5 BULLET FRIDAYS - Tax Mechanic News, Tips & Strategies

Welcome to Tax Mechanic Insights! 📬

🔐 Major CRA Update: Instant Access for Tax Preparers, Reinvented

🚀 What’s New: Instant Authorization in Represent a Client

Gone are the days of waiting. CRA has upgraded the Authorization Request service within Represent a Client to offer immediate access to individual tax accounts—no more five-day processing delays.

To qualify for instant access:

• You must be the representative submitting the request

• You must use the Authorization Request feature in Represent a Client

• You must input info from your client’s Notice of Assessment (NOA) that’s at least six months old

🛠️ Discontinued: EFILE Authorization for Individuals

Starting July 15, 2025, the Authorize a Representative service within EFILE software has been retired for individual clients.

• ✅ Still valid for business clients

• ❌ No longer usable for individual authorizations

💡 Empowering Your Clients: Two Instant Access Options

Source: CRA Announcement

🚀 How a $30B CEO Runs His Company with ChatGPT

Dharmesh Shah’s AI playbook, decoded from My First Million

🧠 Context is Power

Dharmesh treats ChatGPT as his second brain. By feeding in rich, detailed context, he gets sharper insights, faster decisions, and better mental clarity—at scale.

🧬 Vector Embeddings = Instant Recall

Think of it as an AI memory vault. With vector embeddings, he stores and retrieves nuanced ideas across business areas—like having perfect recall on demand.

⚙️ Automation Meets Delegation

From auto-generating memos to summarizing meetings, Dharmesh uses ChatGPT to automate knowledge work—without hiring a single extra person.

🤖 Agentic AI Is Already Here

He doesn’t just prompt—he orchestrates. Using ChatGPT to call APIs, manage workflows, and run “AI teams” that act like digital executives.

💸 Canada’s Debt Dilemma: A Growing Financial Flashpoint

As inflation tightens its grip, debt delinquency surges across the country. Here’s what Canadians need to know—and how to act strategically.
Sourced from national trend data and insights from industry professionals

📊 A Wake-Up Call: Missed Payments on the Rise

Recent reports reveal a sharp 24% increase in missed debt payments—a sobering signal of financial stress affecting households from coast to coast. This isn’t about poor planning. It’s about a system under strain.

What’s driving this trend?

• Skyrocketing living costs — from groceries to gas, basic needs now demand a greater share of income

• Housing pressures — mortgage and rent spikes are stretching budgets

• Credit dependency — more Canadians are leaning on credit lines and cards to bridge the gap

🔁 Breaking the Debt Cycle: Why Refinancing Matters

When managed well, refinancing can be a game-changing financial strategy. By consolidating high-interest debts into a mortgage, you’re not just moving money—you’re unlocking relief.

🤝 Take Back Control: Work with a Pro

Now more than ever, proactive financial planning is non-negotiable. Whether you're seeking breathing room or building resilience, working with an expert makes all the difference.

🎯 Ready to reset your financial path?
Connect with Genelle George, Mortgage Agent at Next Level Mortgage, for tailored guidance that works for you.

⚖️ Vohra v. The King: Tax Deductibility Hinges on Legal Precision

Refining the boundary between child and spousal support under the Income Tax Act
Source: Tax Court of Canada, 2025 TCC 93

📉 The Case in Brief: Disallowed Deductions on $33K in Support Payments

Dr. Rajat Vohra’s appeal to deduct $33,000 in spousal support for the second half of 2019 was dismissed by the Tax Court of Canada, with Justice Spiro affirming that the support payments in question did not meet the statutory requirements for deductibility under the Income Tax Act.

📜 Key Legal Principle: Identification Matters

Under subsection 56.1(4) of the Act, only support payments explicitly identified as spousal support in a written agreement or court order are deductible by the payer and taxable to the recipient. Otherwise, they’re deemed child support—non-deductible and tax-free.

🧾 Timeline of Events & Ruling Rationale

• Although Dr. Vohra intended to allocate $5,500/month of the $8,000 as spousal support, the Consent Order failed to make this distinction.

• The Tax Court cannot rewrite or reinterpret consent orders to reflect subjective intentions.

• No subsequent court order modified the terms or identified the $8,000 as spousal support.

🧭 The Judgment

🧾 How to Register for a CRA Business Number (BN) — RC1 Form, Simplified

As seen in our latest TikTok — yes, we made taxes entertaining.

☕ Starting a Business? Meet the CRA.

A Business Number (BN) is your company’s 9-digit CRA ID. It links to:

You’ll need one BN per business — it’s your tax passport in Canada.

@taxmechanic

Ready to register your Canadian Business Number in one go? 📝 The RC1 form lets you set up GST/HST (RT), payroll (RP), corporate tax (RC), ... See more

🛠️ Two Ways to Register

1. Online (CRA Business Registration):
   ✅ Fast, ideal for residents & simple setups

2. RC1 Form (Paper):
   📝 Required for non-residents, charities, trusts, condo corps, or custom cases

📑 RC1 Breakdown — What You’ll Fill

Only fill sections that apply. One form, many account types.

📬 Submit It Smart

📠 Mail or fax to CRA — or better, register online if eligible.
📌 It’s faster. And fewer paper cuts.

🎯 Need help with your RC1?
Watch our full TikTok tutorial and reach out to Tax Mechanic — we love CRA forms so you don’t have to.