I need to late file 45(2) and have read a number of relevant posts on here but did not find anything specific to my case. Hope you can help!
I plan to late file 45(2) along with Taxpayer Relief Request (RC4288) to waive penalty. I read some advice by an AI generator that I must calculate the penalty and pay up front. Then get a receipt of payment and file it along with the 45(2) election. Did you all do this, or do you wait for CRA to confirm the penalty amount and then you pay after?
My situation is a bit complicated, so I can’t definitively calculate the exact amount.
The penalties and interest in arrears are well published. Just add the years right? One is for penaties and one is for interest. Doesn’t it have an example of $250+250?
I hear CRA uses AI to reject too. It can get complicated.
Sometimes clients are a pain. It does keep me busy.
I believe the default assessment for late 45(2) elections (given CRA does want to impose a late filing penalty) is 162(7) whereby no other subsection applies; meaning it could be anywhere between $25 and $2,500. It’s not cumulative.
That sounds like the T1135 no filing/late penalty.
CRA does not want? Their actions seems to be imposing late penalites, then you have interest, then the demand letter arrives, eventually the collection department will call, eventually a payment proposal will be suggest, if not they garnish and perhaps take you to ITC.
I had a potential client who would not pay me a inital fee. Silly me to tell her the trutht that to unravel of situation it would cost $5,000 to 10,000. I didn’t tell her that at that time she had less than 2 month to reply to the minister. A $33,000 profit (not tax) in a corporate return not filed ended up going to the the ITC, got certified and a $230,000 lien put on the house she got her name on with her husband. She thought she strucked gold getting married and added her name onto the deed.
She asked around for here and there for so many years. Asked a lawyer and she never paid up. I was in her CRA for the corp and there are lots of pentalies and interest in arrears. That was for the Corporate tax part. the GST/HST machine just keeps running.
162(7) is the catchall subsection that is deferred to where no other subsection applies. CRA (actually the minister) holds the right to assess penalties on Section 45 elections, as they are not filing obligations.
I don’t really like thses so call late elections, because you are going to find out, something was done in the past at a later time, CRA, most the time, would allow late elections if they are immaterial. Few times I did, found there were incomplete information, CRA reviewed it and nobody followed up, clients, they either didn’t care, didn’t know, or knowing, didn’t want to pay for fees for professional services, and they refused to give all relevant information when someone taking over. They always said, oh, that did happen etc… when questioned at a later time