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Quiz: Failing to deduct, and failing to remit

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1 An employer under-withheld income tax from an employee. Who bears that liability? Neither, provided the T4 reports the correct income The employer, including the employee's income tax The employee remains liable for their own income tax and accounts for it on their return The liability is shared equally

Answer key unconfirmed — rests on 2 unverified claims.

2 How does the penalty for remitting late compare with the penalty for failing to deduct? Both are graduated according to lateness Both are a flat amount per occurrence The failure-to-deduct penalty is a percentage of the amount that should have been deducted; the late-remitting penalty is graduated according to how late the remittance is Both are a percentage of the amount, with no regard to timing

Answer key unconfirmed — rests on 4 unverified claims.

3 When does a higher penalty apply to a repeated failure to remit? On any second failure in the same calendar year On a repeated failure in the same calendar year where the failure was made knowingly or in circumstances amounting to gross negligence On any second failure across any two consecutive years Only where CRA has issued a formal demand

Answer key unconfirmed — rests on 1 unverified claim.

4 An employer remitted on time but to the wrong reference number. What is the fix? Remit again to the correct account and claim a refund of the first payment Request taxpayer relief for the resulting penalty and interest Nothing — CRA reallocates misapplied remittances automatically Have the credit transferred — this is a misapplication to correct, not a relief request

Answer key unconfirmed — rests on 1 unverified claim.

5 An employer wants penalties, interest and the underlying CPP and EI cancelled under taxpayer relief. Relief applies to penalties and interest and does not cancel the underlying tax, CPP contributions or EI premiums owing All three may be cancelled where circumstances warrant Relief is unavailable for payroll accounts Only interest may be waived

Answer key unconfirmed — rests on 3 unverified claims.

6 An employer has unreported payroll from prior years and CRA has just begun a compliance action on the matter. Is the Voluntary Disclosures Program available? No — the program is unavailable once CRA has commenced compliance action in respect of the matter Yes, but relief is limited to interest Yes, provided the employer discloses within 30 days of contact Yes — disclosure is available at any time before assessment

Answer key unconfirmed — rests on 1 unverified claim.

7 How does interest run on unremitted source deductions? Simple interest, from the date CRA identifies the shortfall Compounded daily, from the date of assessment Compounded daily, from the day after the amount was due Compounded monthly, from the end of the calendar year

Answer key unconfirmed — rests on 1 unverified claim.

Unanswered questions are marked wrong. There is no partial credit.