Taxpayer T4A slip not matching information on CRA rep a client

Tax Topics
1

Taxpayer submitted a T4A slip not matching with CRA rep a client slip.

  • Taxpayer slip: amount in box 34

  • CRA slip: slightly higher amount in box 34 and same amount in box 32

How have others approached similar situations?

2

Your client needs to go back to the issuer and ask if there is an Amended slip coming to him/her. Looks like CRA either got an new slip, or there is an amendment to be posted at CRA end.

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Check the CRA’s file to see if the slip is ORIGINAL or AMENDED. You can see this in the list of T4A slips (in your case). You will also get the dates that the CRA posted that slip.

From there, you can determine if there have been changes that your client isn’t aware of.

Also, the CRA will consider their T4A slips to be definitive. If your client and the CRA’s slips both indicate ORIGINAL, then the CRA will take their slip. (They will accept an AMENDED T4A slip, especially if it is accompanied with a cover letter explaining the date that the AMENDED T4A slip was issued.There are too many cases where the issuer will just give the taxpayer the AMENDED slip as they will be charged a penalty by the CRA for issuing the slip late.)

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Thank you @TimParris & @dklassencga. I greatly appreciate your replies and wish you both a wonderful weekend!

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@dklassencga The taxpayer has sent me two T4A’s the original and amended. I believe you are correct - there is an amendment to be posted at CRA end.

@TimParris After checking the CRA’s file I see it’s the original. Currently, the client has provided the amended slip but it has not been posted to the CRA.

To confirm, I will use the amended slip. Is the issuer responsible for providing the cover letter?

6

In this case, you don’t need the cover letter since you have traceable events. Given that the revised amounts are lower, I suggest filing the adjustment on paper with the original and the amended, photocopied to the back of the adjustment. In your description, cite the amended slips that are photocopied to the the back of the adjustment.

Yes, paper will take longer, but it reduces your workload and reduces the chance that the CRA will deny the adjustment.

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My apologies to add to this confusing situation.

After posting my original post the Taxpayer sent another two T4A’s to me (another original and an amended):

I am not sure how two orginals and an amendend slip were all created from the same issuer for the same taxpayer.

To summarize I have three slips:

  • T4A Orginal (does not match CRA) BOX 34 $2700.00
  • T4A Orginal (matches CRA) BOX 32 & 34 $3100.00
  • T4A Amended significantly higher amount BOX 34 $12,000.00

What is the best way to proceed?

8

I am sorry for adding to the confusion as I did not bother reading the box numbers until now.

I have presumed that you wish to file adjustments for these and have answered your questions based on that fact. Instead, I think that you need to back-track a little to these questions:

  • Have you tried to see the difference in the tax return?
  • What is the impact of these changes?
  • What is the likelihood that the CRA will catch this correction themselves before the next tax return is filed?
  • Will the CRA apply a penalty for not disclosing this change vs you (or taxpayer) disclosing this change?
  • What is the financial cost vs taxpayer aggravation in fixing vs not fixing?

The answers to these questions will help you answer your question and determine if an adjustment is warranted and appropriate.

I am not answering these questions as they are your responsibility as the person preparing the tax return. I’ve provided you sufficient direction to figure the answers.

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9

Since you have an amended T4A, I would use the amounts on that slip. It is the issuer’s responsibility to update CRA regarding the amended slip. There could be a delay at either the issuer’s or CRA’s end due to the pandemic closures (depending on when the amended slip was issued). (I’m assuming a small issuer, since the larger issuer’s wouldn’t have this type of error.)

Box 34 on a T4A slip represents a Pension Adjustment. This amount doesn’t affect anything on the 2019 tax return, other than the calculation of the taxpayer’s 2020 RRSP Contribution Limit.

If CRA doesn’t have the amended slip in their system when your client’s tax return is assessed, they may request a copy of the amended slip from you (or the taxpayer) and then contact the issuer.

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@NiceGuy
I would go to the CRA website to see how many of the T4A’s are still in force. You will need to determine if

  1. the original T4A was/or should have been canceled and replaced by an amended slip.
  2. one of the T4A amended slips was/or should have been canceled and replaced by the final amended slip. The processing dates should give you a hint.
  3. for internal processing reasons two T4A’s were valid. Sometimes one issuer does send multiple T4A’s for internal processing reasons. For example sometimes there are company reorganizations and/or one company is bought by another company. In these cases there may be two stub periods in one calendar year.

Sometimes the issuer forgets to cancel the T4A’s which were issued in error and subsequently amended.

Sometimes CRA amends a slip as a result of a CRA Trust Examiner Audit and forgets to cancel the original and/or a client issued amended slip.

You will need to verify with both CRA and through the client with issuer to know for certain which should be valid.

Technically you should be reporting all slips on file. Strategically you may wish to write CRA T1 Specialty Services and CRA Employer Services to valid, question, or object to a duplicate slip.

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11

Thank you all very much for your replies. I greatly appreciate it.