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I got a notice of assessment and have to pay CRA a few thousand bucks. However there's a mistake at their end and so I'll only owe about half that.

Do I pay them the whole amount now to avoid interest calculated daily or should I keep the portion that I think I won't have to pay. It could take them almost a year to get to my file.

I expect I'll end up overpaying 1500 to avoid paying interest but I'm sure they won't return my 1500 with interest. (After a year of enjoying it and sending their senators to Ottawa to have fun with underage girls).
 

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Pay it all to avoid penaties and interest and make your case (by letter) for re-assessment at the same time (pointing out their error). They will pay you interest on over-payments but it's a puny rate... just like the rate they charge. It adds up to 'noise'.
 

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I have in past refused to pay what the NOA said to pay. I had already run the numbers or called immediately to find the source of the error so I knew that once the missing/mistaken info was updated with CRA, what was owed would drop or not exist.


If you are confident about what will happen, I'd pay what is really owed plus a buffer. I'd also send a letter to document why it is less than what CRA says.

If you want to be 100% safe, then pay the full amount and follow up to get a refund.


The CRA collections department was assertive to point out that if I was wrong, the penalties/interest would be expensive but as I had verified everything (plus had a buffer), I declined their way of playing it safe.


Cheers


PS

I should add that I triple then quadrupled checked my numbers before willing to take the risk.
 

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I seem to get re-acessed a couple of times for each tax year. a few hundred at most. Pay in full, promptly. A lot of the time it is nicer to get it off your mind.

Then watch how you might recover this, or not, in the next year.
 

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Interesting ... if the numbers change, I trace it back/ask questions to understand the change so that I can avoid repeating my mistake or so that I can make my case for CRA to fix their mistake.

Or maybe the "watch" comment is more proactive than I am thinking.


Cheers
 

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In my view, re-assessments (if that is what is really meant), and/or NOAs that are issued slightly differently than a filed tax return should be relatively rare unless one's tax return is overly complicated for some reason. With tax software these days, there should never be a 'mechanical' error other than errors in data input from, for example, tax slips.
 

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unrolling of a ccpc stock (mostly in an rrsp) after said company's stock being 100% bought up.

payment for the stock did not all happen at once.

2 rounds of escrow releases

withholding over disputed pending ongoing insurance litigation.

2 years after the buy out my final capital gain on the non rrsp held share is still in flux.
 

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A more complicated, exotic setup than most .... and likely less easy to trace down the changes/reasons for them than my simple situation.


Cheers
 
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