HST Penalties
Canada Revenue Agency systematically issues penalties to HST filers they think are neglectful or misleading. Often this results in the 6% penalty placed against late payments and reassessments especially in the case of credits that have been already paid. Don’t swallow it. It is well within CRA’s mandate to cancel this type of charge against you that likely never should have been applied in the first place. You must aggressively argue with CRA and question why the penalties were apllied in the first place and you should win. Consider this a problem for your accountant. The worst that can occur is that you will get a tax deduction for penalties and interest.

Regarding Oral Assistance from Canada Revenue Agency
Wrong or just plain shoddy verbal assistance that you could get from the Canada Revenue Agency is not allowed to be used to argue or appeal a penalty or assessment. In 1999 a DTC (Island Orthodontics) ruled that CRA has no accountability to taxpayers who do not verify any advice or information they may obtain from CRA.

Here is a LIst of Frequent Misconceptions Regarding Tax Disputes That You Must Avoid

Making assumptions that are not backed by years of practice can prove costly.

Misconception CRA always assumes you are completely at fault.
Alternative Honesty is the best strategy. Establish that you never had bad intentions.

Misconception If you make use of a delaying tactic it will make a difference.
Alternative Insist on a prompt solution, catch CRA unprepared for your request to solve the dispute instantly.

Misconception You assume that the auditor has all the support and documents required to support their arguements.
Alternative Ask for detailed reasons, details they are depending on, exact legal requirements or basis as it applies to your circumstances. You be able to then fight over who has the best support for their position – and this will help negotiating settlements.

Misconception CRA assumes you have the means to pay their re-assessment
Alternative Establish that they may possibly be powerless to obtain what they expect since you plainly do not possess the cash due to your current circumstances. CRA understands that they will incur high expenses with many collection activities.

Misconception CRA can’t assist you, or so you think
Alternative Indeed, they often are willing to be accommodating. Ask for alternatives and determine what they need to be able to meet you halfway. For instance, some items of home office or automobile expenditures.

Misconception Canada Revenue Agency is completely knowledgeable of your circumstances and motives you did what you did.
Alternative {CRA personnel appreciate you are trying to reduce tax, therefore don’t deny the obvious. Ensure their facts and knowledge of your own decision process for your tax treatment are absolutely correct, You don’t want to start off arguing data at the appeal level as the onus of proof is already on you to make sure you have supplied the correct facts. What you need to use are the details most helpful of your position.

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