Importance of previous years NofA

As a tax preparers we usually ask the client to bring CRA Notice of Assessment for the last filed tax year. Here is the story why…

The client has been filing taxes for years and never brought the Notice of assessments. Last year,  he finally found 2013 Notice of assessment and handed over to us. What we discovered that he had over $60,000 in non-capital losses available for carry forward. The Notice of assessment does not state the year they’ve been generated. Client called CRA and confirmed that 2006 year was the year the return was filed with losses for the first time.

We took a chance and prepared and filed T1 adjustments requesting application of losses against the income 10 years back ( this would have generated a refund of over $8000 to  the taxpayer). It took a time for CRA to reassess 2013 and 2012 ( only 3 years back was allowed by CRA)  tax returns and issue refund but other years were not covered under Taxpayer Relief provision in this case. So, in the year of 2016 the losses will expire as they only have 10 years of life. Now there are only two years to use them against the income. Hopefully there will be sufficient income for this purpose…..

This illustration shows how important it is to bring all requested pieces of information. The information that can work for your own good.

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