Assessment Based on Net Worth

The Canada Revenue Agency sometimes uses a basis of accounting known as net worth to assess, calculate and issue assessments against certain taxpayers.

The net worth basis of accounting consists of determining the amounts a taxpayer would have omitted to report, by proceeding with an analysis of his assets, year after year.

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Reimbursement Agreement

Taxation authorities are known to be efficient, quick and powerful when it comes to the collection of taxes owing…Various tax laws grant astronomical powers to collection officers, and the latter will not hesitate to make use of them in a timely manner.

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Arbitrary Assessment

When a taxpayer neglects to file his income and/or other tax returns, taxation authorities issue arbitrary assessments based on existing data that is more or less accurate.

While taxation authorities have full powers to issue arbitrary assessments, it appears that such assessments are often wrong and higher, in favour of such taxation authorities.

In such case, it is in a taxpayer’s best interest to immediately file the missing returns and undertake the necessary discussions in order to remedy the situation.

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Access to Your Tax File Information

The Canada Revenue Agency is required by law to give a taxpayer a complete copy of his tax file.

It is true that under various laws respecting access to information, taxation authorities have the obligation to cooperate and to provide your file information to you.  Many taxpayers are not aware of these provisions; however, they are of essential importance in a tax dispute.

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Tax Audit

A tax audit is the procedure whereby taxation authorities ensure a taxpayer’s legality and compliance with tax laws.

As the taxation system in Canada is based on the principle of self-assessment, it is important for taxation officers to have the possibility to audit a taxpayer’s accounting books, records and other such documents in order to ensure compliance with the law, including make sure that what is reported is a reflection of reality.

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