Many of us do it; make charitable donations throughout the year in order to receive deductions on our income taxes. This has long been a viable way to help reduce the amount of tax you pay – and it usually helps out those on the receiving end of the donation. However, if those donations have led to unanticipated tax shelter problems, you might be wondering what your next steps should be.
If you’ve made, in the last few years, a donation which has since been reassessed, you could be looking at a significant tax debt as well as months or even years worth of interest and penalties, applied retroactively. Don’t stress, there are options.
Our first piece of advice – don’t try to do anything on your own. The entire CRA system for dealing with issues such as these is complex and incredibly formal – one wrong answer and your entire case may be lost. Instead, get in touch with a tax professional, one with the knowledge required to help you ensure the greatest success possible. This person will be able to help you navigate the myriad forms required.
What forms/applications are we talking about? First and foremost, file an objection. When the CRA sends you a reassessment, you have the ability to object when you feel that the reassessment is unwarranted. An objection needs to be filed within 90 days of the date of the reassessment, although there are ways to increase that period if you’ve missed the deadline. The CRA will review your case (this could take some time), and accept or reject the application.
You will also want to apply for Taxpayer Relief at the same time. The Taxpayer Relief Program is offered by the CRA for relief from penalty and interest charges. In order to qualify, you need to be able to show how one of the following situations prevented you from meeting your tax obligations:
- extraordinary circumstances;
- actions of the CRA;
- inability to pay or financial hardship;
- other circumstances.
There are no guarantees when it comes to either one of these applications, so working with a tax professional is a great way to better increase your chances of success.
At Tax Solutions Canada, we can help you deal with tax shelter problems when they arise. Don’t ignore those assessments – deal with them head on. Get in touch today by calling 1-888-868-1400.