Canada’s Tax Ombudsman – Making a Difference!
Alan Baggett
The Taxpayers' Ombudsman has reviewed several hundred service
complaints to date. Here are a few examples:
A single mother who relied on the Canada Child Tax Benefit (CCTB) to
make ends meet had her benefits suspended by the CRA. The CRA asked
this taxpayer to provide documentary proof that her children were born
in Canada. Letters from the family doctor who delivered the babies, as
well as from other people who knew the family, were provided but
deemed insufficient proof by the CRA. The dispute went on for months
and the taxpayer was facing foreclosure on her mortgage and the
potential loss of her home. A complaint was made to the Taxpayers'
Ombudsman, who reviewed the matter. Following the Ombudsman's
intervention, the taxpayer was issued a $38,000 CCTB payment and was
able to keep her home.
The operator of a special care home for adults received a per diem
allowance for each of her residents from the provincial government.
This allowance is a form of subsidy to the residents and is not
considered taxable income for the owner of the home. The CRA officials
who reviewed the owner's file were not aware that this revenue was tax-
exempt and proceeded with collection action that included freezing the
taxpayer's bank account and garnisheeing $4,700. This resulted in
considerable difficulties for the taxpayer. Once the Ombudsman got
involved, the CRA ceased its collection activities and released the
taxpayer's bank account.
A single father supporting a disabled daughter and caring for his
elderly mother had worked out a payment arrangement for his tax debt
with the CRA and provided the CRA with a series of post-dated cheques.
Once the CRA had cashed all the cheques provided, there remained a
balance owing on the taxpayer's account. But rather than contact the
taxpayer to request additional cheques or make alternative
arrangements, CRA collection officers seized the taxpayer's bank
account. This caused hardship to the taxpayer and his household, which
went without food for two days. Once the Ombudsman intervened in this
matter, the taxpayer's bank account was released and he was issued a
cheque from the CRA.
A retired taxpayer's pension was garnisheed as part of the CRA's
efforts to collect taxes from him. The CRA did not respond to a
payment arrangement proposed by the taxpayer and issued a Requirement
to Pay, which is a form of demand letter. The CRA then garnisheed the
account without informing the taxpayer, contrary to CRA collection
policy. As a result of the Ombudsman's intervention, the Requirement
to Pay was lifted and a payment arrangement was concluded to the
taxpayer's satisfaction. The taxpayer also received a verbal apology
from the CRA.
A taxpayer applied to the Minister of National Revenue for a remission
order, which is an order from the Minister to the CRA to erase a
taxpayer's debt. The request was denied because the taxpayer did not
meet the eligibility requirements for a remission order. The taxpayer
was not satisfied with the result and could not understand why he did
not qualify for the relief requested. He filed a complaint with the
Ombudsman. While the Ombudsman did not determine any unfair treatment
on the part of the CRA, as a result of the Ombudsman's intervention,
the CRA saw the opportunity to improve its communications and will be
modifying its standard letter regarding remission orders. It is also
in the process of producing a guide for public use.
A woman living on minimum wage and relying on tax credits such as the
Canada Child Tax Benefit (CCTB), the Universal Child Care Benefit
(UCCB), and the goods and services tax (GST) credit to make ends meet
had separated from her common-law partner in March of 2006. She
advised the CRA of her change in marital status in her application for
increased CCTB and other family allowance supplements. In 2008, the
CRA requested proof of her marital status. She provided the CRA with a
copy of her new lease without the ex-spouse's name and utility bills
in her name only, the phone number of her former spouse, as well as a
letter from the mother of the former spouse stating that her son
resided with her. The CRA did not accept this evidence of a change in
marital status and claimed a repayment of $4,200 in tax credits. The
CRA even asked her to obtain a copy of her ex-spouse's tax return. As
a result of the Ombudsman's intervention, the CRA eventually
recognized the change in marital status and issued a payment of $1,500
to the taxpayer.
A man suffering from an inoperable brain tumour had a house fire in
2005 in which many of his tax records were destroyed. As a result of
not filing tax returns on time, he was subject to penalties and
interest on his personal income tax account as well as his goods and
services tax (GST) account. The taxpayer applied for taxpayer relief
under the Income Tax Act, asking that he be absolved of these
penalties and interest due to the exceptional circumstances and
hardships that led to them. The applications for income tax and GST
relief were processed in two different tax offices. One office granted
relief and the other did not. The Ombudsman reviewed the case and
commented on the apparent lack of fairness in the outcome of the
taxpayer's request for relief. In the end the CRA granted the
taxpayer's request and the penalties and interest were cancelled.
It is important to note that in the above cases, the Ombudsman was not
required to make any recommendations. By getting involved in these
case reviews, asking questions, and providing initial impressions on
the apparent fairness or level of service received by the taxpayers,
the Ombudsman caused the CRA to rethink its position on these files.
The power of an Ombudsman comes not from being able to order an
organization to do anything, but to cause that organization to see a
problem from another perspective.
Report can be view at:
http://www.taxpayersrights.gc.ca/rprt-ntrm-eng.html
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Alan Baggett – Tax Collector’s Bible