A self-employed worker (a surveyor working on “lumpy” jobs), reports income on an accrual basis in his 2010 taxation year that is not actually paid to him and reported on T4A slips by the payor until 2011. How, can an erroneous assessment of him for “failure” to report the income in his 2011 return be avoided?
All tax returns are reconciled with the slips issued by third parties. If there is a discrepancy between the income reported by a taxpayer and the income reported by a third party, the CRA may contact the taxpayer or the taxpayer’s authorized representative by mail or telephone for clarification.
If the CRA determines that an adjustment is necessary as a result of that review, a notice of reassessment is sent to the taxpayer.
Where we are unable to determine if the income has been correctly reported, we ask our staff to contact the taxpayer or the taxpayer’s authorized representative for further information.