Dealing with the Canada Revenue Agency

Here are two stories that show how important it is to know how much tax you owe and pay the right amount. If you don’t, the government can hit you with heavy penalties.

In the first case, a woman sent a cheque for what she thought she owed. The Canada Revenue Agency didn’t cash her cheque and sent her a big refund in error. Many months later, it demanded repayment, plus interest, even though it had made the mistake.

In the second case, a woman moved around so much that the tax department’s letters went astray. Eventually, she got a request to pay a large amount. She said she would pay in instalments, but after the first cheque was sent, she found her bank account had been drained.

Check out the details below, the kind of cautionary tales that remind you never to get on the wrong side of the CRA.

Author: Ellen Roseman

Consumer advocate and personal finance author and instructor.

88 thoughts on “Dealing with the Canada Revenue Agency”

  1. As we are approaching income tax time, I hope you will agree this story would be of interest to all Canadian citizens.

    I am a law-abiding 88-year-old taxpayer and a former Section Officer for the Women’s Auxiliary Air Force in World War II.

    I am being asked to pay arrears interest for a mistake made not by myself, but by Revenue Canada. The short version of the story is this:

    I filed my 2008 tax return last spring and included a cheque for $832.37.

    Canada Revenue told me I’d made a mistake and sent me a cheque for $3,032.37.

    Eight months later, they wrote to me again to say they’d made a mistake and demanded I pay them $3,437.87, including $113.01 in arrears interest!

    According to Revenue Canada, it is the taxpayer’s responsibility to catch errors made by tax assessors.

    I have escalated my complaint in writing to Keith Ashfield, the Minister of National Revenue, the Prime Minister, the Leader of the Official Opposition, the Liberal and NDP critics for National Revenue and my personal MP. Here’s a letter I sent to Linda Lizotte-MacPherson, Commissioner, Canada Revenue Agency.

    Dear Ms. Lizotte-MacPherson:

    It’s possible the injustice which occurred is due to a computer program. I’m certain any reasonable person would agree that I am being unfairly penalized by the Canada Revenue Agency.

    This concerns two assessments of my 2008 income tax return. The first was dated April 30, 2009 and sent by William Baker. You signed the second one, dated Dec. 20, 2009.

    When I filed my return last year, I submitted a cheque for $832.37, the amount I believed I owed the government. Following his assessment, Mr. Baker determined that I did not owe this money. In fact, he sent me a tax refund in the amount of $3,032.37.

    You reviewed my return eight months later and concluded that your colleague, Mr. Baker, had made an error. You demanded I send you a cheque for $3,437.87.

    If there was a mistake in Revenue Canada’s initial assessment of my return, I understand and accept this money should be returned to the government. What I find astonishing and unreasonable is the inclusion of $113.01 in interest!

    There are two principles involved…

    The first is that the error was made by Revenue Canada, its computers and its assessor, Mr. Baker.

    I am a law-abiding taxpayer who submitted her return well before the income tax deadline, and I attached a cheque which the government rejected.

    Therefore, I’m sure you will agree it is unreasonable to penalize me by charging interest on a mistake which was not mine.

    The second principle concerns the interest rate charged. It is greater than the interest paid by my bank on my savings account. Therefore, Revenue Canada is charging me even more interest than I could have earned on that money myself.

    As there was a deadline attached to the demand that I pay this money, I am submitting, with this letter, the full amount you requested including interest. This is only because I do not wish to be further victimized by your computers.

    However, I am also submitting this formal request that you issue a cheque for $113.01 and kindly send it to me by Feb. 19, 2010.

    Finally, please note that I require a response in writing, not by phone. At my age, it is challenging to comprehend everything on a phone line.

    Many thanks for your thoughtful consideration of my request. I look forward to your response.

  2. I thought you might be interested in my recent dealings with our dear Revenue Canada. I am hoping that my voice will be heard.

    Because of my ex-husband’s work, I moved once a year for over 10 years. For several years, I lived outside Canada and eventually became a non-resident of Canada.

    In the year 2000, I was residing in England and decided that since I was no longer a resident of Canada (and since my husband convinced me), I would dissolve my RRSPs.

    The withholding tax was taken at source and I believed that my tax obligation had been filled. However, it was not.

    The international tax office of Canada re-assessed me in August 2003 and decided that not enough tax was paid. However, they sent the re-assessment to England. I NEVER received it because I was no longer living in England! And from that point, the interest on the tax owed began.

    Well, it wasn’t until November 2009 that I was notified of the taxes owing and by this time, more than 50% of the amount owed was interest.

    I called the tax department to ask why I was not notified. They declared that the moment the letter left the tax office in August 2003, they considered me to be notified.

    The irony is that in 2003 I was living in Canada and filling out income tax returns once more! But apparently, the international tax and normal tax departments do not talk, so the Canadian address was not passed from one department to the other!

    Bottom line is the tax department was unwavering in telling me that the tax was due. By February 2010, even after my pleas to see the re-assessment, I had NEVER been sent the information.

    In January 2010, I spoke with the collection department of the international tax department to see how this could be settled. It was a very high amount and I wanted to see if I could pay it over a period of time.

    I obtained a VERBAL AGREEMENT that I would pay a lump sum by the end of January and monthly payments for the three months afterward. I asked to have this agreement in writing and the tax collector refused.

    I sent the first installment by personal cheque at the end of January. However, this is when the rules of the game changed without notification.

    You see, the tax collector used the personal information on the cheque I provided to contact my bank, freeze all my accounts in that bank and EMPTY all the funds in the account!!! This has to be illegal!!

    I was abiding by the VERBAL agreement this tax collector gave me and then, as soon as he had the first payment, he froze and confiscated every cent I had in the accounts.

    I want all Canadians to be aware of the illegal activity of our federal government. How can a party without nofication empty your bank accounts?

    I have been trying to contact the tax collector responsible for this injustice for days and not once has he returned my calls.

    At this point, I am borrowing from friends to make ends meet. This should not have happened. I had an agreement, was abiding by it, and then the rules changed and the tax department took all my money!!!

    Now I know why GOOD Canadians leave Canada!!

  3. Ellen, here is a response to your query about MW’s situation.

    Canada’s taxation system is founded on the principle of self-assessment. Under our system, the onus is on taxpayers to ensure their tax obligations are met.

    In order to assist taxpayers in satisfying their tax obligations, the Canada Revenue Agency (CRA) provides many avenues for taxpayers to keep informed, including via the internet, telephone, in writing and in person.

    The CRA publishes guides, pamphlets, Information Bulletins and Information Circulars, all of which contain the information necessary for the majority of taxpayers to accurately fulfill their tax obligations.

    The CRA urges taxpayers to immediately update their addresses with the CRA when they move or depart Canada to ensure that subsequent contact is correctly routed to the taxpayer.

    The onus is on the taxpayer to ensure the address CRA has on file is accurate. Address changes can easily be made over the phone, in writing or upon submission of the individual’s tax return.

    For your information, our publication T4056, Emigrants and Income Tax, contains the necessary information for people departing Canada to meet their tax obligations in the year of departure and subsequent years.

    As well, our publication T4058, Non-Residents and Income Tax, discusses the tax obligations of non-residents receiving Canadian sourced income, including the types of income subject to Part XIII, also known as non-resident withholding tax.

    Both publications illustrate that the taxpayer should inform all payers of their non-resident status to ensure the correct amount of non-resident withholding tax is retained from payments, such as distributions from an RRSP, arising in Canada, to non-residents of Canada.

    Non-resident withholding tax is the final tax obligation of the non-resident person to Canada.

    Both of these publications are attached.

    http://www.cra-arc.gc.ca/E/pub/tg/t4056/README.html

    http://www.cra-arc.gc.ca/E/pub/tg/t4058/README.html

    The CRA has a responsibility to safeguard all information given to us by taxpayers. The confidentiality provisions of the Income Tax Act prevent CRA from discussing specific cases.

    Please be assured that a representative of the International Tax Services Office will contact MW directly to discuss her concerns.

  4. Dan White

    Mar 14 2010

    CRA is in no way committed to anything they write about fairness, responsibility, integrity or Communications. They now resort to just plain unreasonableness, unfairness, and spouting of the income tax and excise tax act. Neither of which empowers the right of abuse. I deal with this stuff all day long, it is such a sad story. You can fight CRA, but you really have to know what works and what does not. The average Canadian just wastes their time by complaining. You have to know how to be a pain to CRA to get results.

  5. I must wholeheartedly agree that the tax man/women are the most callous and incompetentent department of the government. Based upon my experiences, they are a dictatorship with unlimited powers and no morals.

    I have been audited 3 years running because a tax collector decided that the existing interpretation of a tax law (their interpretation and their law) was incorrect.

    The ruling was then backdated the maximum legally allowed time by the tax department, so I and several hundred of my colleagues were assessed a trumped up amount with maximum penalties based upon the new interpretation.

    Over 3 years and over a thousand assessments, to the best of my understanding, the CRA has lost every appeal. Why would they continue after losing the first few hundred appeals? Because they can!

  6. I’ve attached the link to my story that’s still on the CBC.

    Not only are the CRA run by a bunch of clowns, but they can destroy your life and not take any responsibility for their actions. Every politician, tax guy from all levels of government will not touch my case with a 10 foot pole.

    Ellen, I want all of your readers to know that this can happen to anyone. They go about their tasks with such reckless abandon that ordinary taxpaying citizens who pay their fair share are seen as villains and often left destitute after being kneecapped.

    There’s also no recourse internally, other than to take them to court to have a judge cite precedents and rule in your favour.

    Another reason more and more Canadians don’t trust government!

    http://www.cbc.ca/canada/british-columbia/story/2009/04/22/bc-taxmistake.html

  7. The story above about AE is astonishing. Did CRA refund this woman’s interest charge? If not, what on earth could possibly be the reason?

  8. CRA made a mistake in my late mother’s income tax return, giving her a deduction to which she wasn’t entitled. I knew that they were wrong and I tried to deal with the matter by mail but couldn’t. Finally, I went in to their regional office in North York and spoke to someone directly about the problem and was able to get the matter resolved. I recommend that you do this; it is easier to make your points in person.

    Also, although the CRA can be exasperating and even stupid, you have to pay attention to your income tax affairs. Check your returns if you have someone else do them, even if they are professionals – they can make mistakes too. Make sure you understand how they were done, what assumptions were made and so on. Keep your address up to date. Know your own financial affairs. Try to do the returns yourself even if you pay to have them checked; it is really not that hard.

  9. I’m a senior. The Canada Revenue Agency, now known as the Corrupt Revenue Agency, has also stolen from me.

    For seven years, they declined to send me all of my documents, so I could get their mess sorted out. However, they started to threaten me. They said they were going to seize my house and contents, and also garnishee my pension. I had to borrow money from a relative to pay the Corrupt Revenue Agency off.

    There are millions of citizens who are in a dispute with the Corrupt Revenue Agency. Their favorite prey is the old and the poor.

    Blue collar wage earners, low income people and seniors should be able to have all their income tax deducted from payroll. And seniors should be able to have the tax taken off by the OAP and CPP. That would be a huge saving for the taxpayers, to get rid of the Corrupt Revenue Agency.

    The system is so complicated and archaic, the Corrupt Revenue Agency staff CAN’T KEEP UP WITH ALL THE CHANGES, and that is what happened to me. If you are in doubt, call the Corrupt Revenue Agency.

    I did so and got a male, who totally gave me the wrong information, since he did not know his job. From 2003 to the present, the Corrupt Revenue Agency lied and denied and I still haven’t got all of the documents. They stole from me, and won’t send the documents, because, it was their mistake, and I was forced by their corruption to pay over $4,800 that I DID NOT OWE.

    The government gets millions and millions of dollars of stolen money. The government gives millions to banks, big business, gas and oil companies, stolen from the peoples’ tax money.

    The corruption in this country has filtered down to every government agency and service. However, it is getting to the point where there are not enough little guys working to support the corruption. There were too many little guys put out of work.

    B.C. Premier Campbell and henchman Hansen went on a taxing frenzy. B.C. is second from the bottom of the poorest provinces in Canada. Many thousands of jobs are lost, and tax revenues are low. So the pair of dingbats, with their budget and the HST, are going to double the numbers of the homeless. Canada is now a fascist country and a dictatorship.

    CTV’s W-five had a very good documentary on April 3rd about all the thieving crimes the Corrupt Revenue Agency commits. When a government allows corruption in their ranks, the country will collapse. The Mafia members used to go to prison for extortion. The everyday citizen would still go to prison. The law of extortion doesn’t apply to the government. Canada is no better than Honduras.

  10. Gloria again.

    I forgot to mention, I took everything to an accountant, but he was unable to straighten the mess out.

    I have taken my papers to different MLA’s. The CRA refused to co-operate. The CRA had my income up to $58,000, if you added every penny I had together, but my income is nowhere near that amount.

    My son and I had made numerous calls for all the documents, and as I said, they refused to co-operate. So, I got hold of one agent, who said she had found 3 errors.

    Since 2003, I still don’t have the correct documents.

    The two most distrusted in Canada are the politicians and the CRA.

  11. Once corruption is allowed in the ranks of the government, it eventually infects all the government ministries. What is the reason? Everyday Canadians know they are being exploited and cheated, because of politicians and the corrupt CRA.

    The corruption is so obvious, a grade 7 student saw through all the lies, with ease. It is corruption, lies and greed that really runs this country and calls the shots.

    Alberta is tossing the idea around to separate from the east. I think all of the western provinces should separate. The first thing to go would be the CRA.

    BC citizens could get rid of Premier Campbell and his entire Liberal government. The West’s tax dollars would remain in the west.

    Jean Chretien said he didn’t like the Western people because they were different. The East have been their own country for many decades. The East would take the West’s tax dollars and the West got only crumbs. A total ripoff.

    Western citizens are sick of the East dictating to the West. At first I was horrified at the thought of separation. However, the more a person thinks about separating, the more sense it makes. Anything is better than the CRA. And, the first corrupt @&& would go to prison, where they belong.

  12. My problem with CRA is that they have been taxing me on the child support that I am receiving since 1997. I have been to family court in 2003 and 2008 to update the support and but CRA insists that the support is still taxable even though a 1997 law passed that child support was not taxable to the recipient. My children and I have had to go through rough times, I have been on welfare, gone to food banks, gone through bankruptcy because I can not make ends meet and they have been taking the child support that I receive while giving the support payer a tax break. They are ignoring the family court judge order which clearly states that the support is based on a table and therefore not neutral. They state that CRA preceeds any family law court. So I would like to know, instead of going to family court to seek child support should I have instead gone to CRA to seek child support? Shoul I have asked CRA to determine what my child support was I entiled to receive? Where are my rights? My children’s rights? While CRA employees make huge salaries my children had to stand in line at the food banks and shop at Goodwill for clothing. CRA keeps giving me the run around each time I call them, they lost my tax return, they did not receive my fax, they sent mail to the wrong address and the list just goes on and on. Is there any way that I can take CRA to court?

  13. I have a hard time understanding how they can willingly destroy peoples lives. If someone is poor and they can not pay (with proof) then I can’t see how the government would happily put someone on the street and possibly committing suicide. What civil servant would stick their hand up and admit to forcing someone into complete poverty? I’ve never heard of that. It would be a major political disaster to the government in office not to mention a few terminated CRA employees.

    There is a difference between someone who can’t pay and someone who won’t pay. I would think someone in government would have some semblance to understand the difference. One would only hope.

  14. My 2008 spousal support claims were denied because I did not submit receipts. I submit bank statements, since Ex is out of the country, as proof of monthly payment of spousal support. The bank statements are refused.

    Wife returns to country and she submits receipts. Claim accepted.

    My 2009 spousal support claims were denied because I did not submit child support receipts. Spousal support receipts are appreciated, but unless child support receipts are submitted, the expense claim is denied.

    What’s the difference between 2008 and 2009? Arbitrary decisions with no recourse.

  15. I am another victim of Revenue Canada and their decisions to apparently victimize certain individuals. I have almost completed my 3rd audit in the last 7 years.

    During the first two, Revenue Canada actually wrote me a cheque because I had missed expenses. This time, they provided me a list of “unexplained” income directly from my business account deposits and asked me to pay tax on it.

    Would you be surprised to hear that they are so incompatent that they didn’t even realize that the amounts were from previous years’ returns and cheques from Revenue Canada themselves?

    They also claimed to have a document from a paper that applies to a court case that I “apparently” tried to claim expenses on. It’s not my case but a family member’s litigation and my legal claim was from an entirely different situation. They do NO homework at all.

    I have been forced to incur both legal and banking charges to show proof of income and defend myself. It’s a joke.

  16. Hi Ellen, they are claiming I owe them $8,000 and they need it in 20 days or else.

    In reality, CRA is not the problem, it is Canadians themselves who are to blame! We must get off our armchair politics and overhaul our governments and these draconian tax laws.

    The Queen is no longer collecting monthly ransoms! The people need to shake up the system.

    Kick out the corporate-controlled governments in Canada and create people-centred systems. Then cut income taxes to zero. Let governments raise revenues from resources and sin taxes. No money to corporations!! That is the only real solution.

  17. After having read all of the above and in addition to the many sad and very disturbing stories about battles with the CRA and the Canadian Government my only comment is this;

    We Are Not Taxpayers!

    WE ARE ALL FIRST AND FOREMOST HUMAN BEINGS AND CANADIAN CITIZENS who happen to pay taxes. Think hard about this because there is a distiction.

    The federal government and their bungling crew of criminal thugs, namely the CRA, has brainwashed us all into believing that we are owned property of the government and our soul purpose is to be \taxpayers\.

    Nowhere on any document in my possession identifying me as a person and Canadian citizen does it also identify me as a \taxpayer\.

    It is the most important distinction that Canadians must understand and protect with their lives.

    As long as the Government believes we are all just a bunch of slave driven taxpayers, it will continue to violate humanity and to urinate on the graves of our fallen.

    Wake up Canada, get a grip!

  18. My husband has made every single support payment to his ex since they split. Vindictive as she is, she gets to refuse to send a letter to CRA stating that she has received the support payments (which my husband claimed on his income tax, as is his right under the law) and thereby prevent him from receiving credit for them on his taxes.

    What does the CRA have to say about this? They just keep repeating the same tired garbage about how the ex should be able to be trusted to vouch for his payments.

    What planet are these people from?! The only system in Canada as corrupt as the CRA is the Family Court System, and possibly even more so!

  19. First of all, I am not a writer so bear with me in relaying my experience with CRA over the past 2 years.
    To give a little history first, I am a dedicated father of two boys aged 18 and 14. I was separated in 2005 and fortunate enough to come to an agreement with my ex-wife on a 50/50 custody agreement.
    Because both of the children were under 18 at the time (13 and 9)I claimed for one child and my ex-wife claimed for the other.(Totally acceptable).
    My ex-wife received the child tax credit of which I was entitled to 50%. I chose not to enforce this as the mother took care of shopping for school supplies etc so I thought it only fair that she receive 100% of this monthly payment.
    That was a mistake !!! CRA decided that since I did not claim for 50% of the child tax credit, I must not have 50% custody !! Yes, they are that stupid!!!
    I have provided more than enough documentation to support my claim (court documented custody agreement, birth certificates, letter signed by both my ex-wife and myself outlining the details of the 50/50 custody agreement,and my court documented divorce (2009) agreement also outlining the custody agreement……still not enough !!!!
    I’ve had my bank account frozen on 2 occasions since then (which made my life very difficult in caring for my 2 imaginary children!!)
    I don’t know what to do next and would really appreciate any help from anyone experiencing similar trouble with our dictatorship government. Seeking legal advice is next but of course that is not free and as you can imagine, looking after 2 imaginary children (according to CRA) is financially taxing.

  20. Thsi book is a must read for every Canadian tax payer

    I Just finished reading an incredible book called the tax collectors bible…written by a former tax collector, who worked for CRA for 8 years.
    It exposes all of CRA’s dirty tricks, how they break all sorts of laws and shows you how to beat them at their own game..you will never fear the CRA again. the book contains over 400 pages of never before published information that every Canadian taxpayer needs to know. The information was so incredible I feel compelled to share it with everyone.

    http://www.taxcollectorsbible.com

    Happy Reading

    kevin Jordan

  21. Why are we not addressing the fact that federal income tax is unconstitutional? There are people that are challenging the CRA and winning.
    It is illegal for the CRA to go into your bank account and take money. The CRA is a third part entity and therefore I would be illegal for them to take your money. Challenge them and you will win

    If we the people as a mass challenged the government, we would win. What the “government” is doing is highly unconstitutional and needs to be dealt with.

  22. If you owe Revenue Canada but don’t have any money in your account but you DO have RRSP in your accounts, can Revenue Canada take those?

  23. I read all these stories and just makes me hate our government more and more.

    What’s funny is when the tables are turned none of their rules or conditionw apply.

    CRA has owed my parents over half a million bucks for over 13 years now. They fully admit that they owe this money every time someone talks to them but when it comes time to shell out they have unlimited excuses why it hasn’t been done.

    Funny how when you owe them they take everything you have, but when they owe you it is not their concern and you can just sit and wait till you die as far as they are concerned.

    I am a young person in Canada and trust me I won’t be staying here after I have seen how crooked our government is.

    For this reason, I will never have a legit job because I will NEVER pay them one cent in income taxes!!

    Wish you all luck in dealing with the most crooked group of organized crime in the world, which is the Canadian government!!!

  24. Because of some terrible situations that happened in my life, almost ending up on the street, much of my tax information was lost. However, I do owe money, according to the CRA.

    They ended up closing up my bank account (my only account) of $98, which apparently goes on for a year.

    I married 5 years ago, but all of these issues happened before this. Now they sent me a form, asking for my wife’s bank account information.

    In her account, she receives her disability cheques, plus monies she received in a settlement for pain and suffering. Once I do this, will the CRA then drain that account and leave us both on the street?

    I have been looking for work for over a year, but with my credit gone bad (although I started to pay that up to date before all of this), and now, with no bank account, they call ask me for money.

    I told them I can borrow a few hundred from family, but that’s all. Once I give them my wife’s account (and she had nothing to do with what happened to me), are they going to drain her account and leave us penniless and unable to pay rent?

  25. I don’t work. I haven’t worked after getting pregnant and giving birth, and only my husband does for an annual amt of 38000 which is not enough to cover our bills. Got a letter from CRA saying that we owe them and for that reason they stopped giving any child benefit to my daughter. Its been 4 months now and when we call them, they keep saying call on another day. What can I do?

  26. I inadvertently failed to report income from a T4A which I did not receive. This was a result of the withdrawal of a pension amount at the time I was terminated in 2010. I am still unemployed.

    I realize that it was my responsibility to report this income regardless of whether I received an information slip or not. However, when I was preparing the return I was struggling with depression – I still am – since when I became unemployed, I discontinued the use of antidepressants.

    The majority of the amount I owe the government is penalty – it is greater than the tax I owe. I am still unemployed. I feel devastated by the assessment I received today.

    I am struggling both emotionally and financially currently, and just feel defeated by life.

  27. The CRA are the cruellest government agency in all of Canada. My experience with them caused me to lose my home, my health and forced me into near bankruptcy.

    I was a single mother with three teenagers and working in the health care profession, earning $37,000 a year, in 2004.

    I received an award from Canada Pension Plan for $30,000 for survivor’s benefits for myself and my children, whose father had died five years previous to 2004.

    Less than one third of that income considered spousal benefits was taxable. The other two thirds was allocated to the children and deemed non-taxable.

    I took my return to a competent bookkeeper who had filed my returns for years without issues. We included all the documentation I had received, including a statement from CPP of the breakdown of payments and the advisement to which we were refiled taxes for those affected years.

    The CRA decided to tax me on the full $30,000 plus my earnings, which put me into a higher tax bracket and sent me a bill for $9,000, with interest incurring, which was actually somewhat higher than the total portion taxable of the $30,000.

    They also seized all federal payments to me, including family allowance and GST refunds.

    We appealed the decision, but with the process being long and arduous, they decided to garnishee my wages by 50%. After explaining that this would put me into bankruptcy and I would lose my home, they offered to reduce the garnishee to 47% of my earnings.

    When I told them that the whole matter was under appeal and would probably be reversed, the agent said, “You haven’t won it yet, ma’am.”

    This went on for over six months. I became very depressed and was admitted to a psychiatric unit for two weeks, then on stress leave at work. Eventually the bank foreclosed on my home.

    The CRA had no concern for the disastrous dilemma they placed me in. Within a month later, I had won the appeal, based on the reasoning that the money received from Canada Pension was for payment owed to my family for the past five years and that the children’s portion was considered non-taxable during those years and shouldn’t be included as taxable income.

    Also, it was decided that all my returns for those years should be adjusted to include only my spousal portion of the award for those years.

    I refiled and after two months, they issued me a cheque for what they had garnisheed and for what they owed me in refunds for those five years, minus the interest and penalties they charged (money they were not entitled to and had no right to collect).

    They offered no apology nor restitution for what they had done. I haven’t had a hassle-free year with them since, nor have I had a refund.

    I have learned from my experience that there is no real beneficial recourse in dealing with the CRA.

  28. I was in a motor vehicle accident in Finland and received compensation as a result of injuries for loss of earnings potential.

    According to Canadian law, this would be tax free, but I was charged $80,000 tax in Finland, even though I was given a choice to pay taxes in Canada.

    I have read tax laws online, including the international agreement, and all I see is that it is totally wrong what was done. I an receiving a structured settlement and tax is being taken off in Finland every month.

    Who do I contact to have this injustice taken care of? Is there a government office that helps the public in these matters?

    There seems to be a lot of government offices making sure we pay our taxes, but is there a government office that actually helps us, the people in these matters of injustice like mine? WHO DO I TURN TO FOR HELP?

  29. Hit with a CRA assessment? E-mail me for 3 documents I have created to respond to such acts by CRA.

    All my template documents are totally free of cost, as is anything on my website. Or, you can request my 2 zipped folders containing many templates and info documents, as well as examples on how to file a $0.00 tax owing T1 ‘return of income’.

    To learn how you became a slave, download my Name Game Blog from my home page. Again, no cost.

  30. I am 54 yrs old. CRA wants back taxes. And yes I do owe that. But now the fines have put the amount to an unreachable level.

    I refuse to live my last years as a homeless person. Suicide is the easiest solution.

  31. “Canada’s taxation system is founded on the principle of self-assessment. Under our system, the onus is on taxpayers to ensure their tax obligations are met.”

    And with this system that is impossible to understand, except by a lawyer who has gone to school for many years, it is easy to make mistakes if one does not have an accountant, who also has schooling to understand this system.

    This creates a very slippery situation, so the taxpayer never knows where they stand. It’s how citizens can get taken advantage of to pay so much money by mistakes, made either by themselves or by the CRA.

    The tax system in Canada is like climbing a very high snowy rocky mountain, wearing only flip flops and a rain coat.

    It appears that the system is set up for mistakes to be made easily and for fines and penalties to be imposed easily also.

    It should be made simple, so the average person and business can file their own taxes, and be able to do so correctly. This would require honesty and integrity in the system of government and collections.

    The CRA is stealing liberty and making those it picks on slaves because these fines are impossible to pay.

    Allan, I am hoping you are doing better and not letting these thieves rob you of life and the joys.

    I think perhaps we need a support group for those in hardship and mental anguish caused by the CRA.

    Also, it should be mandatory for CRA agents who call to reveal their names at the beginning of the call, as is done in many customer service professions.

  32. I am a 37 year old single mom of two teenage children living at home. They are fully dependent on me. One of them is constantly ill with a compromised immune system and has been diagnosed with fibromyalgia.

    Revenue Canada froze my bank account this week because I owe approximately $14,000 in taxes, most of which is accumulated interest.

    I have repeatedly filled out the required paperwork to show I don’t have the finances to pay the money back due to my debt load.

    A good portion of this has been accumulated trying to raise and care for my 2 children when their father would randomly stop paying child support over the years. He currently owes over $6,000 in child support alone (he just recently started paying back some of what he owes) and this doesn’t include the $30,000 in spousal support he also owes.

    I am unable to obtain a loan fom the bank and do not have any extra $ in my monthly budget to pay this $14,000 immediately.

    As of now, I am awaiting a refund of $1,356 for my 2010 taxes. I filed my 2011 taxes last night and am awaiting a refund of $11,022, because I claimed over $25,000 for moving expenses to go from ON to a job in AB.

    The employee assigned to my account (Bill Peake) has been completely disrespectful and very rude to me every time I have spoken to him. He’s refusing to unfreeze my account, effectively leaving me with no way to support myself or my children, with a rent cheque due within days.

    I have sent him a letter from my bank showing that I cannot obtain a loan, the submission packages for both my 2010 and 2011 taxes showing the refund amounts, proof from CRA showing that both have been submitted, my credit report and my monthly budget spreadsheet detailing my income and expenses for each month.

    I have even offered to pay $100 a month to clear up the remaining balance, even though I don’t have an extra $100 a month in my budget right now.

    His response has been that I have two choices: Borrow $14,000 from family to pay this now (impossible) or wait for the assessments to be done for my taxes, which could potentially take months, especially with the moving expenses claimed.

    He has stated, in no uncertain terms, that he is NOT taking the freeze off my bank account unless the $14,000 is paid immediately.

    I have repeatedly explained to him that my children and I will lose our rental home. I will be unable to pay my debts or utility bills or buy groceries to feed my family or bus passes to get me to work or my son to school without access to my bank account.

    This means I will lose my job and will end up in an even worse position financially, potentially ending up on financial assistance from the government to support me and my children.

    He has made it very clear that he doesn’t care. His exact wording was, “I’ve heard this story all before and I don’t care, it’s not my problem. Pay what you owe.”

    I don’t understand the logic here. I’m a responsible taxpayer with a good job, supporting three people. I lose this job and I am no longer a taxpayer, and then I REALLY cannot pay any of the outstanding taxes owed.

    I’ve given him more information than was ever necessary to show my situation. I’ve proved that I don’t have the funds to pay it and that the majority of it will be paid by my refunds. Yet that money is exponentially more important than the lives of me and my children.

    And the best part? Today I asked to speak to his supervisor and he said, “She’ll call you back when she has time” and hung up on me.

    Nice to see that our government cares so much about its citizens. I wonder how much they’ll like it when they are supporting me and my children?

  33. My spouse owed about $5,000 in taxes back in 2008.

    In 2009, he was injured during the course of an assault (no fault of his). The accused person was found guilty, but no sentence yet.

    My husband has been unable to work since the end of 2009 and rev can just kept tacking interest and penalties to the tune of $14k.

    We sent in proof of injuries and medical reports to prove what happened and that he is not working, hoping to get taxpayers relief. They didn’t reply.

    Today, an agent called and said he’s going to put a lien on our house and garnish our wages. What can we do? No wonder people in the states keep harming themselves.

  34. @ Broke Victim…call your MP and see if they can step in on your behalf. It seems like you have a good case for interest relief and they may be able to help you there.

    In some cases I have read, the MP will actually negotiate on your behalf to help.

    Do not just file this with the tax collector calling you. It may or may not be filed properly.

    A properly filed fairness assessment will be looked at by CRA and responded to.

  35. I owe back taxes and fees of about $16,000 and the CRA has just froze my Canadian bank account (which contains only $200).

    I live and work in the US and have a bank account in the US.

    Can the CRA freeze my US bank account?

  36. I filed my taxes in 2007 claiming $5,000 of RRSPs.

    Since then in 2009 i received a $1,000 revised RRSP income from line 129 which was reassessed after receiving my refund for that tax year.

    This resulted in a $122.09 balance owing for 2009 (no big deal). This resulted in losing partial GST refund cheques

    Then last year i file my 2010 taxes, receive a refund then again there is another reassessment.

    This time stating $3,437 RRSP income from line 129 was applied resulting in a $1,279.61 balance owing.

    I am baffled to why i received no notices in the mail stating penalties were applied, not have penalties applied first then receive a refund (if any amount is left) and i’m certain RRSP income is applied to the next tax year not over multiple tax years.

    Is all this correct? Or should i dispute the fact in sending all my paperwork to the CRA for review?

    Thanks for your time.

  37. Hello,
    I am presently doing 2 jobs and because of this my tax bracket is higher. I am presently owing 24,000. to CRA. Yesterday I received a form asking that I enter all my assets and liabilities etc. I am unsure of what they will do next. Can you please explain what will happen. because of my monthly expenditure I am unable to pay more than 500. per month Please advise.

  38. So many ignorant, misinformed and exaggerated comments. Half of these comments are not telling the full story. I know for a fact that CRA will never garnish you or put a lien on your house BEFORE FIRST ATTEMPTING TO CONTACT YOU. If you didn’t keep your contact details with them up to date, is that their fault? What other course of action do you suppose they take if they have no other means of contact.

    Also, there’s a lot of you giving stories of being injured, ill, etc. have you ever heard of taxpayer relief? Apply for it.

    As for those of you saying that half of what you owe is attributed to penalties or interest, you’ve obviously owed CRA for a length of time as that doesn’t just accrue over night. It’s not CRA’s fault that you have failed to attempt resolving your financial issues.

    To the people saying that our government is corrupt and one of the worst governments, you need a reality check. Maybe you’d prefer to live in a third world country. If you don’t like the way the country is run, leave or attempt to change something. And not by posting exaggerated, misinformed comments on the Internet.

  39. According to Alan Baggett – author of The Taxcollector’s Bible – and a former CRA collector himself. Privacy breaches happen all the time in the CRA offices. Balance owing is often revealed to branch managers of banks, sometimes information leaks to creditors and they recall loans on the tax debtor. Contacting your clients for payments is another breach of the Privacy Act. So what Alan is saying is that CRA tax collectors are above the law. I highly recommend you buy his book! http://www.tacollectorsbible.com

  40. Well… after reading several comments, especially Jared’s, I decided to post a brief version of my story.

    In 2006, I was injured at work and have since been unable to resume my job. It took almost two year before the Workman’s Compensation accepted my accident claim, but since my employer was the Provincial Government and a self insured employer, they were responsible to pay my wages.

    So my employer gave my two year salary in a lump sum, creating a frustrating scenario where I was paying on higher tax bracket for that year, while in reality that money did not even stay in my pockets because I had to reimburse EI, LTD, etc.

    Then in 2009, they ended my employment and I was forced to apply for CPP disability, which, in turn, sent me another lump sum and I had to reimburse my employer.

    Anyway, skipping the details here, I’ve presented my complaints to the CRA, which confirmed that I was a victim of the system and there was not much I could do.

    In 2010, I got information from CRA stating that I could have applied for tax relief from 2006-2010. They provided the forms, etc.

    I gave that information to an accountant firm with all my documents and they filed for a tax credit, as CRA indicated. Yet in May 2012, I got a letter in the mail and was shocked to find out that CRA found mistakes in my files.

    I called to get explanations and was told that I did not qualify for tax credits in 2006-2007-2008. They had received wrong dates about my disability.

    When I asked who gave them the wrong info, they said, “Don’t worry, it’s not you that made the mistake. We are not at fault either. It’s Service Canada that provided the wrong dates and that’s an unjustified mistake, but now you need to reimburse those amounts.”

    They say although I’m disabled since 2006, the Governement of Canada only recognised it starting August 2008. Therefore, I must reimburse the amounts obtained for 2006-2007-2008.

    This is very upsetting, because I remember calling them after I got these amounts, asking if they were sure there was no mistake. I went to the accounting firm and asked if it was correct and everyone reassured me, “Don’t worry, this is yours to keep.”

    So I gladly used up that money to pay for my medical treatments. That money is long gone and now they want me to come up with a way to reimburse it. Seriously? That’s absurd!

    I double checked and triple checked and everything was fine… but now it’s not? How am I supposed to come up with that money now?

    It’s the CRA that told me to apply. They approved it and now they tell me someone else made the mistake and I have to pay for that mistake.

    I have my disability to worry about, along with my medical fees. Why don’t they own up to their mistake?

    That money is long gone and my finances are already suffering because of my health. I can’t possibly deal with more financial stress. I don’t know what to do.

    I feel I should not be responsible for this.

  41. @Colette: So it turns out that you do owe taxes. Yet, because you spent the money, you feel that it’s ridiculous that you have to pay it back?

    If you owe the tax, I fail to see why you shouldn’t have to pay it back just like everyone else.

    The sense of entitlement some people have is ridiculous. A disability tax credit is a privilege. There are countries in this world where you would get NOTHING for being disabled, yet people still complain.

    If you don’t want mistakes to happen, don’t utilize tax credits and pay your full amount of taxes.

    Again, tax credit are a privilege. You can’t have your cake and eat it too.

  42. I was sent a reassessment stating I owed 504.06, based on a CPP disability overpayment.

    I called CRA, as the cause seemed to be originating from my pre and post bankruptcy for the year 2010. They also said I owed an additional $347 for rebates.

    Apparently, the phone agent recalculated everything and told me they owe me money, $206. I should not pay the amount they say I owe (for the overpayment is incorrect) and the pre-bankruptcy file.

    They state they didn’t have (they do), so not to worry about the $347.

    Do I wait and see if this gets rectified? Should I contact a parliment member? With all these horror stories, I’m very concerned. Please advise me.

  43. I am president of a small non profit. We had a GST number but had it discontinued with the approval of CRA as of November 4 2011.

    Although the GST office owes the club money they have refused to pay due to non compliance. I sent in a letter asking what is the non compliance and asking that they pay the money owed.

    I received a letter back saying that the department which received the letter was not the correct department for my complaint and I should call a certain number.

    I called the number and was told that GST number was reinstated due to my request as of May 8 2012. I told the person on the phone that I did not request the reinstatement of the GST number.

    I informed her that someone from GST called me on 2 occasions harassing me to get the GST number reinstated but I told them that I had no desire to do that. This agent passed me off to another agent who said that the number was reinstated because the club’s income was above the $30,000 threshold.

    I told her that it was a non profit club and that the GST office was well aware of it, and the threshold for a non profit is higher and has certain exemptions. I told the clerk that the club is below the treshold for non profits.

    The clerk insisted that the she had no knowledge of the club being an approved non profit. All my dealings with revenue canada over the years have been on that basis and in a fax I sent to Revenue Canada on November 15th 2011 I made it very clear that the club is a non profit.

    I sent another fax to rulings 306-652-3211 today July 11 2012 asking that the GST number be discontinued back on the original discontinuation date of Nov 4 2011 and asked them to send me the money owed. We will see what happens.

  44. RESDIENCY STATUS AND TAX FREE SAVINGS ACCOUNTS:

    I left Canada permanently with my husband for a job in the United States in at the end of 2009 and filed the NR7 non-resident paperwork in 2010 which was accepted.

    I also sold my house in Ontario april 1st, 2010 and therefore 25% of the gross selling price -would not be released to me as I was a non-resident at the time of the sale and this mess with the canada revenue agency took until the end of 2011 to resolve and for our money to be returned to me without interest.

    They are still asking me to put in installments although it is clear that I am a non-resident.

    When I sold my house in April 1st, 2010 I wanted to consolidate our banking accounts and close down my Canadian accounts and met with my bank manager. The bank manager knew I did not live in Canada and suggested we both open tax free savings accounts in March 2010 and we had no canadian address so he opened these accounts with our USA address knowing we were non-residents and deposited 10,000 dollars into each account.

    We kept depositing 5000 dollars in 2011 and another 5000 in 2012 without any notification that we were not supposed to have these accounts as non-residents by our bank manager in canada.

    They sent a letter asking my husband to file 2010 taxes a few months ago and we sent in the NR7 again and indicated he was a non-resident as of December 31st, 2009.

    My husband just got a letter indicating that he should not have put 10,000 dollars into the tax free savings account as a non-resident in 2010 and therefore there is a 1% penalty per month on putting money in over exemption and 1% per month as a non-resident penalty which is a total of 1800 dollars.

    As we continued to do this in 2011, this will then be a 3600 dollar penalty in 2011 and subsequently a 2400 dollar penalty in 2012 – for a total penalty of 7800 dollars for each account, and 15,600 dollars for both accounts which is about 45% of the money deposited over 30 months.

    We have asked today that my bank manager empty out these accounts immediately. My bank manager has pleaded ignorance and told me it was my problem that I was not aware of the rules when opening the accounts.

    Canada Revenue has indicated that we should write an appeal letter but that is all we can do and likely it may be best to pay upfront and appeal it later to avoid interest charges on the amounts.

    Is there any success in doing so? Is there any chance of success? This is obviously a really huge error and poor advice that we received.

    Very stressed. any advice greatly appreciated.

  45. The problem/resolution dept of CRA took on my case and I was told I owed nothing. Now my GST/and Trillium benefits are cut off.

    Further, CRA did another reassessment and issued me a cheque of $279. Now I’m being told I will owe them $237, based on new information. I am told my case is very complicated. They also have CPP disablity starting on the wrong date.

    Therefore, Service Canada is to blame, they say, and also my trustees who filed my income tax-2010-pre and post bankrutpcy. Just when I thought everything seemed resolved, it isn’t.

    One thing for sure is that CRA does not state they are to blame. I’m confused and worried since I am not in good health and the story keeps changing. How complicated can it be??

    I guess I’m going to have to contact my trustees so they can direct me and whoever else to get this mess sorted out once and for all. It is as though one is lured into a false sense of security (it’s being handled), only to discover new twists and turns.

    Lots of paperwork and lots of stress over something that should be very straightforward. I’m not sure who to contact on my behalf. This is really unfair and worse. Affects mental health and security.

    The CRA does not care about this, only juggling dollar amounts. When the CRA screws up, the taxpayer gets penalized and the poor.

    Really upset and want a final resolution. Would like to have my rebate cheques reinstated as well.

  46. @jared

    CRA has assessed me $289,000, based on what my previous years earnings WERE. They have put a lien on my home, and whatever else they could.

    I have done as they have asked to this point. Cost me $12,000 to have my taxes prepared. They accepted all the paper work… whoops, on their part, it showed they owed me somewhere around $18,000.

    They have now demanded all the books be done again and the tickets from the calculations be shown. That has been done. Still, I wait.

    The accountant is not sure what they are doing now. Dragging their feet?
    So now I am not sure where I am to go. But it is getting close to go over the edge. Bankruptcy may be the only option.

    To be fair, the tax problem was my fault to start with. They contacted me. I did as they asked and they still put a lien on my house. So they do put liens on home, even if you comply with their demands.

    I would really like to get on with life. If that means filing for bankruptcy, then I guess that is what I will have to do.

    Everything filed last year in March. A year and half later, I am still waiting.

    So jared, how is this fair? CRA does not play by any set of rules they don’t make up.

  47. Hi,

    I have a question regarding CRA’s ability to garnish payments received under an insurance policy (e.g. auto insurance).

    A typical auto insurance policy will cover medical/rehabilitation benefits, income replacement benefits, and attendant care benefits.

    Can CRA just garnish these benefits?

    I have heard that CRA can garnish pretty much anything they want. Is this true?!!!

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