Exam 2: Procedures and Administration

Mark Brown's 2020 Net Income includes business income. When is his 2020 tax return due? By what date must his 2020 tax liability be paid in order to avoid the assessment of interest on amounts due?

Greta died on September 10, 2020. She has never reported any business income. By what date must her final tax return be filed?

The normal reassessment period is 3 years for individuals and CCPCs and 4 years for other corporations. Indicate two situations where a reassessment can occur outside the normal reassessment period.

In the three independent cases which follow, assume that Barry Levenor's combined federal and provincial Tax Payable is as follows: Required: A. For each of the three cases: • indicate whether instalments are required for the 2020 taxation year; • in those Cases where instalments are required, calculate the amount of the instalments that would be required under each of the three acceptable methods; and • in those cases where instalments are required, indicate which of the three acceptable methods would be the best alternative. B. For those Cases where instalments are required, indicate the dates on which the payments will be due.

PP Ltd., a client of your firm, has a November 30 year end and has requested you to advise them on what its monthly instalments for the 2020 tax year will be. Its taxes payable for its November 30, 2018 and November 30, 2019 years were $13,800 and $13,200, respectively. Its estimated taxes payable for the November 30, 2020 year are $14,400. PP Ltd. wants to pay the lowest amount possible, without incurring interest penalties. What would its instalments be?

Nancy Forth filed her 2020 tax return as was required on April 30, 2021. Her Notice of Assessment dated May 15, 2021 indicated that her return was accepted as filed. On July 12, 2022, she receives a Notice of Reassessment dated July 2, 2022 indicating that she owes additional taxes, as well as interest on the unpaid amounts. What is the latest date for filing a notice of objection for this reassessment? Explain your answer.

For the taxation year ending December 31, 2018, a corporation's combined federal and provincial Tax Payable is $57,600. The corresponding figure for 2019 is $67,900. For the year ending December 31, 2020, it is estimated that combined federal and provincial Tax Payable will be $62,900. Case One The taxpayer is a publicly traded corporation. Case Two The taxpayer is a publicly traded corporation. Assume that its combined federal and provincial taxes payable for the year ending December 31, 2019 were $61,400, instead of the $67,900 given in the problem. Case Three The taxpayer is a small CCPC. Case Four The taxpayer is a small CCPC. Assume that its combined federal and provincial taxes payable for the year ending December 31, 2019 were $61,400, instead of the $67,900 given in the problem. Required: For each of the preceding independent Cases, provide the following information: 1. Indicate whether instalments are required during 2020. Provide a brief explanation of your conclusion. 2. Calculate the amount of instalments that would be required under each of the acceptable methods available. 3. Indicate which of the available methods would best serve to minimize instalment payments during 2020. If instalments must be paid, indicate the dates on which they are due.

If an individual is required to make income tax instalment payments, one acceptable pattern of payments is to base each payment on one-quarter of the estimated Tax Payable for the current taxation year.

If quarterly instalments must be paid by an individual, they can be calculated as one-quarter of the net tax owing for the preceding year.

Under what circumstances must a corporation make income tax instalment payments during its current taxation year?

For a public corporation, which of the following statements is correct with respect to filing a notice of objection?

Individuals are required to pay instalments: