An HST Builder Audit is a review conducted by the Canada Revenue Agency (CRA) to ensure that individuals or entities involved in building, renovating, or selling residential properties are properly reporting and remitting Harmonized Sales Tax (HST).

The CRA has specific programs and initiatives aimed at identifying “builders” as defined under the Excise Tax Act (ETA). In short, if you have constructed a new home or substantially renovated an existing one, you may be considered a “builder” under the ETA and could be liable for significant HST obligations.

Below is a breakdown of what might trigger an HST Builder Audit and what it entails:

1. What Triggers an HST Builder Audit?

• New Home Sales: Selling a new or substantially renovated home soon after construction or renovation.
  
• Quick Turnaround: Selling a newly built or renovated home after living in it for only a short period.
  
• Frequent Listings: Repeatedly listing newly built or renovated homes for sale.
  
• House Flipping: Regularly purchasing, renovating, and selling homes.

2. What Does the Audit Involve?

• Review of Documentation: The CRA will request some of the following documents:
  
  • Building permits.
    
  • Purchase and sale agreements.
    
  • Construction contracts and invoices.
    
  • Mortgage terms and loan agreements.
    
  • Proof of occupancy and use of the property.
    

3. The CRA Sent Me a Letter Stating That I Am a “Builder” And Must Pay HST, What Can I Do?

If you’ve been notified of an HST Builder Audit, ensure that you respond promptly and provide the CRA with the requested information. Proactive preparation can help minimize stress and ensure compliance.However, do not provide information to a CRA auditor without its essential context. Clearly presenting your case and ensuring compliance with the technical requirements of the Excise Tax Act (Canada) are crucial when responding to a CRA Builder Audit.

Receiving a CRA Notice of Reassessment can be a stressful experience. If you have just opened that dreaded envelope, you might be feeling confused or even worried. 

But take a breath–there are clear steps you can take to address the situation calmly and effectively! Here are five steps to help you respond and manage a CRA tax reassessment with confidence:

Step 1: Take a Moment and Read the Reassessment Carefully

It’s easy to get overwhelmed when you see that a CRA notice of reassessment has arrived, but the first thing you need to do is take a deep breath. Open the letter and carefully read through the entire notice of reassessment. It will detail why the CRA has made changes to your original filing, and understanding the reasoning is crucial before moving forward.

Step 2: Compare Your Original Filing to the CRA’s Reassessment

Once you have reviewed the tax reassessment, compare the numbers on the document with what you originally filed. Look for any discrepancies in income, deductions, or credits. This comparison will help you pinpoint where the changes have occurred and whether they make sense based on your records.

Step 3: Determine the Cause of the Discrepancy

Now it is time to dig into the details. The reason for a tax reassessment can vary. Maybe it is a simple mistake from the CRA’s side, or perhaps some supporting documents were missed when you originally filed. Take note of whether the CRA’s adjustments are due to an error or misunderstanding. If you believe they have made a mistake, you will need to take action.

Step 4: Get Professional Help from a Tax Lawyer

If the tax reassessment is complicated or if you are unsure about the next steps, do not hesitate to reach out for help. A tax lawyer can provide expert advice tailored to your specific situation. They will guide you through the process of understanding your rights and options, especially when it comes to filing a tax dispute appeal. With the expertise of a tax lawyer, you’ll have a much clearer path ahead.

Step 5: File a Tax Dispute Appeal if Necessary

If you believe the CRA’s tax reassessment is wrong, you have the right to file a tax dispute appeal. This is a formal process where you can challenge the CRA’s decision. Having a tax lawyer on your side can be a huge advantage here, as they will ensure that your case is presented effectively, all necessary documents are submitted, and that your appeal has the best chance of success.

Find Legal Assistance for Your CRA Notice of Reassessment

Facing a CRA notice of reassessment can be nerve-wracking, but taking the right steps can make the process a lot more manageable! If you are unsure about what to do next or if you need assistance with a tax dispute appeal, contact us today. Our experienced tax lawyers are here to help you navigate this challenge with confidence.

When dealing with taxes, most Canadians think of tax forms, filing deadlines, and sometimes, a CRA reassessment or audit. But what happens when the situation escalates? 

What if the CRA’s actions lead to a court case? Can a tax lawyer help? The answer is yes. A tax lawyer can play a pivotal role in representing you in court when your tax issues require legal intervention! 

Here’s what you need to know about how tax lawyers assist you in the courtroom and beyond.

Understanding the Role of a Tax Lawyer

Tax lawyers are not just experts in interpreting tax laws and handling assessments. They are your legal allies when you’re facing significant tax disputes, including those that could lead to court. Whether it’s a CRA reassessment that you disagree with or an impending CRA audit, tax lawyers are there to protect your interests.

These professionals can act as your taxpayer legal representation, whether you are involved in a formal appeal or a court trial. Their deep understanding of tax law, court decisions, and the tax system enables them to guide you through the complex world of taxation.

When Do Tax Lawyers Represent You in Court?

There are several instances in which a tax lawyer can represent you in court, including:

CRA Reassessment Disputes

If you believe the CRA reassessment is incorrect and want to challenge it, a tax lawyer can take up your case. They can file an appeal and represent your case in court, advocating on your behalf.

CRA Audit Defense

If you are being audited by the CRA and feel the CRA audit is unfair or intrusive, a tax lawyer can step in to defend your case. They will negotiate with the CRA, ensuring that your rights are respected.

Tax Penalties and Prosecution

If the CRA accuses you of tax evasion or fraud, the stakes are high. A tax lawyer can provide taxpayer legal support to minimize penalties and protect you from prosecution. If a court appearance becomes necessary, they’ll represent you every step of the way.

Tax Debt Resolution

If you owe substantial tax debt, a tax lawyer can help negotiate settlements with the CRA, reduce the amount owed, or work out a manageable repayment plan. If the dispute becomes a legal matter, your tax lawyer will be there to represent you in court.

Why You Need Taxpayer Legal Representation

Having experienced taxpayer legal representation is crucial when facing serious tax matters. Tax laws are complex, and tax lawyers are equipped to handle cases that involve not only assessments and audits but also appeals and legal proceedings. 

If you are facing a CRA audit, CRA reassessment, or any other tax-related legal matter, do not wait until the situation escalates. At Taxpayer Law, we provide expert taxpayer legal support, guiding you through every step of the process. 

Our experienced tax lawyers will ensure that your rights are upheld, and we will be by your side whether the situation requires negotiation or court representation.

Contact us today for a consultation and experience the peace of mind that comes with professional, taxpayer legal representation!

Living abroad is a dream for many Canadians–whether it is to pursue a new career, immerse in a different culture, or simply explore new opportunities in life. But as exciting as international adventures may be, they come with a lot of questions about your tax obligations. 

If you are a Canadian living abroad you may have a lot of questions about paying your taxes and how to do it when living abroad. We are here to answer your questions so you can stay compliant and avoid issues with the tax court of Canada! 

Canadian Taxes and Residency Status

One of the biggest factors in determining your tax obligations while living abroad is your residency status in Canada. Are you considered a non-resident? Or are you a deemed resident?

Non-Resident for Tax Purposes

If you are living abroad and have cut ties with Canada, like selling your home, not having dependents or a spouse living in Canada, and staying less than 183 days in a year, you may be considered a non-resident. As a non-resident, you are generally only required to pay Canadian taxes on income earned in Canada.

Deemed Resident

Some Canadians living abroad, like those working for the federal or provincial government or the Canadian Armed Forces, can be considered “deemed residents.” Even if you don’t have strong residential ties to Canada, the CRA may classify you as a deemed resident for tax purposes if you spend more than 183 days abroad. This means you will still be required to file taxes in Canada on your worldwide income.

The Role of Tax Treaties in Taxation

Canada has signed tax treaties with many countries to avoid double taxation. These agreements ensure you aren’t taxed twice on the same income—once in Canada and again in the country you’re living in. If you’re living in a country that has a tax treaty with Canada, these treaties can significantly affect the taxes you owe. To see if this applies to you, consult an experienced tax lawyer. 

Filing Your Taxes as a Canadian Abroad

Even if you’re living outside of Canada, your tax filing responsibilities do not end. Whether you are a non-resident or a deemed resident, you need to report your income to the CRA if you have Canadian-source income. The filing process can be a bit complex, especially when factoring in international tax treaties or foreign income, but the CRA provides guidelines for both non-residents and deemed residents. Here are some things to keep in mind for filing:

Deadlines

The general tax filing deadline for Canadians is April 30. If you are self-employed or have a spouse who is, the deadline extends to June 15. However, if you owe taxes, payments are due by April 30 to avoid interest.

Required Documentation

Keep track of global income, Canadian-source income, tax paid abroad, and any relevant financial documents. This will be vital when filing your return.

Why You Need a Tax Lawyer

Tax laws can be intricate, especially when you are dealing with cross-border taxation. You don’t want to miss out on potential savings, or worse, end up on the wrong side of the law. A tax lawyer can guide you through the complexities of Canadian taxes, help you navigate tax treaties, and ensure you comply with all necessary filing requirements.

At Taxpayer Law, our tax lawyers are here to help expats navigate the complexities of Canadian taxes and ensure compliance with both Canadian and international tax laws. 

We understand that every individual’s situation is unique, and we are dedicated to helping you minimize your tax burden while avoiding costly mistakes.

Reach out today to get the expert support you need to manage your Canadian taxes confidently and effectively.

Tax season can be a stressful time, especially if you are facing the daunting reality of owing money to the CRA. But before you let anxiety take hold, take a deep breath. You are not alone! Many Canadians struggle to meet their tax obligations, and the good news is, there are solutions available.

If you are facing a CRA tax reassessment it is time to take action!

Receiving a CRA tax reassessment can be scary, but it does not have to mean financial doom. This simply means the CRA has recalculated your tax liability, and you may owe additional funds. The key is to address the situation proactively.

What Are Your Options

You do have options in the form of tax lawyers who can provide invaluable taxpayer legal support to help you navigate tax debt and find the best solution for their unique circumstances. Depending on your situation, here is is what a tax lawyer may advise you to do:

Negotiating a Payment Plan with the CRA

The CRA is often flexible when it comes to repayment. You can set up a manageable instalment plan to pay your debt back over time.

Making a Partial Payment

Even if you can not pay the full amount upfront, every bit counts.  A partial payment can help reduce the accruing interest and demonstrates your willingness to resolve the issue.

Deferring Your Payment

In certain situations, the CRA may allow you to delay your tax payment until your financial situation improves.

Requesting Taxpayer Relief

Depending on your circumstances, you may be eligible for relief from penalties and interest. This can significantly reduce your overall tax debt. A tax lawyer can help you assess your eligibility and navigate the application process.

Considering a Consumer Proposal

A consumer proposal is a legally binding agreement between you and your creditors, including the CRA. It allows you to settle your tax debt for a reduced amount, often up to 80% less.

Bankruptcy

While bankruptcy should be considered a last resort, it can completely eliminate your tax debt, allowing you to rebuild your finances from scratch.

Contact Experienced Tax Lawyers for Legal Support

No matter the route you choose, taking action is crucial!

Tax debt can feel overwhelming and so can CRA tax reassessments, but there is help available! At Taxpayer Law, our tax lawyers can help you take strides towards a brighter financial future. Do not let tax debt control your life. Take action, explore your solutions, and find the path to financial freedom with our taxpayer legal support services.

Contact us today to get started!