its own initiative, conduct examinations of systemic service-related matters. The National Revenue Minister may also ask the Ombudsman to conduct an examination.
The examination is reported to the Minister of National Income and published for public review. Each year, the Ombudsman releases an annual report presented to the Minister for National Income for presentation to Parliament.
Remission orders
Remission orders are not commonly known and rarely given. If taxpayers agree with tax assessments but can not pay, they can request a waiver order to CRA. CRA will make recommendations to the minister, who then recommends to the Governor on the Board. The Governor of the Council may grant an order of pardon in which the governor considers unfair tax collection.
2016 General Auditor Report
In 2016, the Financial Post reported that Michael Ferguson, the General of Canada Auditor, criticized the Canadian Revenue Agency for saying that it took too long to respond to tax complaints. The delay of the cost of Canadian taxpayers large sums of money in interest on the amount in dispute.
taxpayer exemption
Taxpayer reliefs are commonly called justice programs. This is governed by paragraph 220 (3.1) of the Income Tax Act and section 281.1 of the Excise Tax Act. It gives CRA a directive to cancel some penalties and interest, to pay personal income tax returns after 3 years of tax assessments being assessed, and to accept late elections submitted. CRAs will exercise their discretion when submissions are delayed due to exceptional circumstances, such as floods or earthquakes, by delays or errors of CRA, or by financial difficulties. CRA publishes Income Tax Information Circular, IC07-1, on this matter.
A taxpayer may ask for help on the specified form or may choose to use a letter, not as long as the points raised on the form, all covered by the letter. If the request is rejected, the taxpayer may request a second review, which will be performed by a higher level official. If the request is still rejected, a taxpayer may request a review of the decision in federal court, not the tax court. The federal court will determine whether the CRA is practicing its policies fairly. Otherwise, the court will send the file back to CRA for review. The court rarely will make a decision for CRA because its wisdom is with CRA and not court. If a taxpayer is not happy with the review decision, they can take him to a federal appeals court.
Call center operations
On February 8, 2015, the Canadian Broadcasting Corporation reported that an internal survey specifies that one out of every four calls requesting assistance from Canadian Income Office call centers gets bad information in terms of business.
See also
- Canadian Customs & Excise
- Canadian Efile
- Inter-American Tax Administration Center
- NETFILE
- Taxation in Canada
References
External links
- Official website
- The Taxpayer Ombudsman
Source of the article : Wikipedia
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