COMBINED AUDITS OF OWNER-MANAGED COMPANIES

In a June 18, 2015 Technical Interpretation (2015-0572151C6, Bogdan, John), CRA was asked about the perceived increase in requests of personal financial information of the shareholders of Canadian corporations selected for audit. Further, questions were asked with respect to information that is requested in relation to the shareholder’s spouse, children or other related parties. In some situations, the shareholders are asked to essentially complete statements of net worth.

CRA noted that the personal information from the shareholder and related parties is requested to ensure that business transactions are reported within the business and not in personal accounts. It was noted that internal controls and the segregation of duties are generally weak for such organizations. Therefore, indirect tests of income may be used to ensure the completeness of income reported. Indirect tests may include:

• bank deposit analysis;
• rough net worth calculations; and
• analysis of sources and applications of funds.

For further information see VTN Monthly Tax Update Seminar, Issue No. 412

CANADIAN TAX FOUNDATION – PRAIRIE PROVINCES 2016 CONFERENCE: DISPUTE RESOLUTION

Can CRA appeals make an assessment worse? Watch Paul Grower, BA (Hons), LL.B discuss insights from his panel at the Prairie Provinces 2016 Tax Conference.

CANADIAN TAX FOUNDATION – PRAIRIE PROVINCES 2016 CONFERENCE: FOREIGN EXCHANGE GAINS

Need to calculate foreign exchange gains and losses for tax purposes? Watch Jon Gilbert, LL.B discuss a few key points from his presentation at the Prairie Provinces 2016 Tax Conference.

PRIVATE HEALTH SERVICES PLAN (PHSP)

In an August 18, 2015 Technical Interpretation (2015-0581431E5, Underhill, Cynthia), CRA confirmed that in most cases a deduction for PHSP premiums paid for a sole proprietor (subject to the limitation in Section 20.01) can be made, even if the spouse of that sole proprietor is also a sole proprietor and deducts an amount in respect of premiums for another PHSP that covers the same individuals.

For further information see VTN Monthly Tax Update Seminar, Issue No. 412

CRA ISSUED WARRANTS: ACCOUNTANT'S 5 "R" ACTION PLAN

Getting issued a warrant from the CRA can be stressful. Watch Paul K. Grower BA (Hons), LLB and Joseph R. Devaney CPA, CA discuss the 5 "Rs" for accountants to follow if this happens.

These are the five “R”s that will get you through it:

1. Relax – try to – lots of pressure and stress

2. Respond – review warrant / call counsel

3. Remember – who / what / where / why?

4. Recognize – privilege and protect it

   • You cannot assert privilege over it “all”.

   • But, if in doubt – assert (CRA should seal the docs).

5. Report – to client and counsel ASAP.

Want to learn more from Paul? Register for the Lunch and Learn course Tax Disputes.