Checklist - Best practices for tax preparers to minimize risk
Interview each taxpayer in family group; obtain Identification; Obtain an engagement letter setting out terms of engagement
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Spouse A
Spouse B
Parent
Child
Other
Obtain documentation for prior years returns for each taxpayer
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Last year
Last 3 years
Last 10 years
Other
Obtain approval for My Account access
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T1013 (My Account
RC59 (My Business Account)
Power of Attorney
Will (deceased taxpayer)
Other
Obtain access to My Account and My Business Account
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Level 1
Level 2
Level 3
Other
Enter old years taxes as assessed or re-assessed by CRA into tax software - compare what was filed with documentation on hand - Be aware of possibility that relatives support each other, or expenses and credits are able to be transferred or allocated differently between relatives
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Enter what was assessed or re-assessed per what CRA has on file
Compare to documentation provided by taxpayer (may require calculations for investments, RSP's and TFSA's)
Yes, they agree, do they need adjustment?
No, they do not agree, do they need correction?
Determine course of action (T1Adj, Fairness, Voluntary Disclosure)
Other
Proof carryforwards ( be aware not all are shown on CRA accounts)
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Carry forwards agree
Carry forwards need amending
Other
Take a snapshot to use as a start point for an adjustment
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No adjustment required
Adjustment required
Voluntary disclosure procedure to be initiated
Fairness form RC4288 to be completed
Other
Change taxpayer's returns to amend to what should have been filed instead of what was assessed or reassessed
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Adjust income
Adjust expenses
Adjust credits
Adjust taxes paid
Adjust who claims expenses or credits between relatives
Review for transfers, or split of expenses or credits not previously claimed
Other
Review financial transactions to ensure nothing missed (see Personal Tax Checklist)
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Nothing looks like it was missed, all income and expenses and credits claimed
Something looks like it's been missed
More work required
Other
Review for other gov't programs, benefits, premium reductions, pensions not being claimed that should be
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Federal
Provincial
Seniors
Disability
Infirmity (not the same as disability)
Medical
Other
Prepare T1ADJ for each taxpayer for each year as required
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Not required
If required prepare line by line
Cross reference on each taxpayer's form with SIN # of other taxpayers affected by this adjustment for each year (this is how to be successful at adjustments)
DO NOT WRITE A COVER LETTER - CRA ignores cover letters, so this is how to get the adjustments processed
Other
Prepare a worksheet (spreadsheet) to document the changes so you can check the re-assessments when they are processed
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Spreadsheet by taxpayer (down the side) and by year (across the top)
Change in net income
Change in tax payable
Changes to other benefit programs expected as a result of this change
Other
Review the changes with the taxpayers, get their signature, and a representation letter before submitting the changes
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Everyone reviewed their changes
Everyone had a chance to ask questions
Everyone understood, and signed a representation letter as well as the T1ADJ
Other
Check the re-assessments and the changes to benefit programs
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Everything was re-assessed as requested
Not everything was re-assessed as requested
Follow up instigated to amend or take other action as required
Subsequent adjustments for other government programs initiated, for example, cost of care in a nursing home, Fair Pharmacare, BC Medical Premium Reduction application, and more...anything based on the calculation of net income may require revision!
Other
File current years' returns
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Signed engagement letter on file before work starts
Tax Checklist prepared
Documentation received
Data entered where provided
Calculations performed to determine income (investments, business, rentals, etc.)
Financial transactions reviewed to ensure all income and expenses and credits claimed
Results reviewed and compared to prior periods
Results reviewed with each taxpayer
Taxpayer signs representation letter
Filed after review and signature
Documentation returned or stored as appropriate
Check that they were assessed as filed
Adjusted if not filed as assessed?
Alternative action required?
Other
Should be Empty: