From Your Edmonton Small Business Accountant: Taxes and Missing Documentation
Posted On: 01/05/16 - 0

In my last blog I talked about the “documentation” lesson that we encounter when trying to sort out a tax situation. So what if you are in the middle of one of these situations – what do you do? The first step is to document all the “known” facts that should not be in dispute. This can involve such things as who signed certain documents as well as where the “money” flowed. Here is what I see on a regular basis. You can sign document in your own name and then the money flows into a corporation. The debt in this case is a personal debt. If you look at the documents it will be clear that the names of the borrowers are the individuals. Now comes the tough part! The individuals never actually got the money but it was disbursed for all sorts of reasons. Maybe there is a “direction” signed to give the disbursing agent the authority to do this and maybe there isn’t. Sometimes there is a disbursement to settle an entirely different transaction and there is no paperwork. Ouch. My best advice in these situations is to construct a “fact” sheet with the events that are based on “real” documents. From there the interpretation of events can start and hopefully limit the actual solutions to ones that can be supported. We can help you with this process – give us a call



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