# Owe near 17K in taxes and didn't file 2011 Return



## Addy (Mar 12, 2010)

I owe nearly 17K in income taxes due to a pension payout resulting from the death of my father. I have been psychological screwed up since his death, I didn't even want to cash the cheques for the life insurance or pension but my family took me to the bank and made me do it, months after receiving the cheques.

I haven't been to see a psychologist but I know I'm having issues resulting from the death of my dad, things like procrastinating when it comes to anything to do with his affairs. I have unpaid bills of his I need to pay but don't want to because it reminds me he's dead.

Today I realized after listening to a radio announcer mention yesterday was tax due day that I haven't filed. And 5% of 17K is a lot of money. I'm wondering if CRA has any leeway in circumstances like this? Or will we simply be out the money and thats that? I know the year we lost our daughter I didn't file because I was grieving too badly (we lost our daughter in March, my dad passed last August) but I had a refund so it didn't matter, there was no penalty for my filing a year later.

I hate to phone CRA and ask, just though thought of asking makes me cry. I will try a google search and see if there's any thing I can do to avoid the penalty, but I'm hoping someone here may be able to answer my question (someone in the know please as I am not in the state of mind to deal with opinions, hope that doesn't tick anyone off).

Thank you.


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## MoneyGal (Apr 24, 2009)

Yes, there are taxpayer leniency provisions. CRA can reduce or eliminate penalties and/or interest. I'll find the link and post it for you; wanted to get this response up ASAP.


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## MoneyGal (Apr 24, 2009)

ALSO: one quick solution is to simply pay what you think you owe (or a little more to create a buffer). You could pay it online, today, without having filed.


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## MoneyGal (Apr 24, 2009)

Here you go: taxpayer relief provisions: 

http://www.cra-arc.gc.ca/gncy/cmplntsdspts/cnclwvpnlty/crcmstncsrlf-eng.html

Note that a death in your immediate family is considered an extraordinary circumstance for which leniency is merited.


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## kcowan (Jul 1, 2010)

Who is doing the final return for your dad? If he died after July 1, you have until June 15 to file his return. Also you have one year after his death to settle his estate (normal course). So there is lots of leeway.


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## MoneyGal (Apr 24, 2009)

It isn't his return; it's hers.


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## Four Pillars (Apr 5, 2009)

All I can say is I'm sorry for the extremely rough time you've been through. I hope the CRA can understand.


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## CanadianCapitalist (Mar 31, 2009)

Really sorry to hear about your situation. I'll second MoneyGal's suggestion. Make a quick and dirty conservative estimate of what you think you'll owe and pay it right away. Then file your returns and apply for taxpayer relief.


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## Addy (Mar 12, 2010)

Thanks everyone, this really helps me a lot. I took MG's (and others) advice and paid what I think is what will be owing online via my bank (TD). The link MG posted was very helpful, but it doesn't state how to let CRA know about my fathers death, should I just phone them? I am thinking of sending a letter, mainly due to fear of breaking down on the phone and blubbering incomprehensibly on the phone.


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## OhGreatGuru (May 24, 2009)

This sounds like a bigger mess than you lead us to believe.

The executor of your father's estate is responsible for notifying CRA and filing Final Returns for your father. If you are executor, then you have a lot of catching up to do. As soon as you call CRA they will send you a package on how to file a return for the deceased. If you are overwhelmed at the thought you can hire people to do do most of the executor work for you, but at a price.

If your father died intestate (without a will) the province will appoint an estate trustee if no family member is willing to volunteer. But someone needs to notify them.

it is not at all clear to me why you would have any tax liability for a pension payout from your father. You should probably consult a tax advisor - or at least write to CRA explaining where the money came from and asking for direction as to whose income it is. If there are any taxes due they would usually be due from the estate. Inheritances are not generally taxable to the beneficiary. Of course, if there are insufficient funds in the estate to pay the blll, you may have to write a cheque back to the estate to cover it. But the due date would not be April 30 - it would be whenever the Final Return, and possibly subsequent Estate Returns, are due.

*PS Correction*: If the pension payment was a death benefit it likely is taxable in your hands. See pp.8 & 12 of CRA T4011, and CRA IT-508, _Death Benefits_. PSSA death benefits are an exception - they are treated like insurance payments. CPP death benefits are taxable to estate. Sorry for the confusion. If this is indeed taxable in your hands most of my comments above are non-germane.


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## Addy (Mar 12, 2010)

This is my tax return, not the estate. Sorry i thought tjat was clear.


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## OhGreatGuru (May 24, 2009)

OOPS. My bad. See the correction I added to my post. If the pension payment was a death benefit it likely is taxable in your hands. (I should know better than to rely on memory before looking it up.)


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## MoneyGal (Apr 24, 2009)

Addy. Once you get your NOA (when you eventually file your return), THAT is when you write CRA back and ask for leniency regarding any interest and penalties. In my experience, they will waive both in your circumstances. Don't phone them - now or ever - there is no one who can help you *with this* on the other end of the phone. 

(((sending internet hugs)))


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## Addy (Mar 12, 2010)

Thanks MG. My husband read on the CRA sit that, as it turns out, if you e-file you have an extra few days "in case you have problems submitting electronically". So I think it will all be fine, but it's good to know I can request any penalties be waived in the case of my dad passing just in case CRA does assign a penalty.


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## marina628 (Dec 14, 2010)

Sorry to hear about your loss Addy


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