Tax Collectors Treat Canadians with Pettiness & Disdain :CRA SOTW
Alan Baggett
Taxman says he wants to set wrongs right
Don Cayo, Vancouver Sun
Published: Thursday, November 01, 2007
The Canada Revenue Agency says it's eager to contact the taxpayers
whose complaints about the taxman I've chronicled in recent columns to
see if their problems can be resolved.
Bradley Alvarez, the CRA's spokesman in the Pacific region, called
Wednesday to thank me for bringing these instances -- several of which
have been festering for years -- to light.
"What we'd like to do," he said, "is, where there have been issues,
try to correct them as soon as possible."
In most cases, he said, CRA will be able to find contact information
in its files based on the information I've published. In the few cases
where that might not be possible, I've obtained the taxpayers'
permission to pass on their contact information. I've also asked them
all to let me know if or when they're contacted, and what, if
anything, results.
Fewer than a dozen complaints, all with a common thread of what
appears to be mean-spiritedness or incompetence, have made it into
print. They involve a range of inequities and absurdities that
include:
- A company penalized $4,800 for paying a tax bill early and in person
rather than at a bank.
- A co-op fined $70,000 for being late with a $1-million GST payment,
even though CRA staff were unsure for years if it was actually owed,
and despite the fact all this money was due to be refunded as soon as
it was paid.
- A woman who lost more than $100 and a man who lost $700-plus in
interest payments as a result of two unrelated mistakes that were
clearly CRA's fault.
- A man penalized $2,500 for deciding to file late after he checked
and was informed no penalty would apply.
- A man who, after years of back and forth, was given just a day to
decide if he'd pay a big, five-figure settlement and sign a waiver
forgoing the right to try to win it back, or risk the same amount to
fight a court battle.
I'm not holding my breath, but I'll be well pleased if the publicity
helps solve their problems.
But note that these cases are but a modest fraction of the stories of
tax woes that have flooded into my e-mail in-box in recent days. And,
judging from the fact that almost 70,000 Canadians formally objected
to Revenue Canada rulings last year, there must be tens of thousands
more out there that I've never heard of.
What about them? I asked Alvarez to suggest a way they could be fast-
tracked to someone who has the authority to review them quickly and
draw a common-sense conclusion.
He responded with a list of phone numbers, websites and procedures for
people with complaints. I'm not bothering to list them here, in part
because I've no doubt you can find them on the Web, but mainly because
they are the very procedures that, by the time people come to me in
frustration, have already failed.
What's needed here is far more than a token effort to address the tip-
of-the-iceberg cases that have made it into print.
In May, Finance Minister Jim Flaherty announced a Taxpayer Bill of
Rights, intended to ensure tax fairness. Even before this
announcement, about 34 per cent of people who had appeals heard
internally by the CRA last year were winning their cases, and another
20 per cent won partial victories.
But -- as the cases I've written about, and all the ones I have
waiting in the wings, clearly illustrate -- the new process is far
from a total success. And at least some of its failures are
spectacular.
The government hasn't yet got around to appointing an ombudsman
promised when the Bill of Rights was announced, though Alvarez tells
me an announcement is expected shortly.
Depending on how hard-nosed and fair-minded the ombudsman turns out to
be, filling the job might or might not do the trick.
But what's urgently needed is a cheap, rapid, easy-to-access step in
the tax assessment process where someone looks at a disputed issue
through a simple lens of common sense. Is an assessment or penalty
fair? Does a decision produce a worthy result?
I believe four simple principles should underlie every tax ruling.
They are:
- Penalties should always be in proportion to the scale of an offence
or error, not bizarrely harsh as in the case of the hundreds of
companies -- only one of which I wrote about -- who paid bills in the
wrong place.
- Rulings should never be applied retroactively to cover the period
while CRA was still deciding what a regulation means and during which
taxpayers could get no authoritative advice on what they had to do to
comply.
- Taxpayers should never have to pay anything extra as a result of a
CRA mistake.
- The agency needs both a little compassion and the ability to turn on
a dime to address humanitarian concerns.
So, it's good that the light The Sun has shone on a handful of cases
has attracted the agency's attention. But its token steps to respond
are barely a start on the job that remains to be done.
dc...@png.canwest.com
© The Vancouver Sun 2007
AND
Tax collectors treat Canadians with pettiness and disdain
Vancouver Sun
Published: Thursday, November 01, 2007
In May, federal Finance Minister Jim Flaherty announced, to much
fanfare, the introduction of the Taxpayer Bill of Rights, saying it
"will ensure fair treatment of all taxpayers by the CRA [Canada
Revenue Agency]."
Nearly half a year later, a series of columns by Vancouver Sun
columnist Don Cayo reveals that it has done no such thing. Indeed,
Cayo has documented instance after instance of pettiness, heavy-
handedness, and bewildering behaviour on the part of the tax
collectors.
Here are a few examples Cayo uncovered:
? A company cuts a cheque for all money owing to the agency -- more
than $46,000 -- and pays it a week before it's due. But the company
made the "mistake" of paying at the Surrey CRA office instead of at a
bank, as the CRA prefers. The penalty for paying the bill in full and
a week early at the CRA's own office? A cool $4,600.
? 130 farmers get dinged for nearly $1 million in GST payments and are
pressured to pay quickly even though once the money is paid, the CRA
will automatically owe every cent back to the farmers. The CRA does,
however, take its sweet time -- more than a year -- paying the money
back.
? A woman who lives in Canada but works as an escort in the United
States pays her taxes -- even though she could easily get away without
doing it -- and is informed by the CRA that she must pay an additional
$27,000 in GST unless she proves she made the money in the U.S. Not
only does this discourage people from paying taxes, but also shows
that the federal government has no problem living off the avails of
prostitution.
? A conscientious taxpayer checks the CRA website to see what penalty
he will face for filing his taxes late, and discovers there's no
penalty because he doesn't owe anything. After filing, however, the
taxpayer is fined $2,500 for failing to fill out a one-page form
detailing his assets in a foreign country -- something the CRA website
neglects to mention.
Cayo provides many other examples of the CRA's heavy-handedness,
including going after a taxpayer for one penny -- that's right, one
red cent -- and its habit of asking taxpayers to waive their rights to
take matters to tax court, even while insisting that it will not waive
its right to pursue the same taxpayers.
Clearly, the CRA is not really concerned with treating taxpayers
fairly, and, just as clearly, the Taxpayer Bill of Rights hasn't done
anything to ensure that the tax collectors do so.
While officials did call Cayo on Wednesday to inform him that the CRA
will be examining these cases with a view to solving them, there is
still a culture at the agency that treats taxpayers -- their
employers, after all -- with disdain.
So it's time for Revenue Minister Gordon O'Connor to explain how he's
going to set things right. To that end, The Vancouver Sun editorial
board has asked for a meeting with O'Connor. We'll keep you informed
as to what he says. Or doesn't say.
© The Vancouver Sun 2007
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Alan Baggett – Tax Collector’s Bible
Canuck57
> - A man penalized $2,500 for deciding to file late after he checked
> and was informed no penalty would apply.
Never, and I mean NEVER trust the CRA for advice. Costly mistakes
happen if you do, the twits don't know their own laws. Use a good tax
accountant that actually reads CRA bulletins. They will always take the
governments best interests before yours. I have called them twice, 2
years ago and 6 years ago and gotten bad information.
When I get garbage from CRA, I just dig out the paperwork, researching
each with their own judgements, bulletins and interpretations.
Would make a good W5 show to call them up and stink their BS.
Alan Baggett
Yeah, its a shame that it's come to this.
But it gets worse.
The first tax tale of 2010 relates directly to this story - very
timely.
Canuck57
Looking forward to it. CRA have only one goal, lifing money from your
pocket. Fairness, integrity and credibility have squat to do with it.
A major part of the problem is how complex the law is. It is insanely
complex, if CRA can't understand it neither should we have to.
Tax law needs massive simplifiecation but no one trusts the government
not to get greedy.
We are screwed if we don't revolt and put leash on our politicians.
Todays society is about tax based slavery.
Alan Baggett
>
> - Show quoted text -
Its very telling when even CRA employees have trouble disseminating
correct answers to taxpayers.
Canuck57
But it is the truth. The only question is it government greed or that
they are just plain stupid?
I think both. Their bosses measure in collected revenue, not fairness.
Alan Baggett
>
> - Show quoted text -
They do it because they can do it anonymously.
If they do a bad job on purpose or they just make a mistake, most
often, no one ever knows but for the CRA and the affected person.
So its like it never happened.
Many CRA employees don't tell people where they work becuase they are
embarassed to do so. Consequently the one thing a CRA employee hates
is to be publicly named.
Canuck57
Even cops would not be friends with you if they knew you were CRA.
But I would do the job if I could go after the big fish. Just wouldn't
be able to look mself in the mirror turning over some old lady on
limited income that forgot $500 in interest.
Taxation, modern day slavery.