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My parents left Canada in 1986 for India, selling their house, but not closing all their bank accounts. They didn't file taxes for 1986.

My father died in 1993, and my mother didn't visit Canada again until 2012, at which point she cashed some Canadian Savings Bonds that matured in the late 80s.

She’s now moved back to Canada, and I'm trying to make sure that all her records are in order.

  1. Does she owe taxes for 1986? Should she file a voluntary disclosure? I'm confused by the ten-year limitation.
  2. Does she owe taxes on the interest of the CSBs she cashed in 2012?

I'm considering hiring a tax lawyer, but I want to make sure that wouldn’t be overkill.

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Whether or not your mother should have filed a tax return for 1986 depends on a number of things.

Most Canadians, if they are employed in a regular job and don't have huge investments, don't end up owing the CRA much at the end of the year. In fact most are due a refund, because their employer has been making tax payment deducted from their paycheque throughout the year. If your mother did not work in 1986 and wasn't self-employed then it is likely her income falls under the threshold for paying tax. If she left in the first six months of 1986 it's also possible she didn't qualify as resident in Canada for tax purposes that year.

A combination of these factors means that it's unlikely she owes the CRA a lot of money. In fact it's more likely that the CRA owes her money. If no tax was payable, there was no requirement to file a tax return, I believe. (Although if she had substantial non-salary income, or worked and didn't make PAYE contributions that's a different matter).

My recommendation would be to contact the office that deals with voluntary disclosure, and explain the facts. They can give you advice on how to proceed.

The ten-year limitation rule was recently overturned by the Supreme Court, so it doesn't apply any more.

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  • Thank you, DJ. I'll check, but I'm pretty sure my mother didn’t work in 1986. However, my father was self-employed. I don't know if he made any contributions.
    – Alex
    Aug 11, 2015 at 0:06

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