I have a question regarding Sch 141 in T2. There are some new questions added by the CRA in this schedule. The question is:
Part 1: Information on the person primarily involved with the financial information
- Can you identify the person* specified in the heading of Part 1?..Yes/No
What should you select if you are just preparing the tax return for the client with a few adjusting entries? Bookkeeping is done by the client. What exactly does the word “identify” mean in the heading?
Your help is really appreciated. Thank you
great question. i have wondering this as well.
i prepare financial statements, adjusting entries and tax returns -
Not sure what the issue is. The question is: can you (the signer of the document) ID the person “primarily involved with the financial information”?
The return is entitled the General Index of Financial Information (GIFI) - Additional Information.
So the “primarily involved with” relates to the financial information provided in the GIFI as defiined in the asterisked portion below (ie 50% or more).
Yes. It’s stupid, but CRA was never known for being smart.
(I’ll admit I had to read the whole thing several times to make sure I was interpreting it correctly when I first saw it…and it is highly ambiguous as to what one’s involvement is if just providing financials and others are doing all the base work. One could easily argue that a company that spent thousands of hours on bookkeeping is >50% responsible and you, as the accountant, only spent 10 hours assembling it…)
It means can you identify the person primarily involved with the financial data to which income tax is ultimately being calculated on.
Part 1 - Information on the person primarily involved with the financial information
The schedule also cites examples;
- A person primarily involved with the financial information is a person who has more than a 50% involvement in preparing the financial information that the T2 return is based on. For example, if three persons prepared the financial information by doing respectively 30%, 30%, and 40% of the work, answer no at line 111. If they did respectively 10%, 20%, and 70% of the work, answer yes at line 111 and complete part ! by referring only to the third person.
Clear as mud?
Without saying this is a good or bad thing, I’m guessing it’s the CRA’s way of trying to figure out whether the majority of the work actually done on the file was performed by a designated accountant or not. In typical government fashion they just made a mess of the form and made it more confusing.
hi ayisha_f- I had the same question and just saw your post…
So what did you end up selecting for a client where bookeeping is done by the client and you just did the tax return?
Im finding this update to the schedule so confusing…