Azita Dehmobed,
TACC Accountant
Working away from home?
The Canada Revenue Agency (CRA) is reminding Canadians to properly indicate their province or territory of residence on their tax returns. This ensures that you are paying the taxes you owe, and allows the CRA to properly distribute the taxes it collects on behalf of provinces and territories.
When you let us know where you were living on December 31, it helps to determine which province or territory will receive your tax dollars. The CRA collects taxes for individuals on behalf of all provinces and territories except Quebec. Services and social programs that you and your family use on a day-to-day basis are directly affected when you don't pay taxes to the proper province or territory.
It's the law.
If you file a tax return and state that you live in a province where you do not actually reside, we consider this to be tax cheating. Each year, the CRA identifies people who file where they do not live in an attempt to avoid taxes. The consequences include significant interest and penalties, in addition to repayment of any tax credits and refunds you received as a result of the incorrect information.
Do you have ties to more than one province or territory?
To help you correctly determine your province or territory of residence, consider some of the same factors that the CRA will consider when reviewing your return:
• Where do you maintain a home or dwelling?
• Where does your spouse or common-law partner live?
• Where do your dependent children live?
The CRA also looks at other factors when further clarification is necessary, such as the province or territory where:
• You were employed or self-employed;
• You had healthcare coverage;
• Your driver's license was issued and your vehicle was registered; and
• You had your financial services, bank accounts, and RRSPs.
Did you make a mistake on your tax return?
If you wish to correct incorrect information on your return, you can do so through the CRA's Voluntary Disclosures Program. If you make a full disclosure before any compliance action is started, you may only have to pay the taxes and credits owing plus interest, but not penalties.
For more information, visit www.cra.gc.ca or call 1-800-959-8281.
Winning doesn't cost you!
Ottawa, Ontario, March 19, 2008… In keeping with the spirit of Fraud Prevention Month, the Canada Revenue Agency (CRA) is reminding the public that winners of sweepstakes and lotteries in Canada do not have to pay fees and taxes in order to claim their prizes.
The CRA has issued warnings in the past about scams in which individuals are informed they have won a large sum of money in a lottery or sweepstakes, usually from a foreign country. The individual is usually contacted by a legitimate-sounding financial institution claiming that it has a bank draft from a foreign sweepstakes company that is payable to him or her. The individual is told that, in order to receive the prize, they must first pay part of the taxes allegedly owed on the prize amount.
No taxes or fees of any kind have to be paid on lottery or sweepstakes winnings in Canada. Any unsolicited email, letter or telephone call telling you otherwise is a scam.
Visit www.cra.gc.ca/myths for more information on protecting yourself from this and other types of fraud.
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