Taxpayers often think that it is possible to add in
additional old receipts that have been uncovered in their basements, or to file
personal tax returns going back decades. This is not the case. The Canada
Revenue Agency will only accept changes and filings of tax returns within a ten
year time frame.
This can be particularly dangerous when it comes to notional
assessments. If you do not file a tax return and the CRA issues an arbitrary assessment,
essentially filing the return on your behalf, you can only have the amounts
adjusted to actual by filing your tax return during the ten year period. Once
that period is exceeded, you are out of luck.
For example, the CRA notionally assessed a taxpayer for
their 2002 personal tax return in 2012. The 2002 personal tax return will only
be accepted until December 31, 2012. If the Canada Revenue Agency arbitrarily
assesses you for taxes of $100,000and you do not file your own return within
the ten year limit, that $100,000 of taxes owing will remain on your account.
There will also be penalties and interest applied on top of the tax. You may
need to use the equity in your home to pay it, or even result to a consumer
proposal or bankruptcy just to remove this amount from your tax balance, even
though you may have actually owed nothing for that year.
Don’t let time pass you by. It’s time to get
around to filing those outstanding tax returns, before it really is too late.
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