Revenue Canada Help

[Makka]

Hello:

I was wondering if there might be someone with knowledge pertaining to
current taxation laws. Specifically in a situation where someone owed
Rev Canada a substantial amount of money that there is no way that they
can ever hope to pay.

A scenario whereby a death benifit were issued (long since gone) and
due to lack of information the receipiant did not apply for the first
time home buyers exemption when withdrawing monies from an RRSP type
account. Because of such and with having been forced to sell their
property as facing foreclosure, they are virtually penniless; but still
in debt for taxes.

That asside, this same person does own a 2003 car. It at present time
has approx $4000 in damages and almost $2000 in fines against it. My
question is, from a taxation point of view, can this vehicle be deemed
as an asset and therefore be siezed by Rev Canada? And would a person,
awaiting approval for ODSP need to claim banqrupcy? (currently signed
off for medical reasons?) In otherwords can Rev Canada garnish ODSP
family unit benefits? Any help would be greatly appreciated.

Please note that this same vehicle is used primarily to transport an
ODSP reciepiant for medical appointments.

Thanks
Makka

[cecanddeb]

Talk to them andsend them hatever supporting doumentation you can.
Due to embezzlement myhubby found that every penny was gone. All money
paable to RevCan, aso gone. Morethan we'd get from ODSP in years ad
years. He remained on title to his house. This all bean 10 years ago,
they stopped interest but send the bill quarterly. Rev Can is not on
your credit rating. I would suggest a credit proposal over bankruptcy.
They're (RevCan) quite willing to work with people. They will want some
explation for their files.
D
Deb

[Gracie]

I know that ODSP funds cannot be garnished under bankruptcy laws by a
creditor other than the government ...you should pose your question on
the Ontario Bankruptcy blog
@ http://www.bankruptcy-ontario.org/blog/
There is lots of info there and it is totally anonamous.You should also
read the various directives on the ODSP site..just do a search for
ODSP..it's easy to find and almost self explanitory. Gracie

[shelly75]

on OW and ODSP they can garnish from us.

They can take take your tax returns to pay them back

[cleverwit]

ODSP shelter allowance is secure from garnisheement, but the basic
necessities can be clawedback by 5% a month until any overpayment
balance is reclaimed.
I'm not sure if that overpayment is specific to The ODSP program.
I do know that the fed's can clawback your GST for outstanding debts
but you have to file your taxes and ask them to. Check the yellow
pages and call an income tax specialist.

[abrowne]

Makka,

The person you are describing is in a bad situation.  A bankruptcy

can write off some stuff, but not everything.  For example, you can't

get rid of fines, family court judgments, student loans (until 10 years

post-grad), and a few other things.  Yes, Revenue Canada debt if it

is simply unpaid taxes and not fines can be written off by bankruptcy.

Yes, you can keep your car if you go bankrupt, but your trustee

may apply a lien on it if there is a positive equity value in it, but

kind of complicated to explain it all here and how this is done.

 

You don't have to prove medical issues for bankruptcy, just that you

are insolvent - that is, taking in less money than you owe.  There may

even be a way to rearrange your debts without going bankrupt.  You

need to speak to a trustee about the details and ask him/her for all

of your options before you choose, then think on it then decide.  A

bankruptcy can do serious damage to one's credit for several years

afterwards.  That's why I won't do it, because I rely on my credit in

order to survive each month.  But if you are okay there and can make

arrangements for about $1,200 - $1,500 in installments over 9 months,

attend at the office of your trustee three times and be able to collate

and record ALL of your creditors, it might be an option.

 

If your friend does not want to bother with the bankruptcy route, there

are direct routes through Revenue Canada as well, such as first: (a) get

a disability tax credit (if the doctor will sign one); (b) write to Fairness

Committee to ask to waive the statute bar on your disability tax credit;

and (3) appeal the balance on the basis of fairness and due process.

I've done this a few times, but if there remains some tax owing at the

end, arrangements do have to be made to get them paid.

 

And no, your ODSP benefits cannot be garnished by law, even if they

are put into your bank.  You can however be made to forfeit tax returns,

and GSTs.  They will not touch your child tax credit.

A

Makka <ukb...@sympatico.ca> wrote:

IA scenario whereby a death benifit were issued (long since gone) and

due to lack of information the receipiant did not apply for the first
time home buyers exemption when withdrawing monies from an RRSP type
account. Because of such and with having been forced to sell their
property as facing foreclosure, they are virtually penniless; but still
in debt for taxes.

That asside, this same person does own a 2003 car. It at present time
has approx $4000 in damages and almost $2000 in fines against it. My
question is, from a taxation point of view, can this vehicle be deemed
as an asset and therefore be siezed by Rev Canada? And would a person,

awaiting approval for ODSP need to claim bankruptcy? (currently signed

off for medical reasons?) In otherwords can Rev Canada garnish ODSP
family unit benefits? Any help would be greatly appreciated.

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[abrowne]

Hi,

I provided some correct direction on this.  I dealt with a few situations

like this before.  Revenue Canada can be quite understanding if you

are able to provide the disability tax credit form and work with the

appeals committee; however, if this is not possible, bankruptcy as

well as other possibilities can be explored under the Bankruptcy and

Insolvency Act.  ODSP can't be garnished, but if action is not taken,

the car (depending on red book value) might be.  This is why I suggest

certain steps, so the car can be protected.

 

Bankruptcy laws are operated under Industry Canada.  There is a ton

of information on the http://www.strategis.gc.ca website.

A

Gracie <angelw...@kos.net> wrote:

I know that ODSP funds cannot be garnished under bankruptcy laws by a
creditor other than the government ...you should pose your question on
the Ontario Bankruptcy blog
@ http://www.bankruptcy-ontario.org/blog/

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[cleverwit]

abrowne wrote:
> Revenue Canada can be quite understanding if you
> are able to provide the disability tax credit form
>

Can you tell me if I am in fact eligible for the federal disability tax
credit even though I don't have enough qualifying hours of CPP credits
?
I've been denied and I don't think that is fair to me or the
Province.
My entire adult life I have not been able to work or learn on a
fulltime basis, due to medical reasons. They've given me some credits
for child bearing and spousal split but not enough to qualify for any
priviledges. I'm so tired of being underpriviledged.
I think there are some benefits that would improve the quality of my
life if I could get this recognition from Revenue Canada and relieve
the Provincial government from so much financial obligation.

[Gracie]

"ONTARIO DISABILITY SUPPORT PROGRAM - INCOME SUPPORT
DIRECTIVE 5.16 INCOME SUPPORT PROTECTED FROM SEIZURE OR GARNISHMENT
SUMMARY OF LEGISLATION
Income Support is not subject to alienation or transfer by the
recipient nor is it subject to garnishment, attachment, execution,
seizure or receivership.
The Director may deduct a portion of income support for a child support
deduction order or a prescribed government debt owed by a member of the
benefit unit."

Only the government can attach or garnish your support payment..they
must get a court order to do so. Gracie

[Michael Bird]

1) if you have no taxable income the Federal Disability Tax Credit would appear to be of no use...2)you almost have to be comotose to qualify for this credit.  Mike

[abrowne]

Hi Michael,

I only use this strategy if a client owed Revenue Canada money

from past income and they cannot afford to pay it now, or if they

got a CPP lump sum and they get stuck with the taxes, though

received no benefit from the lump sum as it all went to ODSP.

I've been able to get many people on the disability tax credit; I

have legal texts that describe how the tax court interprets the

language of the application for this credit and how it discerns

between qualifying and non-qualifying.  My people were certainly

far *from* comatose ;-)

A

Michael Bird <michae...@gmail.com> wrote:

1) if you have no taxable income the Federal Disability Tax Credit would appear to be of no use...2)you almost have to be comatose to qualify for this credit. 

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[Undisclosed Receipient]

Hi, I was wondering why OSDP takes any Cppd.monies one should receive.

I have a tribunal coming up regarding this matter. It was only 1000 dollars. I  told them about my credit,from  the proceeds of credit splitting, which I should have been entitled to years ago.The SBT  put a stop to my overpayment until it is settled. Why can anyone on ODSP ,whom has a Gic, allowed to withdraw up to 5000. dollars once every anniversary of the maturity of a Gic, whick is then put in their personal bank account. They are not penalized. And, they do not get less ODSP the next month or any month following.

Lucky for them if they have a gic, or other debunture. But, yet a 3 month backdated sum of 1000, from CPPd, it is then taken as an overpayment. Does anyone know Why?

 

 

 

 

 

 

 

Be kind to one another...Live in Peace everyday......

[cleverwit]

Michael Bird wrote:
> 1) if you have no taxable income the Federal Disability Tax Credit would
> appear to be of no use...2)you almost have to be comotose to qualify for
> this credit. Mike
>

> :-) I heard about someone who was comotose, on full life support, being turned down for disability benefits because they were "institutionalized"...heard a Premier actually visited and assessed the applicant personally. Said patient had extra needs that were not readily available in or via the hospital....guess the patients lights went out soon thereafter.

[Gracie]

Here is the ODSP directive that allows the $5000 gift to yourself
without penalty:

ONTARIO DISABILITY SUPPORT PROGRAM - INCOME SUPPORT

DIRECTIVE 5.8 GIFTS AND VOLUNTARY PAYMENTS
SUMMARY OF LEGISLATION
Exemptions are available for certain types of voluntary payments and
gifts up to stated maximum amounts.
LEGISLATIVE AUTHORITY
Section 43 (1) 7,9, and 13 of the ODSP Regulation
SUMMARY OF DIRECTIVE
· Gifts or voluntary payments used for disability related items and
services are exempt from income.
· Gifts or voluntary payments for any other purpose are exempt up to
a maximum of $5,000 for any 12 month period per member of the benefit
unit.
INTENT OF POLICY
· To exempt gifts or voluntary payments provided to members of the
benefit unit for disability related items and services.
· To exempt gifts or voluntary payments provided to members of the
benefit unit for any purpose up to $5,000 for any 12 month period per

member of the benefit unit.

APPLICATION OF POLICY
Gifts and Voluntary Payments for Disability Related Items and Services
All gifts and voluntary payments in any amount from any source for
disability related items and services are exempt as income and should
not be deducted from income support. Disability related gifts or
payments are unlimited in value and can be given to any member of the
benefit unit. Examples of disability related items and services are
assistive devices, health items, support services, renovations or
alterations to the home for accessibility and/or health and safety, and
education and training.
ODSP staff must verify that gifts and voluntary payments for disability
related items and services are used for that purpose.
Gifts and Voluntary Payments 5.8 November 2005
ODSP Branch Page 1 of 2

ONTARIO DISABILITY SUPPORT PROGRAM - INCOME SUPPORT

Gifts and Voluntary Payments for Any Purpose up to $5,000 per member
· Gifts and voluntary payments may be given to any member of the ODSP
benefit unit for any purpose, up to a maximum of $5,000 for any 12
month period per member of the benefit unit.
The $5,000 exemption may not be used to reduce earned income by the
recipient or a member of the benefit unit.
The $5,000 limit is the maximum total allowable from all sources
including gifts and voluntary payments. For example, the recipient
cannot receive $5,000 from a trust and another $5,000 as a gift from
family and friends.
HYPERLINKS ASSOCIATED WITH THIS POLICY DIRECTIVE
Related Directives:
5.1 Definition and Treatment of Income
5.9 Disability Related Items and Services
Gifts and Voluntary Payments 5.8 November 2005
ODSP Branch Page 2 of 2

[cleverwit]

it's kinda like the good old days when you'd ask mom for your allowance
and she'd say to get it from your dad but he blew it at the slots so
she pays you from the grocery money and then dad gets lucky and pays
you and you pay mom back....the federal CPP is the first line of
disability support...ODSP tops that up or provides benefits for those
who don't qualify for CPP.
Provincial social assistance, ODSP is a "safety net"

[Undisclosed Receipient]

Thankyou Gracie for your source of information.

So, therefore, it sounds like I might be able to keep it.

I will print the email and what site do I find the other clauses?

Warmest regards,

Kimberley

Gracie <angelw...@kos.net> wrote:

size=3>everyday......

[Gracie]

When in doubt go to the Directives.... they are a great source of
info..it's surprising how the rules get misinterpeted. Just copy and
paste the link and you will find a gold mine of information.Gracie
http://www.mcss.gov.on.ca/mcss/english/pillars/social/odsp-is-directives/ODSP_incomesupport.htm

[harmony]

Shelley, ODSP is protected from being garnished.

it is here in the directives:

http://www.mcss.gov.on.ca/mcss/english/pillars/social/odsp-is-directives/ODSP_incomesupport.htm