Written on April 16, 2013 – 7:00 am | by Steven Frye
As we scramble to file our personal tax returns, I am reminded once again how technology has influenced this process. Most of us will be filing electronically either thru our own devices or thru electronic services provided by others. As you maybe aware the Canada Revenue Agency (CRA) is making a concerted effort to get everybody and everything filed electronically. The problem is we are not quite there yet on some important aspects of electronic filing.
Recently CRA was asked to comment on a tax court case in which the Judge found for a taxpayer who was denied a business investment loss because he indicated electronically he was making a specific election under the Act to crystallize the loss but he had not filed the necessary documentation by paper by the due date. Notwithstanding this case, CRA remained insistent that elections, designations, agreements, waivers, and/or special elections have to be submitted in writing by the deadline stated in the Income Tax Act and cannot be submitted electronically. A taxpayer can indicate that he or she has made an election and tick the Election field in the tax software program, however, this does not constitute the election. A paper election must be filed as well.
By extension, this applies to executors who are filing returns on behalf of the estates they are administering. When it comes to the electronic filing of some key documents such as elections, CRA is not quite there yet. Executors should continue to file paper until further notice. The implications can be quite serious, indeed perilous if they don’t.
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