Penalties

New CRA Policy on Gross Negligence Penalties for SR&ED Claims The Canada Revenue Agency (CRA) has updated its enforcement approach for Gross Negligence Penalties under subsection 163(2) of the Income Tax Act, affecting Scientific Research and Experimental Development (SR&ED) claims. Effective January 28, 2025,...

Offshore Audits: What You Need to Know In recent years, the Canada Revenue Agency (CRA) has ramped up its focus on offshore tax compliance, leading to a significant increase in offshore audits. These audits are designed to ensure that Canadians with offshore assets and income are reporting them accurately and paying the...

The Principal Residence ExemptionThe principal residence exemption is a significant tax benefit in Canada, shielding homeowners from capital gains tax when they sell their primary home. However, for a property to qualify for this exemption, it must meet certain criteria. Let’s explore these requirements and the remedy available if a taxpayer...

The authors of this article address the serious problem of lack of effective recourse for Canadian taxpayers where they are subject to the abusive exercise of audit and/or assessment powers by tax officials:...

The Government of Canada has recently proposed enhancing the Canada Revenue Agency’s (CRA) audit powers under the Income Tax Act. CRA already has vast powers to compel taxpayers to provide information and documentation. CRA can even force taxpayers to appear for in-person meetings. However, CRA claims this is not enough and new measures will be...

In Canada, the obligation to report income accurately to the Canada Revenue Agency (CRA) is not just a legal requirement but a cornerstone of our tax system. However, instances of unreported income can arise due to various reasons, sometimes inadvertently, leading to potential legal implications with the CRA.Understanding Unreported...

The Canada Revenue Agency’s (CRA) Voluntary Disclosure Program (VDP) offers taxpayers a chance to correct past errors or omissions without facing penalties or prosecution. However, for a disclosure to qualify under this program, it must meet specific criteria, with the most critical being that the disclosure is voluntary. This blog will delve...

Gross Negligence Penalties are penalties meant to punish taxpayers such as for their failure to report income or in claiming false credits. Depending on whether they are GST/HST, or Income Tax related, the penalty will add 25% or 50% to any balance owing.To issue a gross negligence penalty, the Canada Revenue Agency (“CRA”) must prove that...

When taxpayers owe money to the Canada Revenue Agency (“CRA”), the amounts can quickly rise because the CRA charges interest on top of the amount owing. Additionally, if you file late, the CRA will hit you with penalties, and they even charge interest on those penalties. Before you know it the amount you owe could be insurmountable.Interest...

Bulk Taxpayer Relief Requests & Extreme Weather Events Canada Revenue Agency (CRA) released guidance on “bulk” taxpayer relief requests as well as taxpayer relief for “extreme weather events.” CRA makes specific reference to the “unprecedented...