Taxed And No T4 Issued

by Tax Guy - Burlington Accountant on January 6, 2010 Print This Post Print This Post

Question: My daughter worked part-time at a local variety store in 2006 and 2007 earning $9.00 per hour and was never issued a T4 slip for the work. The store was sold and the owner moved out of the country.

She just received a Notice of Assessment from the CRA saying that she owed $2,700 of taxes for 2006 and 2007, plus $875 for 2008 and she didn’t even work at the store in 2008.

We don’t know what to do and are looking for help.

Summary of Facts

From what you are saying, your daughter worked for a convenience store in 2006 and 2007. The owner never issued pay stubs or T4 slips for those tax years while she was working at the store. However, the store was sold and suddenly she is getting T4 slips for work done in 2006, 2007 and 2008. And these slips do not seem to coincide with the actual work done.

Employment Income Is Taxable

Whether pay stubs or T4 slips were issued or not, employment income is taxable. If income tax is owed, then an income tax return must be filed and the income tax remitted.

Options Available

You have a couple of options available.

  1. File income tax returns for 2006 through 2008. If your daughters’ total taxable income was under $9,039 for 2006, she would not have to pay tax and may be entitled to a refund.
  2. If the amount reported by the store is in dispute, contact the new owner and request that proof of payment be provided, including dates. If the new owners claim the records are missing or incomplete, consider contacting the CRA to discuss options.

If all else fails, consider speaking with a lawyer to discuss alternatives. You don’t necessarily have to sue but the lawyer can help provide some options on dealing with this situation.

Call To Other Accountants

Are there any other professional accountants that have some input? Consider leaving a comment.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

Print This Post Print This Post

Comments on this entry are closed.

Previous post:

Next post: