One out of two taxpayers has money at the CRA: Surprised? We were.

by INTEGRIS Pension Management Corp. March 19, 2018 (Revised March 19, 2018)
Now that Canadians are in the middle of personal tax season for 2017, we wanted to provide some new information that we hope will be of interest to taxpayers from coast to coast.

INTEGRIS Pension Management Corp. has developed many business relationships with firms in the Canadian financial services industry over the past 5 years. Some are large investment management firms, insurance companies or accounting firms. Sometimes we come across niche service providers that fill a particular need for our clients outside of our core area of expertise.

We are pleased to reproduce an article by Stan Samole, CEO of Family Tax Recovery, a firm that specializes in personalized tax reviews to assess whether an individual taxpayer might have overpaid taxes in the previous 10 years.

Readers of the guest article below are encouraged to ask questions by emailing them to a dedicated email address: familytaxrecovery@integris-mgt.com

Alternatively, a link below provides access to a landing page for those wishing to learn more about this innovative service.

The views expressed by the guest writer below are those of the author and do not necessarily represent those of INTEGRIS Pension Management Corp.



One out of two taxpayers has money at the CRA: Surprised? We were.
By Stan Samole, CEO, Family Tax Recovery - an INTEGRIS strategic partner.

In the past 3 years Family Tax Recovery have conducted over 15,000 personal 10-year tax reviews that have produced over $10 million in refunds triggered by amended tax returns filed with the Canada Revenue Agency.

Fact: The CRA allows taxpayers to amend their taxes for the previous 10 years. Many taxpayers and their accountants either are unaware of this policy or fail to consider this internal audit tool to recoup overpaid taxes.

Fact: There's between $30 to 50 billion at the CRA that currently legally belong to taxpayers but that hasn't been claimed by them. That's not unreasonable considering the 2018 CRA budget includes $300 billion of revenue - with 75% of every tax dollar coming from personal taxpayers.

What are some of the credits that taxpayers (especially those who don't rely on experts to prepare their returns) often miss? Typical sources of refunds include eligible dependent, working income tax benefit, northern resident deduction, donation allocations, caregiver deduction, child amount, child tax benefit, clergy residence deduction, medical expenses, spousal amount, family tax cut, exempt income, tuition amounts, etc. Plus errors and omissions correction such as incorrect tax deducted from source, incorrect amounts in RRSP, HST, Prov. tax and benefit programs, capital gain/loss misapplications and miscalculations, etc.

Why are 10 year tax reviews almost unheard of? The simple answer is unless one is wealthy a personal tax review capable of uncovering unclaimed credits is out of reach. For average working class families paying thousands in professional fees is a non-starter if there is no guarantee of a refund after the revised assessment is filed with CRA.

The Family Tax Recovery Solution: An assessment on a contingency basis similar to those sought by companies (HST, Custom Duties, Research and Development costs, Disability credits, etc.). At Family Tax Recovery we only conduct 10-year personal tax reviews on a contingency basis. Contingency means that if CRA does not issue a refund, there is no fee payable for the personal tax review.

Our research indicates that approximately 60% of working families and 70% of wealthier families are entitled to a CRA refund. Refunds range from a few hundred to many thousands of dollars. This group of middle class and wealthier taxpayers make up 70 to 80%+ of the available refund pool.

There are 30 to 50% of low income families that are entitled to a refund. We have been endorsed by the Anglican Church for our work with low-income families. Government Agencies like Ministry of Family Services and Rural Community Development, Community Services also refer clients to us. We've reached out to the leaders of all 3 Aboriginal Peoples', the Minister of Finance and the Minister of Revenue to put in place a national program that ensures low income families have access to this important resource. Low income families have $3 to $5 billion at the CRA and recovery could make a significant positive impact on many of their lives.

For those fearful that undergoing a review will trigger a tax audit, Family Tax Recovery has yet to trigger one. The reason audits aren't triggered by our process is that filing an amendment is not like filing a tax return. The taxes were already previously filed and may or may not have been audited. We just file an amendment relating to those previous years. The CRA reviews the amendment proposed and either accepts it based on their records or refuses it, thereby completing the process. Fortunately, 99% of the amendments we submit get approved by CRA. Very little discretion or judgment goes into determining whether one forgot to claim a credit in a year or not.

Copies of your previous years' taxes are not required for a personal tax review. All the work is done by Tax Specialists on the CRA web portal where your tax records are kept. You can also have online access to review your tax filings, documentation, etc. Signing up for direct deposit can also speed up the recovery process.

A personal tax review recovers funds that were lost forever. It's everyone's job to pay the appropriate taxes we owe. But it's also everyone's job to seek every opportunity within the confines of the Income Tax Act that Parliament adopted to help Canadians. Considering the funds recovered from the CRA legally belong to the taxpayers who failed to claim certain credits or calculate amounts on returns properly, those who are curious about recovering their own money should consider a personal tax review. Finally, when CRA refunds these tax dollars, they do not trigger new taxes since they are not income, but 'over-collected' taxes.

Stan Samole is a six time recipient of the Profit Magazine Award for Canada's fastest growing companies and has received the Consumers Digest Best Buy Award, The Source Innovation Award, a Feature story in the Financial Times and a dedicated chapter in the book "Secrets of Success from Canada's Fastest Growing Companies" by Rick Spence.