Tax Alerts

Although they aren’t usually thought of in those terms Canadian charities, as measured by the amount of money they receive and administer, can be big businesses. However, because they collect and dispense that money in order to support and advance causes which create a public benefit, charities are accorded special status under our tax laws. Our tax system effectively subsidizes the activities of charitable organizations by providing a tax deduction or tax credit to companies and individuals that contribute to those organizations. To ensure that their activities are in furtherance of their charitable purposes, charities are required to file an annual information return outlining those activities. Recent changes made to that information return focus on situations in which political activities are undertaken by registered charities.

Tax-free savings accounts (TFSAs) were first made available by the federal government in 2009. While there were some early difficulties which led to many taxpayers inadvertently breaching TFSA rules, Canadian taxpayers and their financial advisers have now become accustomed to using TFSAs as a standard part of financial, tax, and retirement planning.

It goes without saying that developments in technology have made their mark in just about all areas of personal and business life. One of those changes has been the use of computer systems to record and document business transactions, including point-of-sale (POS) transactions in retail businesses. And, inevitably, the use of such systems has given rise to the development of software intended to defeat them. The possession and use of such software—known as electronic suppression of sales (ESS) software or, more familiarly, “zapper software”, is now an offence under Canada’s income tax and excise tax legislation.

It’s not unusual for a taxpayer to disagree with the Canada Revenue Agency’s (CRA) assessment of his or her tax return. When that happens, the first step is to get in touch with the CRA, by phone or letter, to determine just where the disagreement lies and whether it can be resolved. Where the CRA and the taxpayer can’t come to an agreement or compromise on what the taxpayer’s tax liability for the year should be, it’s time to move to the next level.

Two quarterly newsletters have been added—one about personal issues, and one about corporate issues.

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