With the Canadian tax deadline looming (Apr 30th), what should a tax payer do if they’ve encountered a situation with their taxes that they don’t know how to handle? Every accountant worth their salt will be working overtime now so who to turn to for advice?
How about Revenue Canada? I haven’t often come across the idea of calling them when you have problems, but I’ve done it a few times over the years and its very easy. The contact numbers are available here, they work extended hours leading up to tax time, and I’ve found them to be helpful and polite (although less so after you’ve called them “money grubbing soul suckers” as I had to learn by experience). A couple of years ago when I asked whether an external hard-drive should be treated as a expense or a capital cost allowance (CCA) they were able to promptly answer (CCA), and when I asked them what class number of CCA, they put me on hold and got back to me within a couple of minutes (class number 10).
The benefits are that they’re readily available (I’ve never had a long wait when I’ve called) and free.
The drawbacks are that if anyone is going to be a stickler for tax laws, its Revenue Canada. They’re CERTAINLY not going to give you any tax planning advice or suggest better ways to structure your finances. Additionally, they’ll interpret any ambiguities in their own favour. The flip side of this is that you never know what will be the outcome if your accountant gets too creative, so playing by the rules is a good idea (Mr. Cheap doesn’t fear much but he does fear Revenue Canada!).
This being said, I’ve found that accountants I’ve worked with in previous years weren’t particularly helpful either (which is why I’ve gone back to doing my taxes myself). Apparently tax preparation and tax planning are very different activities (accountants charge FAR more for tax planning: if you hire them for preparation that’s all you’re going to get).
The other drawback might be if you’re doing something illegal, you might draw attention to yourself. I’m not, so that wasn’t a consideration for me (if you have numerous accounts in the Cayman Islands perhaps calling them isn’t a good idea ). Asking them what expenses are valid for a grow-op might be a bad idea too. They’ve never asked me for identifying information (SIN or tax id or anything) – so I *THINK* its anonymous information (maybe they trace telephone numbers – who knows?).
What has your experience been dealing with Revenue Canada? Are their benefits / drawbacks I’ve missed?
Want to learn more about RESPs? Buy The Book:
The RESP Book: The Simple Guide to Registered Education Savings Plans
Everything you need to know about RESPs.