Filing (very) late income taxes in QC, Canada

February 7, 2016 6:49 AM

For pretty terrible (and irrelevant) reasons, I haven't filed my taxes in (I think) 5 years. Now I really really need to do them, but I don't know how to start and I get panicky just thinking about the insurmountable piles of paperwork, potential money owing, and even criminal charges. I'm in QC, Canada. If anyone else has dealt with late filing or voluntary disclosure in Quebec, please help!

I was a student for 3 of those 5 years, but earned money working full time over the last 3 years.
I have T4s from the previous 2 years, and my employers made deductions, but I was freelance before that. I'm not sure if I made the low income cutoff or not. I don't have tax receipts from university either. My papers are not exactly organized.

Researching online, it seems I need to make a voluntary disclosure to the CRA, which requires (or benefits from) consulting a tax lawyer. Though I'm not living in poverty, money is tight and I'm worried about the cost.

Will a lawyer actually make sense of all my taxes and paperwork, or would I need an accountant in addition if I can't organize my taxes on my own? (i can't). I would love someone to just make it all go away.

Do I need a tax lawyer? If so, how do I find a good, cheap one?

Thanks

posted by anonymous to Work & Money (20 answers total)

Do you think you owe significant money? Because it sounds like you don't, and I did the same thing -- was depressed, couldn't cope, ignored taxes -- and eventually I got calls from the governments telling me to file the taxes, and they were all very pleasant and just mailed me all the documents they had and I filled them in and I ended up getting refunds (though probably less than I would have). You can get the receipts from your school usually, the government has copies of all your T4s and everything from banks or investments firms (not school stuff, that's not sent to the federal government electronically), so the only issue is accurately covering your self-employment income.

I don't know how much money you earned, but a voluntary disclosure is usually "I lied on my taxes" not "I just didn't do them".

A tax attorney is probably overkill (unless you have earned a lot more money than you suggest). Get copies of everything, and if you can fill it out yourself, great -- the government corrects minor mistakes -- and if you can't, find a tax preparer, bring in your stuff. You are not going to jail over this, and you probably don't owe a lot of money either.
posted by sockingjay at 7:04 AM on February 7, 2016

If it helps to settle your nerves, if you've paid tuition for the first three years - and I'm pretty sure those deductions carry over year to year if unused - from your description, I'd put better than even odds that the government owes you money, not the other way around.

You can get the tuition receipts from your university, the government has copies of your T4s already, and if you phone the CRA, you'll definitely be talking to somebody pleasant who wants to help you sort this out. Tax attorneys are not for people who aren't sure if they owe the government or the government owes them, and you're not going to jail.

For what it's worth, a lot of people (including myself) have been there. You'll be OK, but get it done. I promise it will be a huge weight off your shoulders to have this behind you.
posted by mhoye at 7:16 AM on February 7, 2016

I am in Ontario not Quebec, but the CRA is the CRA. A friend of mine did not pay taxes for years -- and it got complicated because his common law partner died in one of those years and that changes things. Eventually the government called him and was like "Hey could we do this now" and he was like "Sure yeah." He said that their collections people are VERY nice and incredibly helpful. They want to help you sort this out. They are not angry.

He did not use a tax lawyer to my knowledge.
posted by sadmadglad at 7:17 AM on February 7, 2016

Also! If you do owe them something (and I agree with mhoye that they probably owe you, or it breaks even — tuition rebates help so much at tax time) — they can totally set you up with a payment plan. They are NOT looking to make your life impossible or even difficult.

You're going to be okay. Making that phone call is scary, but the person you talk to is going to be nice. She's going to have most of the documents you're missing, and she will know how to get the rest. She's not going to be angry. She's going to be kind and helpful. She's going to be happy you called.

You can do the thing! It's going to feel so good when it's done.
posted by sadmadglad at 7:22 AM on February 7, 2016

CRA is awesome. Just call them. They are not as punitive as the IRS and will help you get this sorted out. If you do owe interest they will help you set up a payment plan.
posted by warriorqueen at 7:29 AM on February 7, 2016

You may want, though you do not need, a tax accountant to fill out the forms. The going rate is somewhere on the order of $10 per form. Collect all the tax receipts you can find, and any related to your schooling or if you moved more than 100km for work and bring them to the account. Maybe ask around and see if people know someone local at a good rate. My coworkers used H&R block and were happy, but later found cheaper alternatives.
posted by captaincrouton at 7:49 AM on February 7, 2016

I would advise against a tax lawyer. I am in Quebec also and was very late with taxes, and before I could even talk to a tax lawyer – who came recommended by friends – I had to fork over $1600 which I could ill afford. All she ever said to me was "so, you want me to pay your taxes for you?"

If you want a recommendation for a good reliable tax preparer in Montreal please drop me a memail.
posted by zadcat at 8:06 AM on February 7, 2016

In Ontario, not QC, but nthing the advice above.

No lawyer needed. You are not in trouble.

A free option for filing by yourself is StudioTax. I've used this for the last several years. Once you have your receipts/forms lined up, you just plug them in for the given tax year, state your income, etc., and it populates your return.

You can then build subsequent returns based on your data from previous filing years. It makes it pretty damn easy.

It doesn't hurt to have a look at the filing guide for each given year - this will tell you what deductions are available (as suggested above, did you move more than 100km for work in a given tax year, tuition tax credits, etc.).

If you have questions, call CRA - they are helpful and friendly in my experience.

CRA likes to hear from people who want to square up, and you may even be owed refunds in the tax years you'll be filing for if you were a student and your income was relatively low, and you were taxed at source by employers.

As others have said, you have nothing to worry about. Worst case scenario is that you owe them some money, and they're pretty chill about that and will work with you to get it paid.
posted by mandolin conspiracy at 8:46 AM on February 7, 2016

Legally you do not have to file your taxes with the CRA every year Unless you owe money It is highly unlikely you owe any money and in fact can expect some sort of refund for the taxes (employment/sales/etc) you have paid. So, really, not a big deal to the CRA who I will n'th are fantastic and non-judgemental (empathetic even!).

See if you local public library is offering any free tax preparation clinics. it's Goni g to be fine.
posted by saucysault at 8:48 AM on February 7, 2016

Also, regarding filing by yourself - in the event you make an error on your return, or omit a form or receipt, they'll just send you a letter asking you to submit it.

If you have a web of offshore holding companies and bank accounts through which your money is passing, they'll probably take a closer look.

Otherwise, you just get a letter asking you to provide the missing information.

Seriously - that's all that happens if you make a mistake or accidentally leave something out on a Canadian tax return.
posted by mandolin conspiracy at 8:55 AM on February 7, 2016

I did the same thing -- didn't file for a few years and got caught up all at once. I was working so didnt have sweet tuition credits and ended up owing some money in tax and penalties, but it wasn't too much because I was working in a job that deducted taxes from each pay cheque. The actual filing was easy and no one was the least bit judgemental. The CRA people were super nice.
posted by girlpublisher at 9:39 AM on February 7, 2016

CRA also offers free tax clinics, here is a list of the ones in Quebec, this explains what the program is about.
posted by BozoBurgerBonanza at 10:08 AM on February 7, 2016

Since you are in Quebec, you will also have to get in touch with Revenu Quebec, not only CRA. If you contact either, they will help you out.
As a former CRA tax collecter, don't worry about anything...just get your returns filed.
posted by BozoBurgerBonanza at 10:15 AM on February 7, 2016

Last year i filed for the last 8 years. No tax lawyer or special form or whatever. I just did one of those free tax filing programs, printed every year's return out, and mailed the huge box to CRA. It was totally fine. I got a big refund, almost exactly what the tax program told me it'd be. You might too or might owe, depending on your income. Look on your school website for your t4a forms, or call them and ask. Memail me if you want more details.

Also i called CRA at one point for clarification of what i was supposed to do and they were very nice and not angry or judgemental.
posted by randomnity at 1:43 PM on February 7, 2016

This has happened to me. Call the CRA, and explain what's happening. Tell them your timeline to file. Tell them you want to confirm that you have all the correct T4s etc after all this time, and ask them to send you copies of all the paperwork they have received from employers. You don't want to miss out filing some income that they have slips for - they penalties for that can be harsh. Use a free computer program - they are pretty straightforward.
posted by miles1972 at 2:48 PM on February 7, 2016

Revenue Canada really wants to make it as easy as possible for you to come in from the cold. I knew someone who made a voluntary disclosure after many years, and in his case CRA waived all of the penalties and interest owing. I can't quite guarantee this for you, but if you show good faith, they will try to give you a reasonable deal. They want people to know this.

You don't need a tax lawyer just to file for voluntary disclosure only.
You might need a tax lawyer if there is anything unusual about your business.
You do need a decent accountant. It's worth it.
posted by ovvl at 3:34 PM on February 7, 2016

I went through almost precisely this situation (in QC, too!) and agreeing with everyone above that you do not need a tax lawyer, CRA will be very helpful and kind, and you can do this! It will be a bit of a pain, but totally doable. I got all the forms from QC & CRA, and just knocked them out in a weekend. It was annoying, but you will feel so much better once this weight is lifted from your shoulders. And yes, I was so pleasantly surprised at how kind and helpful the tax agencies were with my questions.

I just want to caution that if you were covered by RAMQ for health coverage in Quebec (rather than a private plan), you will owe money on this coverage. I had been a student for most of the years I filed, and mistakenly thought that I would be owed more money than I myself owed... the annual premium for RAMQ ended up costing me a bit, even with my very low income. It won't cost an arm and a leg, but it definitely dipped in significantly into any refunds I received from CRA.
posted by hollypolly at 3:53 PM on February 7, 2016

Just nthing the Revenue Canada is awesome thoughts. We've had two issues, and I was worried to call, but they were great!
Prob one: Mistakenly forgot income from a short term job and called with heart pounding to explain. "Just send us a letter describing the error and stating the additional income". We did. Fixed, no problem.
Got audited due to an unusually large donation, we called with questions, which were easily answered. Submitted what they said we should, easily handled.
I have also called on behalf of students on several occasions; they never ask for personal detail in order to answer questions about rules , policy or best practices, so you can get info anonymously if you are nervous (but really it's not necessary to worry).
posted by chapps at 1:40 AM on February 8, 2016

This happened to me, too, in Ontario. I failed to do my taxes for about 4-5 years. I submitted them through the voluntary disclosure programme (without the help of a tax lawyer, I might add) but was told when they processed them that it hadn't been necessary to do so. There was no penalty, no scolding, no shame. I also got a nice refund on top of it all. No sweat.

If you want it all to go away, a tax accountant might be able to help you sort out your papers, but you'll have to pay for the convenience.
posted by matthewfells at 6:19 AM on February 8, 2016

I just fixed a similar problem, in Montreal. Contact me by memail if you need a recommendation for an accountant.
posted by chrillsicka at 6:08 AM on February 9, 2016