The prospect of doing battle with the Canada Revenue Agency (CRA) over a tax dispute is daunting. Often the taxpayer is under financial pressure, and trying to pay for lawyers in a fight with an organization with near limitless resources is a definite case of David vs. Goliath. A potential ally in a battle with CRA is the Taxpayer’s Ombudsman who upholds the taxpayer’s eight service rights: – the right to be treated professionally, courteously, and fairly; – the right to complete, accurate, clear, and timely information from the CRA; – the right to lodge a service complaint and to be provided with an explanation of the CRA findings; – the right to have the costs of compliance taken into account when tax legislation is administered; – the right to expect the CRA to be accountable; – the right to expect the CRA to publish service standards and report annually; – the right to expect the CRA to warn you about questionable tax schemes in a timely manner; and – the right to be re...

A while back I replaced a hot water heater that had sprung a leak . In my financial analysis of whether to rent or buy a new hot water heater I didn’t take into account the fact that Direct Energy would just keep charging me for the old hot water heater I returned. I have a nice receipt showing that I returned the old water heater on March 15, but the latest gas bill from Enbridge still has a rental charge of $15.21 (with GST) from Direct Energy. I’d like to refuse to pay, but Enbridge is the enforcer here. They can cut off my gas if I don’t pay whatever amount Direct Energy asks for. We haven’t been sitting on our hands just hoping that the billing works out. When the previous gas bill had a full rental charge, my wife called Direct Energy. Their records indicated that the heater had been returned March 17 (off by two days but close enough). Everything seemed to be in order. We had to pay in full for the partial month, but there would be no further charges. She called aga...

1. Preet has yet another reason why credit card balance insurance is a bad idea . 2. Rob Carrick asks whose interest does your financial advisor have at heart?

The MER on many of the popular iShares exchange-traded funds (ETFs) will be going up due to a 5% increase in management fees. This change will affect 29 ETFs. A notable ETF not affected by this change is the S&P/TSX 60 Index Fund (XIU). The Notice to unitholders goes to a lot of trouble to explain that this is just a change in the way that the GST is handled. BlackRock used to pay the GST out of the management fees collected, but now they won’t. The claim is that “There will be no change to the amount of management fees paid by any iShares Fund.” Notwithstanding language games, the amount of management fee kept by BlackRock for the affected funds will be going up by 5%. The amount that investors will pay for the combination of management fees and GST will be going up by 5%. There is no getting around the fact that this is a 5% fee increase.

I am a long-time user of QuickTax, but I’ve always used the desktop version. From a recent entry on Ellen Roseman’s blog, I learned that the online version of QuickTax does not give direct access to the tax forms; you must use the interview method. The desktop version gives access to both forms and the interview process. I find the “easy step” interview process quite convenient to use, but I’ve never been able to use it exclusively. I’ve always had to go directly to the tax forms to enter data the interview process missed or to check that I did things correctly or optimally. It may be that I don’t quite use the interview process correctly, but the reason why certain things get missed doesn’t matter. The end result is that I need access to the forms. I’m interested in the experience of other users now that we’re through tax season. Are you able to use the interview process exclusively or do you need to access the forms? Not having the forms accessible is a show-stopper for me...

For the past 10 or 11 weeks it seems like Canadian and U.S. stocks have gone up every day. There have been a few down days, but the rise has been quite steady. Even though I know better, I expect to see another increase when checking each day. If this trend continues long enough, many investors scared off by the market lows from a little over a year ago will be lured back in. Even higher stock prices would lure in people who have never invested in stocks before. Few of us are immune to the perverse tendency to be wary when stock prices are low and confident when they are high. Perhaps we can expect the deluge of reports about reducing risk by reducing stock ownership to reverse and we’ll see more commentators talking about the merits of long-term stock ownership. I find I can never remind myself too often about Warren Buffett’s advice to “be fearful when others are greedy and greedy when others are fearful.” So, instead of going out and spending as though you expect stocks t...

A while back I explained an unusual stock option-related situation where it is possible to buy and sell stock and end up owing more in taxes than the proceeds from the sale. The latest federal budget has remedied this situation by limiting the tax owed to the proceeds of the sale . However, this budget is not yet law. This brings me to the question of how reasonable CRA plans to be about this. I’m in a situation where I owe a very large sum under the current tax rules, but once the budget becomes law, I can refile my 2009 taxes to owe a much smaller sum. As the transition of the budget into law is largely a formality, it makes little sense to send CRA a lot of money only to get it back soon. After penetrating many levels into CRA’s help system, I was told that in fact I could just pay the lesser amount and my return would be held until the budget passes (as long as I file the return along with some special forms to ask for special treatment). This sounds very reasonable, but I...