# CRA's Notice of Reassessment



## leeder (Jan 28, 2012)

I have a question in regards to the Notice of Reassessment from CRA. My dad received one today, and CRA apparently revised his employment income up by about 8k, stating that it has adjusted to correspond to the amounts reported by his employer (now former, since my dad retired). Originally, this $8k amount was reported by the employer as employment income (Box 14 on T4). However, later they issued my dad with an amended T4 (as well as a letter, saying the 'Amended' version is the valid one) by revising that $8k amount as retiring allowance (Box 66 on T4).

I filed the return for my dad using via paper submission to CRA, 'innocently' thinking that by just including the amended T4, it should satisfy CRA that there is an amendment.... guess not. What steps should I take in order to deal with this situation? Should I give CRA a call? Should I file an official objection? If I have to file an official objection, what do I need to complete? What supporting documentation should I provide? Also, should my dad still pay the amount owing to avoid the interest? Deadline is in about two weeks... Please advise. Thanks!


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## domelight (Oct 12, 2012)

leeder said:


> I have a question in regards to the Notice of Reassessment from CRA. My dad received one today, and CRA apparently revised his employment income up by about 8k, stating that it has adjusted to correspond to the amounts reported by his employer (now former, since my dad retired). Originally, this $8k amount was reported by the employer as employment income (Box 14 on T4). However, later they issued my dad with an amended T4 (as well as a letter, saying the 'Amended' version is the valid one) by revising that $8k amount as retiring allowance (Box 66 on T4).
> 
> I filed the return for my dad using via paper submission to CRA, 'innocently' thinking that by just including the amended T4, it should satisfy CRA that there is an amendment.... guess not. What steps should I take in order to deal with this situation? Should I give CRA a call? Should I file an official objection? If I have to file an official objection, what do I need to complete? What supporting documentation should I provide? Also, should my dad still pay the amount owing to avoid the interest? Deadline is in about two weeks... Please advise. Thanks!


 CRA would re-calculate the amount based on the ammended T4. It's reasonable to assume they may be correct.
-If you dont pay them and later document you never never owed them then any applicable interest would be reversed.
-If you owe them then the interest is running daily until their paid.

In order to have the amount re-assessed. You would need to submit an ammended tax return accounting for the ammended T4 slip.
(If you have this prepared you would be able to review before sending to CRA and cross referencing the payable amounts on the original tax return to determine if CRA is correct.)

If your really determined you could also cross reference the ammended T4 with paystubs to confirm it is correct also. (if you disagreed you would need to take it up with the employer and have them send additional ammendments to CRA before being able to sort the matter out with the Feds)


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## Spudd (Oct 11, 2011)

FP, you replied to the wrong thread on this.


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## stardancer (Apr 26, 2009)

CRA is probably right, as both your dad and CRA got the amended T slip. Redo the tax return with the amendments to make sure the figures are correct. If they are, then he has to pay the amount owing and interest immediately to avoid more interest. Actually, that should be paid up front anyways to stop the clock. If the figures are incorrect, submit a T1Adj or even a letter showing where they are wrong. (Sometimes CRA will add the new amount but forget to take off the old amount.) Attach a copy of the amended T4.

There is nothing to object to. The employer made a mistake and your dad got caught in the middle. CRA really doesn't care about who made the mistake- they just want the money.


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## Four Pillars (Apr 5, 2009)

Spudd said:


> FP, you replied to the wrong thread on this.


Yes, I certainly did. Thanks.


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## kcowan (Jul 1, 2010)

Yes file a T1-Adj with the corrected T4 and include a letter pointing out that they had probably used the original in error.

If that does not work, file a Notice of Objection. They always get treated seriously. And all amounts owing get put into suspense.


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## Eclectic12 (Oct 20, 2010)

Okay ... if I've understood the situation, the first T4 had the income + the $8K as one income amount. Then the amended T4 arrived where the income amount was reduced by $8K and a new $8K recorded was in box 66. 

Looking at the sample T4 on CRA's web site, the note for box 66 says this is an eligible retiring allowance & to see line 130 of the tax guide.
http://www.cra-arc.gc.ca/E/pbg/tf/t4/t4flat-12b.pdf

Line 130 says


> A retiring allowance may be made in lump-sum payments, but you must include them in income when you receive them.


http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/130/rtrng-eng.html


So it would seem that both the income and the eligible retiring allowance have to be reported as income (which is what the CRA re-assesment is doing).

The question is whether some or all of the box 66 amount was transferred to either an RRSP or RPP - this seems to be the way that less income would be reported and that there would be a problem with CRA's re-assessment.

Or am I missing something?


Cheers


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## leeder (Jan 28, 2012)

Eclectic12 said:


> Okay ... if I've understood the situation, the first T4 had the income + the $8K as one income amount. Then the amended T4 arrived where the income amount was reduced by $8K and a new $8K recorded was in box 66.
> 
> Looking at the sample T4 on CRA's web site, the note for box 66 says this is an eligible retiring allowance & to see line 130 of the tax guide.
> http://www.cra-arc.gc.ca/E/pbg/tf/t4/t4flat-12b.pdf
> ...


Well, I managed to correct this situation with CRA. In fact, it was their administrative error that resulted in the Notice of Reassessment.

It looks to me everyone is confused as to what happened. This situation, in general, is confusing anyway. Here's the details:
- Late February: received two T4s. One contained the normal employment income, CPP, tax deductions. The second T4 slip contained the retiring allowance amount. In this second T4 slip, the employer put the retiring allowance amount in Box 14 employment income and Box 66 eligible retiring allowance.
- Mid-March: received letter and amended T4 slip. Letter states that there was an error with the T4 slip sent in February regarding the retiring allowance. The slip sent with this letter and marked as AMENDED is considered valid. Note that this slip removed the retiring allowance amount from Box 14 Employment income. This amended slip only has Box 66 and the income tax deduction.
- Late March: we filed the tax return using the AMENDED slip for retiring allowance
- June: received Notice of Assessment
- November: received Notice of Reassessment. Explanation of NOR states that CRA is adjusting to correspond to the T4 slip submitted by the employer. Per the NOR, the amount added back to employment income is the same as it was prior to the amendment.

That's the gist of what happened. Gave them a call up and emphasized to them that there was an amended T4 slip, which they have in their records along with the old unamended slip that they used to do the NOR. The agent told me they have now adjusted and to wait 6-8 weeks for another NOR.


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## Eclectic12 (Oct 20, 2010)

leeder said:


> Well, I managed to correct this situation with CRA. In fact, it was their administrative error that resulted in the Notice of Reassessment.
> 
> It looks to me everyone is confused as to what happened. This situation, in general, is confusing anyway...That's the gist of what happened. Gave them a call up and emphasized to them that there was an amended T4 slip, which they have in their records along with the old unamended slip that they used to do the NOR. The agent told me they have now adjusted and to wait 6-8 weeks for another NOR.


That's part of the ... hmmm, adventure? of posting in this medium. So much of what is in a normal conversation such as body language is missing.

It's great that it's been cleared up!


Cheers


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