The tax office (a.k.a. Canada Revenue Agency) has formidable powers.
But it also has a Taxpayer Bill of Rights containing useful information whenever you need to deal with the CRA. I've always encouraged readers to use every legal means to minimize their income tax bill. For example, you should claim every allowable expense relating to hopefully making a profit in a self-employed sideline or other business, or in most investments.
If the CRA disallows some or all of the deductions, it could make sense - and dollars - to challenge that decision.
The bill of rights says "you have the right to a formal review and a subsequent appeal" and explains the process.
Also, "you have the right to be treated professionally, courteously and fairly.
"You can expect we will treat you with consideration at all times, including when we ask for information or arrange interviews and audits," says the CRA.
"Integrity, professionalism, respect and co-operation are our core values."
The CRA outlines your "right to lodge a service complaint and to be provided with an explanation of our findings." The CRA defines service as "the quality and timeliness of the work we performed. A service complaint could involve having received unclear or misleading information, staff behaviour matters, mistakes or undue delays."
Although I mentioned the following right in a column earlier this year, it's good to be reminded you can apply for "relief from penalties and interest under tax legislation because of extraordinary circumstances," which can include personal or financial hardship.
The CRA also pledges to warn Canadians about questionable tax schemes, and what could happen to people who get involved with such programs.
Bottom line: The balance of power is tipped sharply in favour of the CRA. So whenever you deal with the tax office about more than just a simple matter, first read about the rights the CRA grants taxpayers in case you need to refer to them.
For a full copy of the taxpayer rights guide, go to cra-arc.gc.ca and search for "Taxpayer Bill of Rights Guide."
Mike Grenby is a columnist and independent personal financial advisor; he'll answer questions in this column as space allows but cannot reply personally. Email [email protected]
