REVENUE CANADA.

Fairness Package creating positive results for some

REVENUE CANADA has promised to play fair with taxpayers. So be sure to pet in on the game. You could win big.

Even though you have done your tax filing duty for another year, you might read or hear about a tax tip or strategy that could have saved you money if you'd known about it before.

Under the former rules, Reve- nue Canada would allow you to go back only three years to ask to have your tax return reassessed. Now, under the Fairness Package, you may go back as far as the 1985 tax year.

“A client of mine hadn't filed his 1985, 1986, 1987 or 1988 per- sonal tax returns,” said Brandon Fahy, taxation principal with Co- opers & Lybrand, chartered ac- countants,

“He'd been advised not to file untii the income from his business activities had been determined. However, he had still contributed to an RRSP during those years and had tax withheld from employment income, _

- “Under the old rules, Revenue Canada wouldn't have gone back to those years. Under the Fairness Package, my client received tax refunds totalling about $20,000.’’

Fahy said’a scif-employed commission salesman hadn’t claimed car expenses in his 1986, 1987, 1988 and 1990 tax returns although he did have enough documentation to support the claims. Being able to request a reassessment of the three earlier returns — which under the old rules wouldn’t have been possible ~—- “should produce a tax refund of about $7,500,” said Fahy.

He noted the tax act contains more than 120 elections which provide taxpayers with an oppor- tunity to choose, from specific options, how the tax laws should apply to their financial affairs for tax purposes.

“Under the Fairness Package, you may go back as far as 1985 and either make a late election, or change or cancel the election you did make if you can show the election you chose caused an unintended tax result,’ Fahy said.

“*However, you can’t use this provision to carry out some ob- vious retroactive tax planning ... although this is a grey area.’*

At preseat, 20 elections tall under this section of the Fairness Package. For example, when one spouse dies, assets like stocks and revenue property may pass to the surviving spouse (or spouse trust) at either the adjusted cost base (related to the original purchase price) or the fair market value at death.

“I was able to change the elec- tion that had been made when a

DOLLARS AND SENSE

client’s husband died in 1990 in connection with a rental proper- ty,’ said Fahy. ‘*The change sav- ed the widow about $25,000."

Another provision of the Fairness Package allows you to ask Revenue Canada to waive or cancel interest and penalties charged because you filed a return or paid your taxes late.

“Typicaily,”’ said Fahy, ‘‘this wil) happen only when there have been circumstances beyond the taxpayer's control, like death, disaster or civil disturbance, or when taxes owing were paid within 20 days of the date on the Notice of Assessment.*”

Finally, the Fairness Package simplifies the procedure if you disagree with Revenue Canada. You can just write a letter instead of having to file an official Notice of Objection on a prescribed form sent by registered mail. The new deadline is one year after the due filing date for the tax return (for example, April 30, 1994, for the 1992 tax return); the former deadline was 90 days from the Notice of Assessment’s date,

“If you believe you have a reason for making a request under the Fairness Package, you should go ahead,’ Fahy said. ‘Revenue Canada just might surprise you with a positive — and profitable — response."

Note: when your request does produce a refund you will also be paid interest calculated from ci- ther 45 days after the date your return is filed for the first time Gf you are filing for a previous year) or from the date on which you applied for the reassessment (if you are asking for a change toa previously filed return).

Mike Grenby is a North Shore-based colummist and in- dependent financial adviser who works with individuals; he will answer your questions as space allows — write to him c/o The North Shore News, 1139 Lonsdale Ave., North Vancouver V7M 2H4.

Bosom Buddies host guest speaker

ROSALIND MACPHEE will be a

guest speaker at the next meeting of Bosom Buddies, a North Shore support group for women who have experienced breast disease or breast cancer.

MacPhee recently won a prize in CBC. Radio’s national literacy competition in the personal-essay category.

Her story, Picasso's Woman, is a description of her own battle with breast cancer.

Question-and-answer period and an informal discussion will follow the reading of MacPhee’s essay.

The Bosom Buddy meeting will be held on May 31, at 7:30 p.m. in the Fireside Room, Delbrook Baptist Church, 515 West Wind- sor St. in North Vancouver.

Everyone is welcome. For fur- ther information about the group’s mectings, <all 926-1178 or 984-4460,

HOSTED BY

NORTH VANCOUVER CHAMBER OF COMMERCE

SPONSORED BY

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