Case Background:
The Taxpayers were a married couple that had not filed their personal tax returns for some time, and were owing a significant debt to the Canada Revenue Agency (CRA).
They initially engaged Farber Tax Solutions for an investigation to determine the nature and source of their tax debt.
The Farber Tax Solutions Approach:
Upon investigation, we found that both Taxpayers owed significant amounts in personal income tax debt.
After examining their online CRA accounts and through separate calls to the CRA General Inquiries line, Farber Tax Solutions was able to determine that the Taxpayers had not filed tax returns since 2007. As a result, they had been arbitrarily assessed for all years since 2008, which included substantial penalties and interest.
Our recommendation to the Taxpayers was:
- To file income tax returns to allow the CRA to reassess them based on their reported amounts of income and expenses; and
- for the most recent arbitrary assessments which were within the 90-day objection period, to file protective Notices of Objection to prevent the CRA from taking any collections action while they filed their income tax returns.
The Result:
The Taxpayers re-engaged the services of Farber Tax Solutions to file the Notices of Objection as recommended. Since the Taxpayers were arranging to prepare and file their tax returns, Farber Tax Solutions was able to promptly file the Notices on their behalf to prevent the CRA from taking collections action against them.