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36 - Apple Valley Scoop - June 2010Do not fear mail from theCanada Revenue AgencyIgnoring a brown envelope from the CanadaRevenue Agency may be tempting but it is not agood strategy.Opening the letter will probablymake life much easier.A former colleague of mine has his own personalstory of why you need to follow up on mail from theCanada Revenue Agency. This senior tax professionalreceived a request from the CRA a couple of yearsago asking for copies of signed T2202A Forms fromhis daughters. They were both in university and mycolleague had claimed tuition transfer credits.Unfortunately, he lost track of the deadline and failedto send the signed forms to the CRA within the 30 dayperiod. The CRA re-assessed his return and excludedthe tuition transfer because he had failed to providethe proper paperwork. He had to pay the outstandingamount and then file an adjustment to claim the tuitiontransfer amount with the forms attached.Though we had a chuckle about his situation –especially since he had not missed any of his clientsubmission deadlines – it is an important lessonabout responding to CRA requests for information.If documents are requested, you need to make sureyou send them in on time. It does not mean you areabout to be audited. It means the CRA wants you toprovide proof that a claim is valid; once you providethe paperwork, the claim is confirmed. These randomchecks are just one way the CRA can verify returns.There are some credits that draw more attention thanothers. We are expecting to see a number of reviewsinvolving the Home Renovation Tax Credit. Movingexpenses and tuition transfers are also more likely to bechecked. Again, as long as you have your receipts, youshould be able to satisfy the CRA request.If you do miss a deadline like my former colleaguedid, it will be noted in your compliance history. Yourcompliance history can also play a role in whether ornot your return is reviewed. If you have a history of notbeing able to substantiate your claims or not respondingto requests to do so, it is more likely your return will bereviewed.There is no way to guarantee that your return will notbe reviewed or re-assessed. Self-employed individualsare more likely to be reviewed, so it is important tokeep good receipts and records to make the processeasier if it does happen. Business expenses need to bereasonable and you need to have some expectation ofrevenue. Your business cannot be just a hobby and youcannot claim losses indefinitely. If the CRA does disallowsome of your business expenses, you will receive a taxbill for the adjusted amount, as well as accrued interestfrom May 1.So open every letter you receive from the CRA,whether you want to read it or not. Dealing with arequest for documentation right away will mean fewerheadaches later. And if you have been honest andforthright when preparing your tax return, you havenothing to fear from a CRA request.A tax professional at H&R Block can talk aboutother credits and deductions that may affect you.To find the office nearest you visit www.hrblock.caor call us atThis article provides only an overview of the regulations in forceat the date of publication, and no action should be taken withoutconsulting the detailed legislation or seeking professional advice.Therefore no responsibility for loss occasioned by any person actingor refraining from action as a result of the material contained in thisbulletin can be accepted by H&R Block Canada, Inc.8748 Commercial St,New Minas • 681-2201Our Congratulationsto R.D Chisholm Ltd.and the family on their85th AnniversaryR. D. Chisholm Stationery and Books Ltd iscelebrating their 85th year in business with ananniversary sale.Chisholm’s was started in 1925 by Roy D.Chisholm. It is now owned and operated byhis grandson, Eric Lockhart, Eric’s wife Bonnie,and their sons, Ian and Mike.Chisholm’s has made many changes overthe years, including adding a retail postaloutlet in 1970, joining and office supplybuying group in 1996 and recently expandingtheir toy section to include Calico Critters,Melissa and Doug, Lego, Thomas and FriendsWooden Railway and more games and puzzles.Look for great specials in books, giftware,china mugs, toys and lots more.The sale runs from June 16th through toJune 30th.Make sure you take some time to drop intoChisholm’s to congratulate the staff and familyon their 85 years in business.791 Central Ave,Greenwood • 765-8465234 Water St, Suite 2,Windsor • 798-5539R.D. CHISHOLM LTD.Office Supplies - Gifts - BooksCards - Toys & GamesCome Celebrate our 85th Anniversary.Thomas & Friends Wooden Railway - 20-35% Off Retail PriceMelissa and Doug Wooden Toys - Buy 1 get 1 - 50% OffCalico Critters - 20% Off Retail PriceAll Lego - 15% Off Retail PriceAll other Toys, Puzzles and Games 20% Off Regular PricesWillow Tree, Sarah’s Angels - 20% OffSidewalk Sale - Assorted Giftware Items Up to 75% OffSale Runs June 16th - June 30th, 2010.R.D. CHISHOLM LTD.Office Supplies - Gifts - BooksCards - Toys & Games25 Webster St Kentville NS678-4661Fax: 678-9348