I got this from my accountant -
'CRA Penalties on Missing Tax Slips'
'The CRA is imposing punitive penalties on individuals who do not report income from a T-slip on their tax return – even if the omission was inadvertent.
The CRA runs a sophisticated T-slip matching program that checks the amounts and slips reported on your tax return with data filed by your employer (T4 slips) or other slips reporting investment or trust income (T3 & T5) based on information filed with the CRA from investment advisors which they are required to do.
There are several recent examples of the CRA imposing the federal subsection 163(1) penalty, and the provincial equivalent, on taxpayers who have repeatedly failed to report income from information slips on their personal income tax returns. The penalty is a combined 20% federal/provincial rate that will be applied to the amount of the second offence of unreported income.
Given this policy, when you are gathering your personal tax information, please ensure that you provide ALL of your tax information to us. Please also ensure you notify us if you have been reassessed for a missing slip in the past three years.
If you have extensive investments, you should take special care in organizing your tax slips as brokerage firms often issue late or amended slips. Please also be aware that many investment firms are now posting slips online where clients can retrieve them and many are not sending slips via mail. As such, please ensure you contact your investment advisor to ensure you are aware of how they are distributing investment slips.
An example of how the new policy works is as follows:
Mr. X is the director of several companies and the owner of a sizeable investment portfolio. As a result, each year he receives several T4 and T5 information slips. Mr. X inadvertently did not include $100 from a 2009 T5 slip on his 2009 personal income tax return because he misplaced or never received the T5 slip. The CRA noticed this omission when it ran its information slip matching program for 2009 returns and reassessed Mr. X's 2009 return to include the $100 in his income.
When Mr. X filed his 2010 tax return, he forgot to include director's fees of $25,000 reported on a 2010 T4 slip. Mr. X never received this slip because he moved during the year and the slip was sent to his former address. Mr. X discovered the omission after filing his return, but was not concerned as taxes had already been withheld from the income (i.e., technically, he thought he did not have an income tax liability).
The CRA's information slip matching program alerted the CRA to the $25,000 unreported income. As a result, the CRA charged Mr. X with a $5,000 penalty under subsection 163(1) of the Act and the provincial equivalent, even though Mr. X did not have an income tax liability associated with this income because the appropriate taxes were withheld.'
'CRA Penalties on Missing Tax Slips'
'The CRA is imposing punitive penalties on individuals who do not report income from a T-slip on their tax return – even if the omission was inadvertent.
The CRA runs a sophisticated T-slip matching program that checks the amounts and slips reported on your tax return with data filed by your employer (T4 slips) or other slips reporting investment or trust income (T3 & T5) based on information filed with the CRA from investment advisors which they are required to do.
There are several recent examples of the CRA imposing the federal subsection 163(1) penalty, and the provincial equivalent, on taxpayers who have repeatedly failed to report income from information slips on their personal income tax returns. The penalty is a combined 20% federal/provincial rate that will be applied to the amount of the second offence of unreported income.
Given this policy, when you are gathering your personal tax information, please ensure that you provide ALL of your tax information to us. Please also ensure you notify us if you have been reassessed for a missing slip in the past three years.
If you have extensive investments, you should take special care in organizing your tax slips as brokerage firms often issue late or amended slips. Please also be aware that many investment firms are now posting slips online where clients can retrieve them and many are not sending slips via mail. As such, please ensure you contact your investment advisor to ensure you are aware of how they are distributing investment slips.
An example of how the new policy works is as follows:
Mr. X is the director of several companies and the owner of a sizeable investment portfolio. As a result, each year he receives several T4 and T5 information slips. Mr. X inadvertently did not include $100 from a 2009 T5 slip on his 2009 personal income tax return because he misplaced or never received the T5 slip. The CRA noticed this omission when it ran its information slip matching program for 2009 returns and reassessed Mr. X's 2009 return to include the $100 in his income.
When Mr. X filed his 2010 tax return, he forgot to include director's fees of $25,000 reported on a 2010 T4 slip. Mr. X never received this slip because he moved during the year and the slip was sent to his former address. Mr. X discovered the omission after filing his return, but was not concerned as taxes had already been withheld from the income (i.e., technically, he thought he did not have an income tax liability).
The CRA's information slip matching program alerted the CRA to the $25,000 unreported income. As a result, the CRA charged Mr. X with a $5,000 penalty under subsection 163(1) of the Act and the provincial equivalent, even though Mr. X did not have an income tax liability associated with this income because the appropriate taxes were withheld.'