Recently the CRA asked two of my clients to verify „Non-business foreign taxes paid”. Both of them received a foreign pension in 2021 and paid foreign taxes, which I converted to Canadian dollars.
According to the CRA letters, in both cases the “amount under review” of the foreign taxes was, for totally inexplicable reasons, much higher than the amount I entered. Indeed, when I took a look at form T2209, on line 43100 the amount was the same that the CRA had: it was totally different from the amount I entered and it was NOT correct! However, once I unlocked the return, the amount reverted to the correct amount!
The good news is that even though the amount was wrong, once it reverted to the correct amount, the tax calculations (i.e., refunds/balance due) did not change—so they must have been based on the correct amounts after all.
However, now I have to explain this to the CRA each time a client is asked to verify the amount of foreign taxes paid.
Please, take a look at this issue and correct it! Also, it would be a great idea if Profile could provide a letter for the CRA explaining this issue—I could mail such a letter to the CRA.
I posted the original comment almost 2 months ago (August 15, 2022). Today another client received a letter from the CRA to verify his non-business foreign taxes paid of $2,297.21.
Again, the amount was WRONG: the actual amount-the one I entered-was $1,029.38! I have no idea where that other amount came from. Once I unlocked the returns, the amount reverted to the correct one. Also (thanks God!) the actual calculations (refund/balance) were apparently based on the CORRECT amount of taxes and thus did not change.
Nevertheless, I find it UNACCEPTABLE! Not only do I have to explain this situation to my clients, but also provide an extra explanation to the CRA.
Besides, it is a pity nobody from Profile has bothered to reply to my post or otherwise contact me regarding this issue (well, so far I have been contacted by Profile numerous times to renew my software subscription for the next year!)
Could you please contact me as soon as possible?
I spoke to Profile technicians twice over the past 2 days, I was able to show them how the amounts suddenly change once the file is unlocked and this issue is being investigated now.
The files Jack supplied are under investigation. There is no known issue at this time. Our product development team is investigating the files to determine the root cause of the issue. As always we will investigate any suspected ProFile errors. Call us at 1-800-452-9970 if you suspect any ProFile errors so we can get the information needed to start an investigation. I will update here if there is a ProFile error found.
Thank you for reporting ProFile issues so we can resolve them
I think the reason so many of my clients get letters from the CRA about their 'non-business taxes paid' is because such taxes are disproportionally higher in comparison to their related foreign income-because of that issue with Profile. Just over the weekend, I was contacted by 2 more clients who go such letters.
Some of the clients contacted by the CRA have been declaring this kind of income (i.e., foreign pension) for years and many of them had to submit appropriate documents to the CRA years ago--based on my past experience, the CRA did not ask them for verification for the subsequent years.