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).
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'.
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.
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.
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.
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.
A more complicated, exotic setup than most .... and likely less easy to trace down the changes/reasons for them than my simple situation.
Cheers
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Related Threads
?
?
?
?
?
Canadian Money Forum
684.7K posts
166.2K members
Since 2009
A forum community dedicated to Canadian personal finance enthusiasts. Come join the discussion about investing, stock portfolios, equities, frugality, real estate, market trading, taxation, retirement, and more!