The Gateway:  Maximizing the Impact of the Disability Tax Credit

In addition to reducing income tax through a non-refundable credit, the Disability Tax Credit (DTC) serves as a gateway to a wide range of additional tax benefits and government programs. Eligibility for the DTC can unlock enhanced credits, financial supplements, and long-term savings opportunities that go well beyond the tax return. Understanding how the DTC connects to these broader supports is essential for maximizing financial stability—both for individuals living with disabilities and the family members who support them.  Unfortunately, many taxpayers miss this credit and their tax and financial advisors can certainly help when this happens.

Facebook's recent public offering captured the dreams of many, who ó upon seeing imagination and innovation translate into riches ó enthusiastically invested. By the end of its first week of trading, however, it was clear it takes a strong stomach to play in today's volatile markets. Yet, if you are to avoid the eroding effects of inflation and future taxes on your wealth, you need to invest in equities. That means managing risk ó and embarking on your investment journey with a strategic plan firmly in hand. There is no doubt that, given the global financial crisis and the unprecedented volatility of global markets in recent years, we are in uncharted waters. Navigating the many hazards requires discipline and skill ó and a plan. That's why the theme of this year's Distinguished Advisor Conference (DAC) is Navigation: Charting a New Financial Course. It is all about managing risk by planning. An annual event from Knowledge Bureau, DAC focuses on educating financial advisors from all specialties in the most recent trends in and solutions for sustainable wealth management. This year risk management is the focus and an outstanding lineup of knowledgeable speakers will address the elements you should consider when charting your course. (To view the preliminary agenda for the conference, click here.) For example, Patricia Croft, an independent economist whose area of expertise is global macro economic analysis, will make the case that re-entry into the markets is necessary to make progress in building wealth. It is understandable, says Croft, a Day 1 speaker, that shell-shocked investors, weary of the financial crisis, should be extremely shy of equities. Croft, the president of Croft Consulting, will examine the global economic environment and its implications for Canadians' asset-allocation strategies. Voted one of the top economists in Canada, Croft is especially bullish on the Canadian dollar and will explain why. It's Your Money. Your Life. Investment risk takes many forms: political, economic, legal, tax, security, to name just a few. Successful captains set course with a plan that takes into account the anticipated risks before steering their ships into rough seas. For investors and their advisors, that makes risk management a key element in joint decision-making. Evelyn Jacks is president of Knowledge Bureau and founder of the Distinguished Advisor Conference, now in its ninth year. This annual event attracts hundreds of top advisors from across Canada to discuss the most recent trends in economics, tax, investment, retirement and estate planning. Educational Resource: Distinguished Advisor Conference and Elements of Real Wealth Management Course.  

How you structure your investment portfolio will determine how well you sleep at night and no one knows that better than Scott Mackenzie, president of Morningstar Canada. On Monday, Nov. 12, Mackenzie will take to the stage at Knowledge Bureau's Distinguished Advisor Conference (DAC) to discuss "Building portfolios to navigate post-crisis waters.î "A well-constructed portfolio will take into account not only macro economic events but also individual economic events,î says Evelyn Jacks, president of Knowledge Bureau and founder of DAC. "A well-constructed portfolio will reflect your reaction to risk and meet your long-term needs, making it a crucial part of your wealth-management strategy.î This year's DAC takes place Nov. 11-14 in Naples, Florida. Mackenzie, who has more than 20 years experience evaluating the performance of investments, joins a roster of knowledgeable and well-known speakers. (To view the preliminary agenda for the conference, click here.) In his session, Mackenzie will examine current research around asset allocation and discuss how that applies to investment selection in an environment of ongoing financial crises, post-2008. Conference attendees will learn what works ó and what does not work ó in constructing a resilient portfolio. "According to the World Economic Outlook,î adds Jacks, "the global recovery is threatened by intensifying strains in the euro area; growth prospects have dimmed and downside risks have escalated. That makes portfolio construction a crucial consideration.î To register for DAC call 1-866-953-4769 or download a registration form and fax it to 1-866-953-4762.

New on the Canada Revenue Agency (CRA) website is the C-100. This circular explains how a corporation, which is insolvent, can get its GST/HST refunds without filing a corporate income tax return. The three-part circular explains the legislative framework, the requirements for having the corporate tax return waived and the process for redress, if necessary.Legislation: Subsections 229(2), 230(2), and 296(7) and section 77 of the Excise Tax Act provide that the CRA cannot release a refund or rebate to a taxpayer if that taxpayer has not filed all required tax returns. But the Income Tax Act does give the CRA some leeway in administering the tax system fairly and reasonably. That means, in some circumstances, an insolvent company can apply to have the requirement to file a corporate income tax return waived. Guidelines: If the CRA is satisfied that an insolvency practitioner cannot file a corporate income tax return because of that taxpayer's circumstances, then the CRA may provide relief from the requirement to file. Subsection 220(2.1) empowers the CRA to decide whether to waive the requirement to file a prescribed form, receipt or other document required under the Act. The IC-100 gives the following example of when a request for a waiver will be approved: "Generally, a request for a waiver will be approved when, because of circumstances beyond the insolvency practitioner's control, insufficient books and records are available to prepare the corporate income tax return(s) that are required from the taxpayer.î The CRA stresses that this route is not to be used by insolvency practitioners as a way to avoid their compliance responsibilities.To make a request, an insolvency practitioner must fill out Form RC342, Request by an Insolvency Practitioner for a Waiver of the Requirement to File a T2 Corporation Income Tax Return, and send it to the Regional Intake Centre for Insolvency (RICI) serving his or her area. The information required by the CRA to make a successful application can be found on this form, as can the addresses of RICI offices. The CRA will consider the taxpayer's history of compliance, the culpability of the taxpayer for the situation in which it now finds itself, and any other relevant criteria. Redress: If the CRA denies your request, your only redress will be proving the CRA did not consider the true merits of the application and that there was an element of prejudice or bias. This is a serious assertion; thus, a second review is rare. In the event that it does occur, however, CRA officials who were not involved in the initial application will review the subsequent application for relief. Insolvency practitioners can also apply for judicial review of a CRA decision to the Federal Court pursuant to Section 18.1 of the Federal Courts Act. This application must be made within 30 days of the date the decision was first received by the insolvency practitioner and must include the completed Form 301, Notice of Application. It is imperative to note, however, that judicial review is a last resort for administrative decisions. Therefore, courts are reluctant to engage in their own review unless the administrative course has been exhausted, that is, insolvency practitioners have asked for a second review by the CRA. Upon review by the court, the court will not substitute its decision, but will refer the matter back to the CRA for reconsideration. Greer Jacks is updating jurisprudence in the EverGreen Explanatory Notes, an online research library of assistance to tax and financial professionals in working with their clients.   Additional Educational Resources: EverGreen Explanatory Notes and Introduction to Corporate Tax Preparation.  

If you are an unincorporated small-business owner rushing to make your June 15 tax-filing deadline, or the shareholder of a corporation, you may be interested in several "red tapeî reduction initiatives the Canada Revenue Agency (CRA) has introduced. The goal is to make it easier for you to file to and communicate with the CRA using the "My Business Accountî portal. But remember: in the working partnership between you and the CRA, you still have important responsibilities, despite new online features. The secure "My Business Accountî portal features a new landing page which allows you to make online enquiries (the CRA will provide a written response within 10 days and it stands behind that promise), file GST/HST returns and make or transfer payments. As well, the CRA will provide detailed reports on corporate balances and allow you to calculate instalments and payroll deductions. Quebec-based consultant Christian Belanger ó who is giving a presentation at the Knowledge Bureau's Audit Defence Workshop at the National Club in Toronto on Monday, May 28,  ó says Canadian companies and their advisors should periodically review the possibility that money is lying idle in corporate tax instalment accounts. Belanger has written a guide to assist in the recovery of funds. The CRA's online enhancements will help businesses monitor possible overpayments. In the end, however, a successful relationship with CRA is all about the orderly retrieval of the documents supporting the numbers on your tax returns. From an audit perspective, the onus of proof is on you to ensure the hard facts match what's happening online. It is also up to you to ensure that you are paying the correct amount of taxes. In an electronic world, when the CRA requests an audit, the need to produce relevant backup documentation is immediate. The fact that we are doing so much more online muddies the retrieval procedures for some ó and makes reviewing your documentation storage and retrieval process crucial. Remember, there is a higher probability that business owners, commissioned salespeople claiming auto or other expenses, and taxpayers claiming discretionary expenditures such as childcare, moving expenses, donations or medical expenses will be audited. It's Your Money. Your Life. Convenient new online services for businesses will help the CRA streamline its business operations, improve review and response times, and save money. Be sure you understand the effect of these changes on your responsibilities as a taxpayer, to make sure it works in your favour, too. Evelyn Jacks is president of the Knowledge Bureau. Join us at the Audit Defence Workshop May 28 in Toronto, 29th in Winnipeg and 30th in Vancouver.  To enrol call 1-866-953-4769.

Knowledgeable and respected financial author Gordon Pape will take to the stage at the Distinguished Advisor Conference (DAC) in Naples, Florida, Nov. 11-14, 2012. On Monday, Nov. 12, Pape, the editor and publisher of the Internet Wealth Builder will examine the investment outlook for 2012-2013 and link macro economic trends to investment strategy. He will discuss the place for stocks, bonds, commodities and currencies in your portfolio and disclose his top picks for 2013. "[Pape] is arguably the best-known and best-selling business author in the country,î Quill and Quire magazine has said, "thanks primarily to a knack for delivering expert advice in a personal, plain-spoken way and an intuitiveness for what his readership wants.î Adds Knowledge Bureau President Evelyn Jacks: "Gordon brings to DAC an in-depth understanding of the current national and international situation as it relates to investing. What's more, his recommendations will be useful to advisors who are helping clients structure their portfolios.î Pape is also editor and publisher of The Income Investor and Mutual Funds Update. His best-selling books include The Ultimate TFSA Guide, 6 Steps to $1 Million, Get Control of Your Money and Retiring Wealthy in the 21st Century. He is a frequent guest on radio and television programs across Canada. To download the agenda of DAC, click here .  

No one is safe from fraud, it seems. The Canada Revenue Agency (CRA) is warning Canadians is be careful of emails, voice mails, even mail claiming to be from the CRA. These sophisticated and very believable "phishingî expeditions are after your personal information. It pays to be vigilant. So, what should you be watching for? Invariably, says the CRA, these communications claim to be offering a refund or a benefit payment. To get your cash, however, you need to identify yourself by giving your social insurance number (SIN) and provide credit card, bank account and passport numbers. The fraudsters seem to be well aware that when offered money ó especially from the CRA ó Canadians let down their guard. Another scam claims to be investigating accusations of tax evasion. Playing off taxpayers' fear of the CRA, an official-looking communication asks the recipient to go to the website via the provided link for more information. To "check in,î the recipient is asked personal information. (For examples of fraudulent communications, click here.) The CRA suggests that, when faced with any communication claiming to be from the CRA, you ask yourself the following questions: ï Am I expecting additional money from the CRA? ï Does this sound too good to be true? ï Is the requester asking for information I would not include with my tax return? ï Is the requester asking for information I know the CRA already has on file for me? ï How did the requester get my email address? ï Am I confident I know who is asking for the information? If you wish to verify the authenticity of a telephone number left on your voicemail, contact the CRA by using the telephone numbers listed on the CRA website. For business-related calls, contact 1-800-959-5525 and for individual concerns, contact 1-800-959-8281. It pays to be careful; don't be taken in by communications claiming to be from the CRA.   Additional Educational Resource: EverGreen Explanatory Notes