When Should a Tax Lawyer be Used?
For most, filing taxes and dealing with the Canada Revenue Agency (CRA) can be scary and confusing. Even for those who file their taxes on time and have nothing to hide, the CRA can often make mistakes that lead to unfair enforcement and tax litigation. As such, there may be various times when you may seek legal assistance to navigate your way through a variety of tax issues. We will outline below a non-exhaustive list of when it would be helpful to enlist the expertise of a qualified tax lawyer.
Tax Lawyers, Audits, Objections and the Tax Court of Canada
If you are being audited, this is your first chance to prove your filings are correct. Having a tax lawyer right at the start of your tax dispute will ensure your first opportunity to defend the way you’ve filed your tax returns is not wasted.
If you disagree with a CRA assessment or reassessment, you may dispute this through a Notice of Objection. You can do so by writing a letter to the Chief of Appeals at your tax services office, or by filing a T400A Objection form. The success of an Objection often depends on the level of detail and supporting documentation provided. A tax lawyer will be able to assess the validity of your Objection and ensure you follow through with it correctly. If the CRA does not accept the Objection, you may have the option to bring your case to the Tax Court of Canada.
If you are going to tax court, it is a good idea to have a tax lawyer to represent you and may even be necessary. Tax lawyers have been trained in the law and can navigate through the court system to best represent your interests. Similarly, a CRA tax evasion prosecution or prosecution for failure to file tax returns should only be defended by a tax lawyer. It is a tax battle that may end up in the criminal courts, and you want to ensure that you have the right representation. The lawyers at R&A Tax Law understand the ins and outs of the court system as they have litigated a number of cases with both the Tax Court of Canada and criminal court.
Tax Lawyers and Tax Residency
Canada taxes based on residency, which is different from the United States where they tax based on citizenship. What this means is that it is possible to pay no Canadian tax. That being said, Canadian taxpayers should ensure that they do this properly to avoid problems with the CRA in future. Tax lawyers are well versed in tax residency, and can best advise you on the proper steps to take to ensure that you are not required to pay Canadian taxes on your worldwide income.
Tax Lawyers and the Voluntary Disclosure Program
The Voluntary Disclosures Program (VDP) allows those who have either not filed their taxes, or made mistakes on previous filings, to come forward and correct these errors.
A voluntary disclosure starts with an application to the CRA requesting that you be allowed into the program. If your disclosure is not accepted, your tax returns will still be sent for processing, but you will be hit with major penalties, and interest charges, not to mention possible criminal charges.
Our tax law firm understands the principles of a voluntary disclosure and can assist you with this application, ensuring you meet all of the requirements so that your disclosure is accepted.
Tax Lawyers, Tax Debts and Taxpayer Relief Applications
Taxpayers may struggle to meet their tax obligations for a number of reasons beyond their control. Unfortunately, once you have been assessed or reassessed by the CRA, your tax debt may be due immediately and CRA collections may be breathing down your neck. Tax lawyers know the ins and outs of CRA collections, and are in the best position to assist taxpayers who are trying to get themselves on payment plans. Tax debts can also often lead to significant penalties and interest for those who are unable to make timely payments, thereby increasing an already hefty tax debt. Many people find that themselves in this situation and they may apply to the Taxpayer Relief Program to request relief in the form of waiving interest and penalties. An application for relief may be made by completing an RC4288 – Request for Taxpayer Relief.
While the CRA does provide this avenue for relief, relief is often denied to uniformed applicants who fail to meet the confusing CRA policies for relief. This is because each taxpayer relief application is considered on a case by case basis, by different individuals working out of different offices, and as such, there is often a lack of transparency and consistency by the CRA. Therefore, it may be useful to contact a professional who is familiar with the CRA’s administrative policies and procedures to give you the best chance for relief.
If you feel overwhelmed with your tax situation, you are not alone. The Toronto tax lawyers at R&A Tax Law have the expertise and experience to assist you in all tax related matters. Call us now for a free consultation!
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.