Personal Finance

I hired a new accountant and I think I made a mistake

  • Last Updated:
  • May 4th, 2021 3:57 pm
[OP]
Sr. Member
Jul 2, 2013
707 posts
185 upvotes
Aurora

I hired a new accountant and I think I made a mistake

In 2020 my business was a sole proprietorship and as far as I know, my tax filing due date is April 30. I just checked my CRA personal account and it says that my 2020 tax return was not received.
I already know that I owe about 25k so the interest is going to be huge.
If this accountant forgot to file or files late, can I go after him for the late fee penalty?
19 replies
Deal Addict
Dec 12, 2009
4918 posts
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Toronto
Any amounts owing are due April 30. Your return is due June 15.

I have to wonder who's fault it is for not making the required payment. If you knew you owed about $25K you could have paid it prior to April 30 & avoided penalties & interest. i'm thinking you have to take responsibility for that.

Never fear, once you file they will start looking for installment payments for the current year. The penalties & interest next year won't be as bad.
Member
Jun 6, 2014
267 posts
104 upvotes
Toronto, ON
You can make a payment online right now. It should process Monday. You would only be 3 days late, that shouldn't be too bad.
Deal Addict
Dec 12, 2009
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icedtea365 wrote: You can make a payment online right now. It should process Monday. You would only be 3 days late, that shouldn't be too bad.
I looked it up. I erred, there does not appear to be a penalty for late payment only interest. The penalty is for filing late which the OP is not as of yet.
Your suggestion to pay now makes for sound financial advice.

https://www.canada.ca/en/revenue-agency ... lties.html
Deal Fanatic
Jan 19, 2017
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lehmanr wrote: In 2020 my business was a sole proprietorship and as far as I know, my tax filing due date is April 30. I just checked my CRA personal account and it says that my 2020 tax return was not received.
I already know that I owe about 25k so the interest is going to be huge.
If this accountant forgot to file or files late, can I go after him for the late fee penalty?
It is up to you to make sure your tax is filed and to be correct , even an accountant filing for you. There is at least one court case where the accountant made a mistake and the tax court judge said the tax payer is responsible for any mistake on his tax return because tax payer has to sign off for agreeing to let the accountant sending his tax to CRA. The only thing a tax payer can do is to filing civil charge against the accountant. The tax court won’t go after the accountant. You have to pay all penalty and interest charges. It is up to you to get your money back from the accountant.
Deal Expert
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Jan 27, 2004
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T.O. Lotto Captain
ml88888888 wrote: It is up to you to make sure your tax is filed and to be correct , even an accountant filing for you. There is at least one court case where the accountant made a mistake and the tax court judge said the tax payer is responsible for any mistake on his tax return because tax payer has to sign off for agreeing to let the accountant sending his tax to CRA. The only thing a tax payer can do is to filing civil charge against the accountant. The tax court won’t go after the accountant. You have to pay all penalty and interest charges. It is up to you to get your money back from the accountant.
What if you are really dumb with taxes... and you really need to just pay someone to do it for you properly ?
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Jan 19, 2017
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UrbanPoet wrote: What if you are really dumb with taxes... and you really need to just pay someone to do it for you properly ?
I know what you are saying. I am just commenting for his question 'If this accountant forgot to file or files late, can I go after him for the late fee penalty?'.
Deal Expert
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Jan 27, 2004
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T.O. Lotto Captain
ml88888888 wrote: I know what you are saying. I am just commenting for his question 'If this accountant forgot to file or files late, can I go after him for the late fee penalty?'.
I guess just find the accountant with the best recommendation/reputation and hope for the best!
Deal Addict
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Dec 24, 2007
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if the return is filed late and there is penalty and interest take it up with the accountant as any reputable accountant would have E&O insurance that covers these sort of things.
Deal Guru
Dec 5, 2006
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Markham
My tax is simple, so i do by myself. Just a question about hiring an accountant: how does it work? Like accountant just gathers information from you and decide how to maximize tax return, put number in each line , submit and you pay what you owe?

Thanks
Deal Addict
Mar 3, 2018
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smartie wrote: My tax is simple, so i do by myself. Just a question about hiring an accountant: how does it work? Like accountant just gathers information from you and decide how to maximize tax return, put number in each line , submit and you pay what you owe?

Thanks
That is basically it for tax filing. Usually for more complex tax returns like sole proprietors that may also have the accountant do their bookkeeping and payroll too.
Deal Fanatic
Oct 7, 2007
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It may not be palatable but I believe if you OVERPAY your taxes, any interest earned on a credit balance with CRA will offset any interest charges incurred for being late. Not sure about the penalties though. You can also write a letter asking for forgiveness on any penalties and interest but it will be totally at CRA's discretion whether they think your excuses are valid enough to waive any interest or penalties. Personally, I would chalk it all up to learning, take a good read of the CRA guides on deadlines and don't worry too much about it. Stuff happens, it is just part of learning how the deadlines work. Once you go through the guide and understand how it works, you can set up whatever reminders work for you so you don't miss any in the future.
[OP]
Sr. Member
Jul 2, 2013
707 posts
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Aurora
choclover wrote: It may not be palatable but I believe if you OVERPAY your taxes, any interest earned on a credit balance with CRA will offset any interest charges incurred for being late. Not sure about the penalties though. You can also write a letter asking for forgiveness on any penalties and interest but it will be totally at CRA's discretion whether they think your excuses are valid enough to waive any interest or penalties. Personally, I would chalk it all up to learning, take a good read of the CRA guides on deadlines and don't worry too much about it. Stuff happens, it is just part of learning how the deadlines work. Once you go through the guide and understand how it works, you can set up whatever reminders work for you so you don't miss any in the future.
The this is that Im hiring someone do take care of this for me. This is not some basement bookeeper either, hes a chartered accountant. I feel that Ive done everything in my power to file on time (sent my files to him on April 1st) and Im wondering why I would be on the hook for late filing.
I guess its different with accountants and I am learning this very quickly. Ive always been told to find a REALLY GOOD ACCOUNTANT so I asked around and more than half f the people I asked locally recommended this guy.
I just think in regards to filing late, there needs to be some accountability on his part
Deal Fanatic
Jan 19, 2017
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lehmanr wrote: The this is that Im hiring someone do take care of this for me. This is not some basement bookeeper either, hes a chartered accountant. I feel that Ive done everything in my power to file on time (sent my files to him on April 1st) and Im wondering why I would be on the hook for late filing.
I guess its different with accountants and I am learning this very quickly. Ive always been told to find a REALLY GOOD ACCOUNTANT so I asked around and more than half f the people I asked locally recommended this guy.
I just think in regards to filing late, there needs to be some accountability on his part
Have you actually contacted this accountant to find out why your tax has not been filed yet? If you sent your files by snail mail, may be he didn’t receive it. Or may be your file was put in to other people’s file.
Deal Fanatic
Jan 21, 2018
5114 posts
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Vancouver
lehmanr wrote: In 2020 my business was a sole proprietorship and as far as I know, my tax filing due date is April 30. I just checked my CRA personal account and it says that my 2020 tax return was not received.
I already know that I owe about 25k so the interest is going to be huge.
If this accountant forgot to file or files late, can I go after him for the late fee penalty?
You might get more advice in the Small Business forum.

But in general accountants take no responsibility for errors on your tax return. You must sign a waiver saying that you understand that you are solely responsible for reviewing and approving it before it goes to the CRA. Yes, this is ludicrous given that you hired the accountant because it's too complex and time-consuming for you to prepare the tax return, and that's the primary reason you hired them. I'm sure that must have been challenged in court before on the grounds that the error was the accountant's, not the data that was given to them.

You also cannot assume that the accountant will automatically file the tax return on your behalf. It's possible for them to do that with the correct rep authorization, but you must explicitly give them the instruction to do that after you have reviewed and approved the return. It's possible for them to just leave the filing up to you.
Member
Nov 26, 2012
351 posts
354 upvotes
Toronto
lehmanr wrote: The this is that Im hiring someone do take care of this for me. This is not some basement bookeeper either, hes a chartered accountant. I feel that Ive done everything in my power to file on time (sent my files to him on April 1st) and Im wondering why I would be on the hook for late filing.
I guess its different with accountants and I am learning this very quickly. Ive always been told to find a REALLY GOOD ACCOUNTANT so I asked around and more than half f the people I asked locally recommended this guy.
I just think in regards to filing late, there needs to be some accountability on his part
If your accountant is supposed to file for you, please note that he is NOT late on filing. If you are reporting any business income, you (or your CPA) have until June 15th to file. HOWEVER, you have to pay the the taxes owed by April 30th which is usually your responsibility unless your accountant does all your financial transactions (doesn't seem to be the case here).
Sr. Member
May 12, 2003
839 posts
266 upvotes
OP Couple of things here:

- Since you are a sole proprietor, your return is actually due June 15th, so there is no late filing penalty. Only interest on the amount owed.
- Did you know about the taxes that you owe? Did the accountant mention that to you before April 30th? If so, you are on the hook for any interest penalty since you knew and should have made the payment.
- If you did not know, then yes, you should connect with your accountant and ask them to adjust. The interest likely is ~$25-30 for the 3 days so far.
- a CPA/CA insurance would cover any interest payments (mind you no one would make a claim for less than $10,000, and probably would be just happy to adjust their fees for you)
lehmanr wrote: In 2020 my business was a sole proprietorship and as far as I know, my tax filing due date is April 30. I just checked my CRA personal account and it says that my 2020 tax return was not received.
I already know that I owe about 25k so the interest is going to be huge.
If this accountant forgot to file or files late, can I go after him for the late fee penalty?
[OP]
Sr. Member
Jul 2, 2013
707 posts
185 upvotes
Aurora
ssj4_ootaku wrote: OP Couple of things here:

- Since you are a sole proprietor, your return is actually due June 15th, so there is no late filing penalty. Only interest on the amount owed.
- Did you know about the taxes that you owe? Did the accountant mention that to you before April 30th? If so, you are on the hook for any interest penalty since you knew and should have made the payment.
- If you did not know, then yes, you should connect with your accountant and ask them to adjust. The interest likely is ~$25-30 for the 3 days so far.
- a CPA/CA insurance would cover any interest payments (mind you no one would make a claim for less than $10,000, and probably would be just happy to adjust their fees for you)
I've tried to reach out to him by email and phone, he is not getting back to me and it's been 5 days. I know that he is extremely busy this time of year.
I would expect an accountant to prioritize those filing that are anticipated to owe to file before April 30th but Im not an accountant. If I owe say 25k, what is the total I would be paying in interest if he does in fact wait til the last few days to file on June 15th?
Deal Addict
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Aug 18, 2008
3144 posts
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Ottawa
lehmanr wrote: I've tried to reach out to him by email and phone, he is not getting back to me and it's been 5 days. I know that he is extremely busy this time of year.
I would expect an accountant to prioritize those filing that are anticipated to owe to file before April 30th but Im not an accountant. If I owe say 25k, what is the total I would be paying in interest if he does in fact wait til the last few days to file on June 15th?
The date that your accountant files will have no impact on the interest owed for overdue payments.
Your payment is due April 30th. - this is an action that you have to do.
Your tax return needs to be filed by June 15th. - this is an action that your accountant has to do.
Sr. Member
May 12, 2003
839 posts
266 upvotes
I am not sure you're understanding this correctly.

The accountant does NOT have to file your tax return by April 30th. His responsibility is to file it before June 15th.

but YOU must pay your balance due by April 30th. He just has to tell you what the balance due is by April 30th. That's all.

Now if he hasn't told you what that amount is, then sure, you may ask him to adjust your invoice accordingly. But if he has already told you the amount, and you've chosen not to pay that amount, the interest is your responsibility.
lehmanr wrote: I've tried to reach out to him by email and phone, he is not getting back to me and it's been 5 days. I know that he is extremely busy this time of year.
I would expect an accountant to prioritize those filing that are anticipated to owe to file before April 30th but Im not an accountant. If I owe say 25k, what is the total I would be paying in interest if he does in fact wait til the last few days to file on June 15th?

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