It's not April but Revenue Canada is busy. Throughout the summer the Winnipeg Taxation Centre has been spitting out audit letters to randomly selected taxpayers. These letters request proof of residency and/or receipts to support vacation travel expenses. Over the past few years, these cryptic letters have continually improved in relevance and clarity. To a point. For example, for 1995, in support of the residency deduction, you need a letter from your employer stating the duration and dates of your employment, the dates and places of employment and the amount of non-taxable benefits you received for board and lodging. Why is all this information needed? I don't know. What non-taxable room and board is Revenue Canada referring to? It turned out that it meant free room and board received if you had work at a special work site. This is where it gets galling. This exact information is asked for on line 614 of the NRD claim form (T2222). In addition, your employer has to report this non-taxable amount as a footnote on your T4 -- if you received it. Why does Revenue Canada need further collaborative information from your employer? This is disturbing but it's possible the audit section that designed the letter is unaware the information is already asked for on the T2222 form and provided for on the T4. I pointed this out to a Revenue Canada officer over the phone. She agreed the question seemed redundant. But she excused the irrelevance by explaining the letter was computer generated. Her reasoning was so profound I didn't have the heart to suggest perhaps someone had put the information on the computer first. If you have received such a letter, simply submit the completed T2222, T4 and proof of residence such as a property tax notice or home insurance (for homeowners), or rental agreement (for renters). Don't inconvenience yourself or your employer by asking for a letter regarding dates, places and non-taxable benefits. (Andy Wong is a partner at the accounting firm of Wowk, Wong & Co. in Yellowknife) |