What happens if I do not file my business or personal taxes?

First, the penalty system in Canada escalates. This means that the first year that you late file your taxes the penalty could be 17% of the tax you owe. The second year, the penalty could be up to 50%.

Second, the CRA could issue an arbitrary assessment which is their estimate of your tax liability.

An arbitrary assessment does not constitute a tax filing. The estimated amount of tax could be higher than what you owe; and, CRA will start collections procedures based on their estimate.

Third, certain elections that would reduce your taxes and some refunds could become unavailable.

What do you recommend for individuals and businesses that are behind in their taxes?

You should call our office so that we can deploy procedures to potentially reduce your late filing penalties to $NIL, file your taxes and assist you in making payment arrangements (if required).

I recommend that you do this with our office because we are very familiar with the procedures and how to navigate the tax system. This ensures that all your options are recognized and that you have a better chance of realizing them.

 © - Jacob Rawski, 2015

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