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How do you input a note or memo to CRA on a T1 return?

Hi Folks,

Does anyone know if and how you can input a note or memo on a T1 personal tax return for transmission to CRA?

I am using TaxCycle software to prepare and efile the return, but need to explain something to CRA.

Thanks

The CRA computers are not human; they only read what’s inside the boxes or in the keying summary. Nobody reads notes.

I can appreciate that.

Given that, is there any way to explain why the numbers on a tax slip are different from the numbers you are using?

@pfarmer

The Attach memo function (F8) in TaxCycle is for internal use only and the memo content is not submitted to the CRA along with the T1 return. So, the short answer to your original question is No.

Steven

Given that the taxpayer is required to report exactly the numbers on the tax slip, there is nothing that needs separate explaining in a properly completed tax return.

If a slip is incorrect, the taxpayer needs to approach the slip issuer about correcting it and issuing an amended slip.

What Joe said.

IF the issuer is actually incorrect, and IF the issuer won’t fix the problem, you will likely have to take one of two approaches (I’ve used both, depending on the situation):

  • wait for the return to be assessed and file a Notice of Objection
  • file with your own numbers, wait for CRA to run their “matching” program (typically in August-September) and when they reassess, contact them or file a Notice of Objection at that time

Then be prepared to show why the slip is incorrect. (It does occur, but the only time I have been unable to get the slips changed is with “employers” who submit T4As for people who are actually “employees” and should have been T4ed and we end up with a CPP/EI Determination, or there is an actual calculation error and the (usually) employer refuses to fix it.)

You need to get the taxpayer to ask the slip preparer to correct the slip. CRA tends to accept slips at face value and if the originator of the slip does not change it, you have limited options.

  1. File the return with the data on the slip (as CRA will change it to that anyway) Once the notice of assessment has been issued:
  • Prepare a letter which includes the steps taken to resolve the issue with the slip’s preparer.
  • Complete a T1ADJ.
  • Organize the supporting documentation for the requested change.
  • (Be sure you retain a file copy of ALL documents.)
  • Mail or fax the letter, T1ADJ plus the supporting documents to CRA.
  • If you do not receive a notice of reassessment within 90 days, complete and submit a Notice of Objection.
  • If that does not get the desired results, you and the taxpayer will have to decide if it’s worth going to tax court.
  1. File the return with the contents of the slip as provided and avoid the battle.

  2. File the return your way and accept CRA’s results, again avoiding the battle.

@pfarmer

Intuit ProFile has the capability to add a very brief note on the T1 Jacket at the top right hand corner of the first page and under the signature line.

TaxCycle does not seem to have this capability. I add this information when I create the PDF by adding text in the same areas. This is meant for very limited use. This information can not be transmitted by eFile or ReFile. In those instances, only the keying fields are transmitted. You can verify the content of the keying fields in T1 Condensed an on the Efile Worksheet.

In some instances notes are both used and recommended. These are limited to paper filed returns sent via mail, fax, or submit documents. Via submit documents they become part of paperless routing system. Via mail or fax they go into the regular processing queue and can be missed unless clearly specified. If you are really unsure where it needs to go then send it attention T1 Specialty Services unless otherwise directed.

WHEN & HOW I USE NOTES ON T1 JACKET
This is based on 21 years of professional tax preparation experience, recommendations by others, and one season at CRA. This is not to be considered as professional advice. Some of these workflows have changed in recent years and can change at any time without notice by CRA. Call CRA and speak with an advanced queue or call back agent to confirm the routing.

I add notes to paper filed tax returns for routing and other brief information and not for more complex items. In the case of more complex instructions I paper file and address as required to a special processing unit as listed below, or, to regular assessment if the return is past due by greater than three years.

In the past and in the case of paper-filed returns we were told by CRA assessment to note on the T1 Jacket at the top of page 1 and on the signature page the following:

  1. Demand to file
    Demand to File - individual routing code or as instructed.

  2. Greater than 3 years past due
    “Filed under Taxpayer Relief & Fairness to receive refunds and benefits for the maximum allowable time period up to 10 years.”

  3. T1 Deceased
    “Deceased Returns”

  4. Immigrant/ Emigrant
    “ITSO” International Tax Services Office
    This has changed recently.

Call CRA and speak with an advanced queue or call back agent to confirm the routing.

Anything other this information I submit using one of the following:

  1. T1 Adj

  2. T1 Specialty Services - cover letter, details, reconciliations attached.

  3. A specific person, location, or processing unit

Just below the client name, (see red box) you can toggle ‘Yes/No’.

Add your note under ‘Type a heading here’. (Second red box)

Not sure if this is included when you e-file.

Thanks.
I was thinking that the memo fields might be for internal use only and didn’t get sent to CRA.

Cheers,
Paul

@pfarmer You are right, the memo in that field is internal use only and is not transmitted to the CRA.

Steven

Thanks Joe.

We will be requesting an amended T5008 slip.
The “disposition” was into a Trust, which is not a taxable event if transferred at cost (which is the case).
It’s too bad we can’t explain this to CRA in some way during their initial processing.

Cheers,
Paul

Thanks Dominique.

The “disposition” is a transfer into a trust at cost (not a taxable event). In the past no T5008 slips were issued for these transfers.

Cheers,
Paul

Thanks.

I expect we’ll have some explaining to do with CRA post assessing.
Hopefully we can get an amended T5008 slip.

Cheers,
Paul

Thanks Helga.

We’ll probably be trying to sort this out post assessment as I doubt we would get ann amended T5008 slip in time for filing.

Cheers,
Paul

Thanks Helga,

It’s worth a shot.
I’ll give it a try. :slight_smile:

Cheers,
Paul

However, it is still Capital Property, is it not? and it was still Disposed of by the individual, was it not?

"It’s too bad we can’t explain this to CRA in some way during their initial…"

I don’t see why it would not be properly “explained” to CRA in the normal manner by reporting all Capital Dispositions on Schedule 3, as required…

Unless the slip issuer is shut down with COVID, there should be no problem ascertaining or obtaining a correct version of your slip.