Tax Matters – On a Need to Know Basis
By Michael L. Crawford, BA(Hons), CMA
There are a few things about taxes that every Canadian needs to know about.
www.cra.gc.ca. That’s it. It’s that simple to find the Canada Revenue Agency (CRA) on the internet. From here you choose your language of choice English or French and proceed to the site’s well laid out home page. No matter how well a website is presented it cannot possibly answer all of your questions on the first page, especially when the topic is the Income Tax Act. So you can use their search window to narrow your search.
If you are a newcomer to Canada, look for CRA’s pamphlet Newcomers to Canada.
You can also find out how to prepare a simple personal tax return, where to mail it, and you can search for specific forms and publications. But, sometimes no matter how hard you look, you can’t find the information you need; or worse you find what you are looking for and become more confused than ever. That is where a good accountant comes in.
First and foremost the Canada Revenue Agency takes each person’s privacy seriously. To that end they will only discuss an individual’s file with that individual. However, the CRA also recognizes that sometimes people need help with their tax affairs and allows them to designate a representative to talk with them (CRA). To do this, you may write a letter to the CRA or simply complete form T1013 Authorizing or Cancelling a Representative.
In addition to restricting (or not) your representative to certain tax years you must also grant your representative a level of authorization. There are only two. Level 1 allows CRA to disclose information to your representative but doesn’t allow them to make any changes to your account. Under Level 1 the CRA may disclose your marital status, but may not disclose any information about your spouse without a consent form also being on file for him/her as well. Level 2, in addition to disclosing information, also allows the representative to make changes to your tax file, with the exception of: your marital status, your address and your direct deposit information. These items may only be changed by you or your legal representative. A legal representative is someone who has power of attorney or guardianship (usually of a minor).
Don’t overlook the Consent Expiry Date. If left blank, the consent form does not expire until you submit another consent form cancelling it or upon your death. If you change representatives (e.g. accountants) the consent form remains valid, allowing the former representative to request information and even make changes. The consent expiry date setting three years from the date the consent form is signed. This will resolve most issues with CRA and protects you should you in the future.
Finally, this consent form is between you, your representative and the Canada Revenue Agency. The consent form cannot be used to get information about you from any other government agency, private company or individual who may legally hold information about you. The consent form is simply designed to make communicating with the CRA a bit easier.
The Income Tax Act and other related legislation are large and complex laws that frustrate even the professionals at times. This article is intended to increase your awareness of issues that affect you and encourage you to look more closely at the ones that relate directly to your situation. You are encouraged to seek professional guidance specific to your unique situation.