Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: 1. What circumstances give rise to amend a T4A?
2. Whose responsibility is it to amend the T4A?
3. What should the payer and payee do if they disagree with the amount reported?
Position: 1. When there is an error on a T4A; 2. A payer is responsible for amending the T4A; 3. The T4A is not binding
Reasons: 1. Regulation 200 requires correct T4As to be issued. Issuing an erroneous T4A means no compliance with the Regulations, therefore, it should be amended to correct the error; 2. The payer is responsible to amend the incorrect T4A; 3. The T4A is not binding, if the payee still disagrees with payer, the payee can file the amount it thinks is right with supporting document.
XXXXXXXXXX
2013-049444
Jack Cao
October 18, 2013
Dear XXXXXXXXXX:
Re: Amending T4A slips
We are writing in response to your e-mail of June 18, 2013, concerning the requirement to issue amended T4A slips. In your email you were seeking clarification from the CRA with respect to the following queries:
1. What circumstances give rise to the need to amend a T4A?
2. Whose responsibility is it to amend the T4A?
3. What should the payer and payee do if they disagree with the amount reported?
Our Comments
Written confirmation of the tax implications inherent in particular transactions is provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, "Advance Income Tax Rulings", dated May 17, 2002. This Information Circular and other CRA publications can be accessed on the internet at http://www.cra-arc.gc.ca/formspubs/menu-e.html. However, we are prepared to provide the following comments.
1. What circumstances give rise to the need to amend a T4A?
A person making a payment (the "payer") described in subsection 153(1) of the Income Tax Act (the "Act") is required under section 200 of the Income Tax Regulations (the "Regulations") to make an information return in prescribed form (i.e. a T4 or T4A slip and summary). For more information on how to prepare the T4A slip, please refer to the guide RC4157, "Deducting Income Tax on Pension and Other Income, and Filing the T4A slip and Summary".
Section 200 of the Regulations requires the payer to report the correct amount paid. If the amount reported is incorrect, regardless of the circumstance the payer has not technically complied with this requirement.
2. Whose responsibility is it to amend the T4A?
If the payer discovers an error after issuing the T4A, the payer should amend or cancel the T4A slip regardless of whether or not there has been a request by the payee to do so. The RC4157 provides more information on how to amend or cancel the T4A.
A payee who believes that there is an error on a T4A slip can ask the payer to amend or cancel the slip, whichever is appropriate. If the payer agrees that there was an error, the payer should amend or cancel the T4A. The T4A is a statement of what the payer believes the nature and amount of the payment to be. Therefore, if the payer is of the view that the T4A is correct, the payer should not amend or cancel the T4A.
3. What should the payer and payee do if they disagree with the amount reported?
Canada's tax system is based on the principles of self-assessment and voluntary compliance. The reporting of payments on information slips is an important part of this system. The information slip assists the recipient in reporting the correct amount of income on the recipient's income tax return.
Every taxpayer is responsible for accurately reporting his or her income on the income tax return whether or not an information slip has been received or is correct. If the payee believes that a T4A is incorrect and the payer will not or has not amended the T4A,the payee should report to the CRA the amount that the payee thinks is correct. Although the T4A is not conclusive proof of a taxpayer's income, the onus would be on the payee to show why the amount reported is incorrect. Accordingly, the payee should be prepared to provide to the CRA information and supporting documentation explaining why the T4A is incorrect.
We trust that these comments will be of assistance.
Yours truly,
Terry Young, CPA, CA
Manager, Administrative Law Section
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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