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T4 Fraud

LILIAN27

Full Member
Apr 6, 2019
39
7
I am asking for a friend, any advice to give him would be greatly appreciated.

He applied to work at a bakery. He was told that he would do two weeks of training then the employer would know if he would hired him permanently. He was only available for 4 days a week for 7hrs a day . He was told it would be $12/hr. On the third day of work, He gave his SIN. After the first two weeks, he received his payment but it was cash. He asked the employer why is he paying him cash and the employer claims that the accountant received the information late and next time he would be paid by cheque.

He said he tried to encourage the employer to pay him by cheque after the accountant gave him the information but the employer said no and guaranteed him that he would be declared next pay time. Now after the next two weeks, he was anticipating a cheque because he was told that it would be a cheque but it was a cash payment so he left the job same day.

Fast forward to now, he received a T4 slip from the employer accountant in his mail for taxes. The payment said he received over $4000. When he was only there for 4wks and was only paid by cash 672x2

*He is not going to report on his taxes because it is not true but he would to know if when the business does their taxes if they going to mention his SIN

what should he do?
 

Naturgrl

VIP Member
Apr 5, 2020
38,751
8,016
I am asking for a friend, any advice to give him would be greatly appreciated.

He applied to work at a bakery. He was told that he would do two weeks of training then the employer would know if he would hired him permanently. He was only available for 4 days a week for 7hrs a day . He was told it would be $12/hr. On the third day of work, He gave his SIN. After the first two weeks, he received his payment but it was cash. He asked the employer why is he paying him cash and the employer claims that the accountant received the information late and next time he would be paid by cheque.

He said he tried to encourage the employer to pay him by cheque after the accountant gave him the information but the employer said no and guaranteed him that he would be declared next pay time. Now after the next two weeks, he was anticipating a cheque because he was told that it would be a cheque but it was a cash payment so he left the job same day.

Fast forward to now, he received a T4 slip from the employer accountant in his mail for taxes. The payment said he received over $4000. When he was only there for 4wks and was only paid by cash 672x2

*He is not going to report on his taxes because it is not true but he would to know if when the business does their taxes if they going to mention his SIN

what should he do?
He needs to talk to his employer first and ask to have the T4 amended to the correct amount. He can’t ignore it and not report it on his tax return.
 
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LILIAN27

Full Member
Apr 6, 2019
39
7
Ok. He is trying but no answer from the employer. They paid him cash for the four weeks even though he tried to negotiate with them to pay him later after they received the information from the accountant but no luck. That’s why he left the job after the second cash payment
 

Naturgrl

VIP Member
Apr 5, 2020
38,751
8,016
Ok. He is trying but no answer from the employer. They paid him cash for the four weeks even though he tried to negotiate with them to pay him later after they received the information from the accountant but no luck. That’s why he left the job after the second cash payment
He can’t ignore it. He needs to keep all records of trying to communicate with the employer.

What do you mean “pay him later?” How many hours did he work?


https://turbotax.intuit.ca/tips/what-can-i-do-if-i-think-my-t4-slip-is-not-accurate-5515
 
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YVR123

VIP Member
Jul 27, 2017
6,423
2,461
Agree that he cannot ignore a T4 under her SIN/name. Either get the owner to admend the T4 or report this to CRA (or tell the owner that he will report to CRA) . Hopefully he deposited his cash payment every time and can have some kind of proof of payment.
 
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LILIAN27

Full Member
Apr 6, 2019
39
7
Agree that he cannot ignore a T4 under her SIN/name. Either get the owner to admend the T4 or report this to CRA (or tell the owner that he will report to CRA) . Hopefully he deposited his cash payment every time and can have some kind of proof of payment.
He reported it and yes he has proof of the two deposits
 

canuck78

VIP Member
Jun 18, 2017
52,959
12,758
He worked 28hrs per week for 4wks. He reported it to CRA. I wished he recognized the red flag the first payment but I guess he was in a vulnerable situation
He did the right thing. He left after realizing that the employer was doing stuff off the books and committing accounting fraud. He took the right step in contacting CRA. The bigger issue is that he needs to speak to CRA about the discrepancy from what he was paid and his T4 on his own taxes or else his taxes will be flagged for the discrepancy.
 

Copingwithlife

VIP Member
Jul 29, 2018
3,864
1,866
Earth
He needs to write into his assigned Tax Centre /NVCC and explain this . Once that T4 gets into the system , the individual will be assessed on the amounts indicated on the T4. When the o/p sends in his tax return and the amounts don’t match , the system will kick it out and it’ll be sent to two places ; T1 Matching , T1 assessments.
https://www.canada.ca/en/revenue-agency/corporate/contact-information/where-mail-your-paper-t1-return.html
The O/P MUST write in and state the T4 us incorrect, with copies of deposits and any correspondence received from the employer.
Something doesn’t make sense . If the employer over stated the earnings , this will then cause a mismatch in their RP account . Fed tax CPP EI deducted and submitted. When T4 are submitted at the end of the payroll year , they must show amounts remitted and deducted from the employee . In this situation the RP account would be in a DR situation since the employer never showed any deductions being made.

Note, do not EXPECT this to be resolved fast. Amended T4 first get sent to a NVCC, if it’s a paper T4 someone has to manually enter the information .
If the o/p gets reassessed, they MUST call into the CRA and state that an amended T4 is being processed, so that the outstanding amount isn’t referred off to collections and or enforcement
 
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LILIAN27

Full Member
Apr 6, 2019
39
7
He needs to write into his assigned Tax Centre /NVCC and explain this . Once that T4 gets into the system , the individual will be assessed on the amounts indicated on the T4. When the o/p sends in his tax return and the amounts don’t match , the system will kick it out and it’ll be sent to two places ; T1 Matching , T1 assessments.
https://www.canada.ca/en/revenue-agency/corporate/contact-information/where-mail-your-paper-t1-return.html
The O/P MUST write in and state the T4 us incorrect, with copies of deposits and any correspondence received from the employer.
Something doesn’t make sense . If the employer over stated the earnings , this will then cause a mismatch in their RP account . Fed tax CPP EI deducted and submitted. When T4 are submitted at the end of the payroll year , they must show amounts remitted and deducted from the employee . In this situation the RP account would be in a DR situation since the employer never showed any deductions being made.

Note, do not EXPECT this to be resolved fast. Amended T4 first get sent to a NVCC, if it’s a paper T4 someone has to manually enter the information .
If the o/p gets reassessed, they MUST call into the CRA and state that an amended T4 is being processed, so that the outstanding amount isn’t referred off to collections and or enforcement
Thank you, I will tell him immediately. Yesterday we spoke and he said the employer told him the T4 was a mistake and all he had to do was discard it. He also said that the slip is now null and void because the accountant changed the information . We have been researching information on Canada website and a slip cannot be null and void , only cancelled or changed etc. I told him to ask for a copy because if the employer does any changes, he should receive a copy
 
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Copingwithlife

VIP Member
Jul 29, 2018
3,864
1,866
Earth
Thank you, I will tell him immediately. Yesterday we spoke and he said the employer told him the T4 was a mistake and all he had to do was discard it. He also said that the slip is now null and void because the accountant changed the information . We have been researching information on Canada website and a slip cannot be null and void , only cancelled or changed etc. I told him to ask for a copy because if the employer does any changes, he should receive a copy
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/completing-filing-information-returns/t4-information-employers/t4-slip/amending-cancelling-adding-replacing-t4-slips.html

per the attached link . If the employer has amended the slip , then they need to give a copy to the employee. Most importantly they want to WRITE amended on the slip . Since this employer sounds like he’s totally disorganized, I’d suggest that the employee sends in a copy of the amended tax slip to the CRA , to ensure it’s processed and attached to his file .

Write AMENDED in big block letters. If they don’t do this , the system will assume it’s an additional slip . Which will incur a late filing penalty on the employers RP account. Additional slip meaning additional income and this mess will just continues .

When writing , just give the FACTS
Bullet form . No need to go on and on about the employees life story .
As indicated earlier , this will take awhile . Not in a couple of weeks , but a minimum of a couple of months

** Do not discard anything . The incorrect T4 is part of the individuals tax year . It’s part of the story
 
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LILIAN27

Full Member
Apr 6, 2019
39
7
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/completing-filing-information-returns/t4-information-employers/t4-slip/amending-cancelling-adding-replacing-t4-slips.html

per the attached link . If the employer has amended the slip , then they need to give a copy to the employee. Most importantly they want to WRITE amended on the slip . Since this employer sounds like he’s totally disorganized, I’d suggest that the employee sends in a copy of the amended tax slip to the CRA , to ensure it’s processed and attached to his file .

Write AMENDED in big block letters. If they don’t do this , the system will assume it’s an additional slip . Which will incur a late filing penalty on the employers RP account. Additional slip meaning additional income and this mess will just continues .

When writing , just give the FACTS
Bullet form . No need to go on and on about the employees life story .
As indicated earlier , this will take awhile . Not in a couple of weeks , but a minimum of a couple of months

** Do not discard anything . The incorrect T4 is part of the individuals tax year . It’s part of the story
Thanks, I will surely let him know