Penalties for Repeated Failures to Report Income
If you missed or forgot to report any income on your 2012, 2013, or 2014 returns, and you again miss or forget to report any income on your 2015 return, you may be subject to a penalty for the repeat offense.
The penalties for repeated failures to report income for 2015 and subsequent years apply where the unreported income exceeds $500. The penalty itself is equal to the lesser of 10% of the unreported income or 50% of the additional income taxes payable on the unreported income.
With the myriad of T-slips issued these days, it’s easy to miss or forget one or two slips, especially when the slips are issued at different times during the year. The Canada Revenue Agency (CRA) receives copies of all T-slips, and through a matching system, endeavours to match each T-slip to a tax return to make sure all income is reported. This means your failure to report income will eventually be caught by the CRA. The best defence against the penalty for the failure to report income is to be vigilant about reporting your income, making sure to follow-up on any T-slips that you think might be outstanding. You can call the CRA or log in to their My Account service to verify certain of the T-slips you should be reporting on your income tax return.
There are other potential penalties for failing to report income that may apply, and there are also Voluntary Disclosure and Taxpayer Relief measures in place that can potentially avoid or reverse such penalties. For assistance, contact a Chartered Professional Accountant.