# CRA Nightmare!



## dogleg1 (Jul 4, 2016)

I am representing my son over 'unpaid business taxes'. There is an ongoing dispute over tax monies owed in two of fifteen tax years. The last thirteen years had refunds due but were held back over the first two years in dispute. My search revealed an accounting error in the first two years such that refunds were due there too. All the CRA late penalties absorbed most if not all of the refunds due. I appealed this explaining that there was never any taxes owed in any year, however, the appeal group has 'gone dark' and I have had no replies for months. What should I do?


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## ian (Jun 18, 2016)

delete


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## Ukrainiandude (Aug 25, 2020)

That’s how CRA runs, they get bribed by large businesses that minimize taxes and never get properly audited 
instead CRA goes after small businesses who can’t effort to pay bribes 
Deeply corrupt agency.


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## Ukrainiandude (Aug 25, 2020)

*The Canada Revenue Agency is rotten to the core. Time to clean house.








The Canada Revenue Agency is rotten to the core. Time to clean house.


If Al Capone had lived in Canada, he might never have seen the inside of a prison. After authorities in Chicago tried and failed to prosecute the notorious 1920s gangster for murder, racketeering and extortion, the U.S. Treasury was brought in and Capone was charged with tax evasion.




ipolitics.ca






http://www.spiegelsohmer.com/content/uploads/2019/10/Canadian-Taxpayer-Vol41_No20-Linked.pdf


*


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## 307169 (May 24, 2015)

Not everything is a conspiracy theory, please try a simpler explanation first.

Big businesses can hire armies of lawyers and accountants to do their bidding, which make collecting tax from them an expensive and time-consuming endeavour, so CRA avoid auditing them, as they can get less tax back as a result.

Is it fair ? Of course not.


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## Numbersman61 (Jan 26, 2015)

My advice is that if you have a business, engage a professional accountant. The Original Poster’s comments indicate that he is personally trying to resolve errors made many years ago. Not enough details provided but my feeling is that he’s just wasting time. Why someone would not use professional assistance when dealing with the Appeals Department Is mind boggling. This was your last chance - you blew it.


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## dogleg1 (Jul 4, 2016)

Numbersman61 said:


> My advice is that if you have a business, engage a professional accountant. The Original Poster’s comments indicate that he is personally trying to resolve errors made many years ago. Not enough details provided but my feeling is that he’s just wasting time. Why someone would not use professional assistance when dealing with the Appeals Department Is mind boggling. This was your last chance - you blew it.


As John Wayne would say Go Far Yonder pilgrim. G F Y


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## dogleg1 (Jul 4, 2016)

dogleg1 said:


> I am representing my son over 'unpaid business taxes'. There is an ongoing dispute over tax monies owed in two of fifteen tax years. The last thirteen years had refunds due but were held back over the first two years in dispute. My search revealed an accounting error in the first two years such that refunds were due there too. All the CRA late penalties absorbed most if not all of the refunds due. I appealed this explaining that there was never any taxes owed in any year, however, the appeal group has 'gone dark' and I have had no replies for months. What should I do?


This CRA story never seems to end and they have a long list of rules and time-lines that you must follow. CRA refused to let me reopen the 2004 tax file due to certain time rules but they did allow the reopening of the 2005 and 2006 years. These years needed to be reopened because the accountant goofed up and we finally discovered his error. Anyway you can appeal the CRA ruling to an appeal group in P E I and they have the power to over -rule CRA. Also if they don't allow your appeal to review and correct the tax year in error you can finally make an appeal through the Federal Tax Court. On it goes. The CRA can keep you on their 'string' almost endlessly. They have a lot of power. I found some of them were fair and tried to help and use common sense. Others just stuck to the book no matter how unreasonable the rules were. If you have the time and the patience you can probably get through it with success as long as you don't lose your temper. That would bo ones worst mistake. Any other experiences of value? Thanks.


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## dogleg1 (Jul 4, 2016)

dogleg1 said:


> This CRA story never seems to end and they have a long list of rules and time-lines that you must follow. CRA refused to let me reopen the 2004 tax file due to certain time rules but they did allow the reopening of the 2005 and 2006 years. These years needed to be reopened because the accountant goofed up and we finally discovered his error. Anyway you can appeal the CRA ruling to an appeal group in P E I and they have the power to over -rule CRA. Also if they don't allow your appeal to review and correct the tax year in error you can finally make an appeal through the Federal Tax Court. On it goes. The CRA can keep you on their 'string' almost endlessly. They have a lot of power. I found some of them were fair and tried to help and use common sense. Others just stuck to the book no matter how unreasonable the rules were. If you have the time and the patience you can probably get through it with success as long as you don't lose your temper. That would bo ones worst mistake. Any other experiences of value? Thanks.


I also found that CRA makes many accounting errors ....so you shouldnever assume they are right.


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## dogleg1 (Jul 4, 2016)

The deal I would like to get from CRA is the one Mulroney got over his $300 000. Bernie Schreiber cash!


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## ian (Jun 18, 2016)

dogleg1 said:


> The deal I would like to get from CRA is the one Mulroney got over his $300 000. Bernie Schreiber cash!


Anyone can get that deal if they 'get' to the CRA before the CRA gets to them. Which Mulroney did within 24/48 hours of those monies being made public! Mulroney's representative acted immediately, according to reports at the time, and sent a letter to CRA advising them that the tax return was going to be ammeded.

I did. Smaller amounts over several years but they did add up to $120K plus of undeclared income. When I realized the error on one year, I reviewed several more.

Refiled the changes on-line, re-assessed, paid the tax, and the interest. No penalties.

We have also refiled in the past, through our accountant (we required professional advice), and we needed permission to open one or two years back that were 'closed'. Re-assessed and refunds were issued to us. We have never had any hesitation in engaging professional help when we felt we needed it or that it would be to our advantage.

Perhaps we have been fortunate. We have had several desk audits, refiles, etc. Always found CRA to be reasonable-when using a CPA or when doing it ourselves.


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## dogleg1 (Jul 4, 2016)

ian said:


> Anyone can get that deal if they 'get' to the CRA before the CRA gets to them. Which Mulroney did within 24/48 hours of those monies being made public! Mulroney's representative acted immediately, according to reports at the time, and sent a letter to CRA advising them that the tax return was going to be ammeded.
> 
> I did. Smaller amounts over several years but they did add up to $120K plus of undeclared income. When I realized the error on one year, I reviewed several more.
> 
> ...


Acted 'immediately'? According to court documents Mulroney reported income of $225 000. in '93, '94 from Schreiber and paid a tax of $112 000 on these funds in the year 2000.


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## ian (Jun 18, 2016)

dogleg1 said:


> Acted 'immediately'? According to court documents Mulroney reported income of $225 000. in '93, '94 from Schreiber and paid a tax of $112 000 on these funds in the year 2000.


Clearly Mulroney was trying to avoid paying tax on this cash 'transaction'.

When it become public that this transaction took place, Mulroney's tax lawyer immediately contacted Revenue Canada to report that his client his made an 'error; on his tax return and would be refiling. It was clear that Revenue Canada would follow be following up on this!

The point is someone who comes forward and 'voluntarily' admits that his/her income has been misstated is far less likely to be penalized than if Revenue Canada, as it was then called, found discovered the undeclared income via the audit process.

So Mulroney was forced, by the commission disclosure, to amend his tax return(s). But he did so prior to any audit query from Revenue Canada.

Just as I did , or anyone else can. It is very straightforward. Clearly Mulroney's original intentions were not as straightforward as mine, or others who amend their returns.

The same has applied to those who voluntarily came forward when one of the offshore tax scam participant lists was publicized. Some of the folks who used that Victoria firm to stash monies overseas and avoid tax have apparently come forward and made voluntary statements to CRA. They did so because they were concerned about a CRA audit, substantial CRA penalties on the tax not paid over and above the tax due and accrued interest. 

This option is open to anyone, and in fact CRA encourages it.


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## Numbersman61 (Jan 26, 2015)

CRA was embarrassed when the Mulroney deal was revealed. His lawyer was able to get CRA to agree to the generous terms for an anonymous client - who later turned out to be the former Prime Minister. Subsequently, CRA has been much more difficult in their negotiations relating to unreported income.


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## dogleg1 (Jul 4, 2016)

ian said:


> Clearly Mulroney was trying to avoid paying tax on this cash 'transaction'.
> 
> When it become public that this transaction took place, Mulroney's tax lawyer immediately contacted Revenue Canada to report that his client his made an 'error; on his tax return and would be refiling. It was clear that Revenue Canada would follow be following up on this!
> 
> ...


I speak from personal experience when I tell you that CRA has arcane rules that make no sense to anybody. I dealt with three years of self-declared unpaid taxes. They allowed me to open two of those years. The error was in my favour in the final analysis and no taxes were owed....actually a refund was due. The accountant had made the same mistake in each year so it was a no-brainer as to the correction. They would not allow me to correct this particular year because of a CRA time line. They have some crazy rules and your only final appeal is to the Tax Court of Canada. It is slow, complicated and expensive. The only people who do OK with CRA are the rich or people with power or connections like Mulroney for example.


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## dogleg1 (Jul 4, 2016)

ian said:


> Clearly Mulroney was trying to avoid paying tax on this cash 'transaction'.
> 
> When it become public that this transaction took place, Mulroney's tax lawyer immediately contacted Revenue Canada to report that his client his made an 'error; on his tax return and would be refiling. It was clear that Revenue Canada would follow be following up on this!
> 
> ...


Ian: You sure have drunk the coolaid! I feel sorry for you. Or maybe you are a P C politician or a CRA employee.


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## Numbersman61 (Jan 26, 2015)

The revised CRA Voluntary Disclosures Program 


https://www.canada.ca/content/dam/cra-arc/formspubs/pub/ic00-1r6/ic00-1r6-e.pdf


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## ian (Jun 18, 2016)

dogleg1 said:


> Ian: You sure have drunk the coolaid! I feel sorry for you. Or maybe you are a P C politician or a CRA employee.


No, I just have had a number of interactions with CRA. Refiles, desk audits, tax shelter items. Some to my benefit, some to theirs. I did work for a CA firm 35 years ago prior to switching to a career in technology.

I have never had an issue engaging professional help or guidance when I felt out of my depth or the benefit of that advice/direction would far outweigh the cost. This may be one of the reasons that I have not had any issues with CRA. It was actually CRA a re-assessment notice on a tax shelter in the early 2000's that caused me to engage a CA. Ended up refiling back to '96 and 97. $11,000 in refunds from subsequent re-assessments between the both of us.. A $3,500. professional services fee that netted out to $2100 in after tax dollars. Might not have happened if I had simply paid the re-assessment and complained that CRA were terrible. 

My interactions with CRA have always been fair. I do not especially like paying tax however I am thankful that I have had the income to incur that tax. To be fair, all of our issues have been black and white so speak. The numbers....income, expenses, deductions, CCA, etc.were/are all very straightforward. Very few expenses like auto and home office have even been subject to reasonableness or interpretation.. There was always a good portion of black and white in those variables. I may not have liked it but CRA was not the issue...the tax act was. One thing about CRA...they are not mind readers. When they ask for the back up documentation they mean it!

My daughter and son in law are in business and have had several CRA issues via their CPA accountant. Their experience has been the same. Clearly I realize that this is a people business and CRA employees are no different than others. Some good, some not as good.

I tend to be a glass half full person. Don't spend my waking ours lighting my hair on fire or lamenting about things like CBC, CRA, Air Canada, Habs, taxes, or politicians. The way I look at is that I am about 98 percent better off than anyone one else in the world just by virtue of being born in Canada. The rest was up to me, and to my parents. Not a complainer or prone to blaming others for self inflicted issues....too busy moving forward.


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## james4beach (Nov 15, 2012)

ian said:


> Don't spend my waking ours lighting my hair on fire or lamenting about things like CBC, CRA, Air Canada, Habs, taxes, or politicians. The way I look at is that I am about 98 percent better off than anyone one else in the world just by virtue of being born in Canada.


You'll never make it on social media with that attitude!


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## Numbersman61 (Jan 26, 2015)

dogleg1 said:


> I speak from personal experience when I tell you that CRA has arcane rules that make no sense to anybody. I dealt with three years of self-declared unpaid taxes. They allowed me to open two of those years. The error was in my favour in the final analysis and no taxes were owed....actually a refund was due. The accountant had made the same mistake in each year so it was a no-brainer as to the correction. They would not allow me to correct this particular year because of a CRA time line. They have some crazy rules and your only final appeal is to the Tax Court of Canada. It is slow, complicated and expensive. The only people who do OK with CRA are the rich or people with power or connections like Mulroney for example.


Some of the arcane rules are not the fault of CRA but the politicians and the Department of Finance who drafted the law.


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## zinfit (Mar 21, 2021)

I filed with TurboTax . After filing I realize I entered the same item twice under other income. It is a 21,000 item. I tried to amend my return but I was told I couldn't amend on line because I split income with my spouse. I sent in a paper request and have received no reply. I phoned three times and was told it was in the cue. I then noticed that CRA with their original notice of assessment reduced my taxes by 4800 dollars. I am fairly certain that is a mistake in my favor. I am tired of the runaround so I figure on sitting back and will see what happens. It was 2 months ago that I spoke with them.


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## ian (Jun 18, 2016)

zinfit said:


> I filed with TurboTax . After filing I realize I entered the same item twice under other income. It is a 21,000 item. I tried to amend my return but I was told I couldn't amend on line because I split income with my spouse. I sent in a paper request and have received no reply. I phoned three times and was told it was in the cue. I then noticed that CRA with their original notice of assessment reduced my taxes by 4800 dollars. I am fairly certain that is a mistake in my favor. I am tired of the runaround so I figure on sitting back and will see what happens. It was 2 months ago that I spoke with them.


They may well catch it. My sister/BIL had an issue with changing their pension splits. They did not bother calling. If you check on line you will find that you need to complete two change forms, one each, and submit. It is very straightforward however he told me that there was also a three year limit on how far back one can adjust.

It seems that just getting this basic info from CRA is more difficult that printing, completing, and submitting the change.









TaxTips.ca - Pension Splitting Can Save Tax


TaxTips.ca - Save money by splitting pension income with your spouse; What is eligible pension income; When is pension spllitting beneficial




www.taxtips.ca


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## zinfit (Mar 21, 2021)

zinfit said:


> I filed with TurboTax . After filing I realize I entered the same item twice under other income. It is a 21,000 item. I tried to amend my return but I was told I couldn't amend on line because I split income with my spouse. I sent in a paper request and have received no reply. I phoned three times and was told it was in the cue. I then noticed that CRA with their original notice of assessment reduced my taxes by 4800 dollars. I am fairly certain that is a mistake in my favor. I am tired of the runaround so I figure on sitting back and will see what happens. It was 2 months ago that I spoke with them.


I just got a notice saying they have amended my return and I will receive the notice of assessment by November 22 along with a refund cheque. My first notice of assessment showed a 4500 hundred balance owing . My current statement of account showing a zero balance owing with a tax refund coming through on November 22. I figure CRA is overloaded with admnistration of government stimulation programs.


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## dogleg1 (Jul 4, 2016)

zinfit said:


> I just got a notice saying they have amended my return and I will receive the notice of assessment by November 22 along with a refund cheque. My first notice of assessment showed a 4500 hundred balance owing . My current statement of account showing a zero balance owing with a tax refund coming through on November 22. I figure CRA is overloaded with admnistration of government stimulation programs.


I appealed my case to the Tax Court of Canada. I no sooner got my paper work started and I got a call from a person who led me to believe he was from the Tax Court. It turns out he was from CRA. He told me that the Tax Court didn't have the authority to hear my case and I should withdraw my appeal. I just told the Tax Court about it today so I don't know where this will lead. If it wasn't so serious it would be a huge Laurel and Hardy joke. I contacted a tax lawyer to see if he could help.....take a guess what this will cost. On it goes.


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## dogleg1 (Jul 4, 2016)

This CRA saga is beyond belief. I assumed an appeal to the Tax Court of Canada would be a forum where an individual could present their case in front of an independent judge who could decide on the fairness and merits of the case. Evidently the Tax Court judge is powerless to make a ruling that doesn't comply with CRA time-line rules. Some 'court' that is . I told the Court that I would be wasting my time to appeal my case to a court that had no power over CRA. That was a long time ago and I have had not one word in reply. God help us!


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