Some Tax Horror Stories
Lee in Toronto
CRA attacks a legitimate charitable donation. A Service complaint against CRA is filed. Meeting with auditor supervisor is set for January 20th. We refused to allow Bob the overly aggressive CRA auditor to attend. Bob’s behaviour is contrary to taxpayers bill of rights. Susan, the team leader, and Bob, the bombastic auditor, were not happy to receive the complaint, but service complaints have to be treated seriously. The auditors took the train to Toronto to meet with us.
Service complaint was filed against Bob (name withheld pending his new behaviour).
We met with Bob’s team leader, Susan, and her manager, Tony. Both conducted themselves very professionally and ensured us that auditors need to respect procedure and tax payer rights. Complaints are responded to within 15 days, and this held true in this case.
Tony claimed that this does not sound like the Bob he or Susan knows. We responded that we could get affidavits from at least 5 people who would testify as to Bob’s unprofessional conduct.
We pointed out Bob’s behaviour, which included nasty phone calls, threatening assessment, that he has yet to do, after over a year of threats about it.
Tony and Susan assured us that this audit had indeed gone on too long, and they would get the matter resolved quickly now.
One of the issues discussed was Bob’s claim that “CRA has no use for Tax Representatives.” Tony and Susan said that such a statement is not valid, that in fact they find that when a client hires a Tax Representative, things go much better and faster.
They did agree to talk to Bob on their return to their home town. We agreed to allow Bob to stay on the audit subject to him changing his behaviour and actually looking at evidence that contradicted his opinions.
We have now narrowed down the issues in this audit, and we were satisfied by Bob’s bosses, that there could be a course correction and how this audit is to be handled.
We have another service complaint pending from another taxpayer unhappy with Bob.
Filing a service complaint sounds like an easy solution, however from our perspective, where we do this fairly often, it is our opinion that doing it without knowledgeable assistance is not going to get the same results. One needs to know the law, policies and procedures.
We often hear people say that filing a service level complaint does not accomplish anything. That is only true if you don’t know how to do it right. If you know what you are doing, the service level complaint gets action. You can be sure of that.
We are now satisfied that this audit can be brought to a satisfactory conclusion, our client is more relaxed that he feels things are under control, and all we have to do now is conclude the matter. Our submissions are all in and they have the eyes of management on them and on Bob.
April 21, 2010
We had another meeting, with CRA… this time Tony, Susan and a CRA lawyer. They made an offer to settle. They would allow the cash donations, waive penalties and interest on the equipment donations, but wanted to deny the donation receipts entirely.
We declined the offer and had a big discussion.
We found it interesting that CRA did not have a financial figure to their offer and that the lawyer had not read the file.
So now we move on to discussions and negotiations as to value of the donated equipment.We are also pointing out that the onus is not the charity to evaluate equipment, and not by the donor.
We are in dispute over statute barred years. We believe we are correct that in the absence of any negligence by the client, CRA has no just cause to open up those years.
What we can tell you for sure is that lodging the complaint has definitely improved the situation. CRA is watching their behaviour much more closely now.
Aug 13, 2010
CRA no longer is claiming gross negligence, have accepted the cash donations and the donations of equipment. Now it is merely an exercise of agreeing on the value.
This case was a 100% turn around. Harassment by the lose canon auditor is over and we just need to wrap things up.
Notes on this 6th day of February. Here we are now… We prevented CRA from looking at statute barred years.
However they sill are bears for punishment. They still assessed the taxpayer unreasonably. We have filed a notice of objection.
We received a call from the appeals officer, asking for information we gave them a long time ago.
We are not relenting. This will be another case that in the end is nothing other than an abuse of a taxpayer who went beyond normal due diligence to do things right.
It seems that the taxpayer being right has nothing to do with trying to extort money that is not legitimately theirs to get.
We know that we will win on our case because we will take it right to tax court. There is consideration to also sue CRA for damages in civil court.
CRA is relentless in their pursuit of money. Today’s theme by CRA is “The government is our client, taxpayers must do as they are told.”
Jim in Barrie
CRA freezes Jim’s bank account, derailing Jim’s business. Jim becomes a client on Friday and freeze is removed on Monday.
Now TAS works to reduce tax liability.
We have staved off CRA and implemented a financial recovery plan. The nightmare is almost over and now we just help strategize how to keep out of trouble going forward.
The nightmare is over and the taxman gets zip.
Michael in Pickering
Small business, gets a call from a CRA auditor. The Auditor is asking questions writing down what she is told.
Michael wisely limits what he has to say and hires Tax Audit Solutions to represent him.
Auditor is in a big rush to get into the file. She informs us, that there is no real concern about his tax return, there is just one area she is interested in.
We agree to meet with her to show her paperwork for her particular area of interest.
The auditor arrives and is interested in everything.
We put the audit on pause, and inform CRA that we will provide the information in audit ready format in 90 days. They wanted it sooner but we have the right to take as long as it takes to do the job right.
CRA calls to see if we will be done the bookkeeping for the promised date. We said we would, and we will. Everything is now very pleasant.
The audit was completed with CRA accepting all our numbers. Client writes the following testimony.To whom it may concern:
Tax Audit Solutions is a powerhouse when it comes to dealing with the Canada Revenue Agency. I highly recommend them to anyone who has tax or audit problems.
I had some very delicate issues around my taxes where things could have ended up very costly for me. Audits are scary events and they can go sideways to where the tax bill becomes unmanageable.
I was very nervous about what I could end up owing if my very complex issues were not handled properly. I knew I needed professional help, someone with a kick ass attitude and who was not afraid of the taxman.
Dealing with CRA is very stressful at best and yet, TAS handled everything, assertively and professionally. They kept me informed all along the way, and made it possible to deal with far less stress, knowing that I was in good hands.
TAS did not just do the work, they held my hand and continued to ease my mind as the process evolved. They actually care about how their clients are feeling.
Once I hired TAS, I did not have to talk to CRA anymore and that was a big bonus. TAS handled the CRA Auditor business use of home visit. Not needing to be there when they invaded my space was a huge relief.
When TAS took on the case, suddenly my stress went down and they went to work for me. They created an impeccable set of books and records, they stick-handled the auditors and kept them from getting off track or disallowing any legitimate expenses. They explained the unexplainable, they made sense out of what was hard to understand. No stone was left unturned in their quest to ensure that every expense was so well documented that CRA would not dispute it. The books and records were so well prepared that it was very easy for CRA auditors to see that it was well done and all correct.
I was told up front by TAS that I would only have to pay tax on what I actually owed, no more and no less. That is exactly what happened, the amount I actually owed was only what was real and not one cent more.
I have to tell you that I really lucked out when I found Tax Audit Solutions, I don’t think anyone could have done a better job than they did and on top of it all, the ordeal was over in much less time than what a case like mine would normally take.
Now I am going to follow their advice and keep my books and records audit ready.
MK in Pickering
This is not one of our cases, but it is a terrible injustice Audit Horror Story.
This article demonstrates that CRA is not respecting Canadians rights and is not being held accountable for its behaviour.
We do not live in a country with a fair and reasonable government. We are in a country overridden with tax problems caused by CRA being out of control.
Let’s see the results in court at the end of January.
British Columbia’s Mr. Irvin Leroux, who has lost everything fighting for 14 years against such bully tactics by the CRA
Audit Nightmare As Published in Canada Free Press
By Kevin Gaudet Wednesday, January 13, 2010
Imagine the Canada Revenue Agency (CRA) shows up at your door to do an audit. As if that alone isn’t scary enough, they proceed to take both copies of your documents, originals and photocopies —without your permission.
They lose or destroy these key originals. Then they assess hefty tax bills against you because you cannot provide documents in your defense. CRA mistakenly demands you pay $800,000 in taxes allegedly owed. This helps ruin your business, leaving you broke. Does this sound far-fetched? Not according to British Columbia’s Mr. Irvin Leroux, who has lost everything fighting for 14 years against such bully tactics by the CRA.
His treatment outraged his MP, the long-serving Dick Harris, who took up his cause with the former Minister of National Revenue. According to Mr. Leroux, his MP was told by the Minister that the CRA couldn’t pro-actively compensate Mr. Leroux for his loss, but that he could sue the government and they would offer a settlement.
As ridiculous as it is that Mr. Leroux has been forced to sue the Canadian government to get back some or all of what he has lost in his lengthy tax fight fiasco, not a nickel has been offered. In this case it appears the federal government made a mistake; a big one at that. They should just admit it, apologize for it, and settle out of court with Mr. Leroux. Instead, they are playing the Goliath against his David, fighting him in court and denying any wrong-doing on their part.
The latest tactic employed by government lawyers, scheduled for court at the end of this January, has been to argue that Leroux’s lawsuit has no merit as his tax case was resolved earlier.
The issue of taxes owing was resolved by a judge only after Leroux fought in tax court to prove he owed no money. The case was settled in 2005 with the CRA agreeing that he had actually overpaid his taxes. They were required to pay him a small refund.
The CRA’s attitude seems to be ‘oh well, this issue is over.’ But it isn’t over for Mr. Leroux who is struggling to pick up the pieces after CRA’s withering 14 year campaign against him.
Their campaign against him drained him of cash, aggravated by the expense of legal and accounting fees and triggered a domino effect. Mortgagees began foreclosing, and Leroux’s properties were sold off for one-third of their value. When the dust settled, the creditors were paid, but nothing was left for Leroux. Once he had been comfortably set for a secure retirement. Now he is virtually destitute, living on CPP and Old Age Security. He now has recurring nightmares about being homeless and scrounging for food in garbage cans.
While taxpayers certainly don’t want the government tossing money away unnecessarily, governments must do the right thing to correct its mistakes.
Do Revenue Minister Blackburn and Justice Minister Nicholson really not know what is going on here? Are they really condoning this attack on a tax-paying Canadian? Perhaps they simply have no idea what the government’s lawyers have been doing?
Irvin Leroux is an ordinary Canadian who trusted his government to be honest and decent towards him. He paid taxes like he was supposed to – overpaid, in fact. His government turned on him and has ruined him.
This is a case either of rogue tax collectors or of systemic abuse by the CRA. Taxpayers should hope it is the former; that rogue tax collectors were running amok and made life hell for Mr. Leroux. Why would they do this? Because they can. The powers of our tax collectors are enormous and stacked against the little guy. If you manage to get on their bad side then look out because this case shows what the CRA, when roused, can do to you.
The cabinet ministers involved should instruct their lawyers to negotiate a way out of this shameful episode. It further damages the already tarnished reputation of the CRA, and continues to punish a taxpayer who has already gone through too much.
As the end of the year approaches many people take stock of the year that was and make resolutions for the year to come. If politicians did this they first would realize that there is much work to be done.
Mr. Leroux has initiated a civil law suit against CRA for damages. CRA filed a motion to stop the action. CRA lost and has had to pay costs to Mr. Leroux at costs level 4.
It will be very interesting to see what happens in this case. CRA clearly is in the wrong.
We await with baited breath for the outcome.
James in Alberta
CRA calls, pushes James to get his GST returns done quickly by H&R Block. No input tax credits are claimed.
Someone tells CRA that there are no receipts. CRA collections goes ballistic, and gets James to agree to a $4,000.00 per month payment plan.
James will run out of money very shortly.
James hires TAS.
CRA tells James that using a Representative will be used against him. This is done to scare taxpayers from getting professional help.
We get the receipts, contact CRA and advise them that we have filed a notice of objection, and to back off collection activities.
We say that James is willing to negotiate a plan that he can afford.
CRA refuses to speak to us… the duly Authorized Tax Representative. The collections officer was rude and obnoxious.
We file a service level complaint.
The collections officer’s supervisor calls…. she sings the same tune.
She says, that James has proven that he can make the 4k payments, we point out that no, it only proves that he COULD make those payments, it does not mean that he still can.
The supervisor bald faced lied to us that they can not negotiate through a Tax Representative.
The supervisor said that they were going to take immediate legal action against James.
The supervisor would not give us her managers name and I calmly insisted, over and over again. I was hung up on. CRA is only allowed to hang up when they are being abused. Calmly asking for the managers name is not abuse.
We filed another service level complaint against the supervisor this time.
We call James and tell him to get all his money out of his bank account, so that the one thing that they can do quickly is removed as an option.
James does so within a couple of hours; James is a good client that listens to good advice.
The file gets transferred to Edmonton. The auditor and her supervisor are tying to get themselves out of hot water.
Ha! We draft a strike back at the auditor and her supervisor, then Leon, points out that twisting arms is fine, but do we really need to break the arm?
Leon was being a bit of a party-pooper, but he was right. All we were about to do was revenge. Perhaps and likely Edmonton will be more reasonable. And even if CRA in Edmonton is not more reasonable, we will have the bookkeeping done that will be able to get James his input tax credits.
We have this under control and James can now sleep at night.
Stay tuned… this is a very interesting case. More to follow.
February 12, UPDATE:
Kim in our office received a call today from the CRA Edmonton office. A lady by the name of Natalie called. She was very professional and very co-operative. The case is now on track and we will be able to move things along. It was really nice to deal with a professional, after the experience we had with the Red Deer office.
CRA backs off and leaves the client alone. All is peaceful for now.
We have a lot more cases, I will try to get as many into here as possible. I see this as a good way for people to see that you really can get results if you hire the right team to defend you.
Death and Taxes.
I find it interesting that CRA sees itself as a fair and reasonable entity. Yet more and more silliness shows up via the internet.
Just as in China, web cams have changed the face of government workers, here in Canada the Internet does the job.
Keep reading as we are now going to increase our coverage of CRA goof ups.
The following case illustrates that CRA can and does make silly mistakes.
N.S. man in a life-and-death struggle to convince taxman he’s alive
Ken MacKay may be angry and losing patience, but he’s definitely not dead.
Global News and Canwest News ServiceApril 21, 2010
Ken MacKay may be angry and losing patience, but he’s definitely not dead.
Photograph by: Photodisc, Photodisc
HALIFAX Ken MacKay may be angry and losing patience, but he’s definitely not dead.
So imagine his surprise when he opened a letter from the Canada Revenue Agency declaring him officially deceased. It’s happened not once, but twice.
In January MacKay received a first letter from the tax agency telling him that he was no longer eligible for a GST rebate because he was dead.
“I was shocked, like I just couldn’t believe how anybody could make a mistake like that,” he said, adding he asked if the agency hadn’t mixed him up with his wife of 34 years, who died in October from a lung ailment.
“They told me no, that that didn’t happen, but indeed I’ve come to find out afterwards that that’s exactly what happened.”
He said he was later given the runaround, being passed from one government department to another.
When he told the bureaucrats he was alive and well, he was assured the matter would be straightened out. However he is still listed as dead on paper.
“It was pretty hard to take, especially the second time around,” he said of an April 1 followup letter from CRA again asserting his non-living status.
Mackay said he’s claiming on his income tax phone bills and other expenses he incurred while trying to prove he’s alive.
“If it happens a third time, then somebody will be held accountable,” he said.
It isn’t the first time this has happened in the province. Theresa Fraser, 76, who lives in Nova Scotia’s Pictou County, asked for an apology earlier this year after the federal government stopped delivering her cheques following a mix-up involving her name. She too, it turned out, had been mistaken for dead twice by the government.
Read more: http://www.montrealgazette.com/news/canada/life+de…
Doug and Roland in BC. Lady Car Care Corporation.
First CRA arrives on the scene decides that the GST is handled properly. They audit, immediately go to collection and they hire a bailiff and seize assets. They shut down a company that was in complete legal compliance and up to date in all payments in every way. Instead of working things out they just act like the Mafia.
The principles of the company start up a new company. CRA comes after them again. CRA audits, finds something to argue about, assesses and then sends in the bailiff again. The collections officer Chuck Henault teams up with the Bailiff and forces the company to pay $5,000.00 per month to the Bailiff under treaty to close this company down too.
Mr. Lenault appears to be lacking in common sense. The company can pay the taxes, and has been doing so in large amounts. So contrary to the good of the taxpayer base revenue stream, he proceeds to torment and threaten to close down a company that employs 16 people whose families count on the money to live on.
This audit is devoid of any shred of common sense and reason.
This time the company calls Tax Audit Solutions. All hell breaks lose. We get CRA management involved and both the Minister of Revenue and his assistant.
We are still fighting. Mr. Henault being full of bias and whatever… proceeds to pressure… he refuses to accept a payment plan… instead wants to see the financials…. How does seeing financials first and pay later make sense? The payments can be adjusted later.
So we get the taxpayer to instead issue cheques directly to CRA. So Mr. Henault issues a Bailiff Bill against the payments to CRA. Is Mr. Henault in bed with the bailiff or what?
So now we are at war. There are impending civil suits against Mr. Henault, or as I like to refer to him as “Chucky Baby,” and against CRA.
The Society of Professional Tax Representatives is currently conducting an investigation into this matter.
Stay tuned, we are at war here.
More events. Chuck Henault continues his despicable behaviour. He demands all kinds of information. We get it for him, he can not understand financials or does not care to read them. He refuses a payment plan. Our client continues to pay $2,000 per month. CRA deducts bailiff fees from the payments even though the bailiff is no longer involved except for holding the assets hostage under a contract of Bailee.
We send out letters, complaints and raise cane. Chuck wants payment in full within 30 days.
We get a stupid phone call from Chucks Team Leader, Jobina McLeod, in response to Julie’s letters. Jobina states that she can not talk to Julie, as she is not the authorized representative. Well, being that CRA has been in constant contact with Julie, that would mean that CRA had violated the taxpayers rights. Anyway, Julie got mad and said that she was not going down that path with her AGAIN and hung up on her.
So we escalated the matter. I had a call from the Case Coordinator in Ottawa. It turns out that the Vancouver Tax Services Office (TSO) has not given all the information to the uplines.
We sent the required information to the Case Coordinator Mr. Kurt Stephens. He was most certainly a voice of reason from within CRA.
Today we heard that our file has been elevated to the Assistant Commissioner of Revenue. This is a good sign.
It is a major job to get the ears of those who care about what happens out there. So I am hopeful that Doug and Rolland’s nightmare is coming to an end.
Stay tuned, there is light at the end of the tunnel once you get through the dark forces of doom and ruin.
August 31, 2010
The battle rages on. The company sends their payment to the wrong address. CRA, upon not receiving the payment on time, immediately does a requirement to pay at the bank.
The collections officer is relentless. Chuck Henault loves his job; tormenting taxpayers seems to be his gig. He does not send all the information upline. He is being more careful but it is clear he just wants a complete destruction of this business. He does not care that 10 families lose their income. This is about his power. CRA’s Vancouver TSO has their wagons surrounding him, they see nothing wrong.
Curt Stephens, the case coordinator, was going to help, but we could see this was not going to help as his answer was that there was to be a report written up. Now let’s see, who writes the report? Chucky Baby? And what about the deadline? The 20th is coming and we can not wait for reports.
We have staved off the closing of this business for months now so no matter what, we have done one hell of a job fending off the dark forces from the Evil Empire.
Why would I feel comfortable calling the Vancouver Island TSO, the Dark Forces from the evil empire? Well what else would you call a powerful force that wants to punish a taxpayer so badly that they will ignore that closing down a company means that there will be less money paid into the CRA tax coffers?
So what is going to happen here? The phones are ringing from CRA Head Quarters however, Head Quarters is not getting all the information, so they believe what they are being told by Chuck and his wagon masters.
What is happening is shocking to Chuck and his team of cohorts. They are not used to seeing this kind of war being raged. Normally when a company is behind in their taxes they can not afford to pay for this kind of defense.
For CRA their normal run around, brush offs, bluffing is not working and Chucky better watch his back. The Society is investigating him. Laws, rights and common sense are being ignored. I would not want to be Chucky when the temperature heats up.
As Canadians, we can not tolerate this kind of wanton abuse of everything Canada stands for.
A lot of people think that CRA can pretty much do what they want. While this horrible conduct has been tolerated in the past, much the same as in the MOB collecting protection money, everyone operates from a place of fear. So the belief in CRA invincibility is allowed to perpetrate itself. Well we know what happened to the Chicago Mob… you can only conduct a campaign of abuse so long and then all hell breaks lose.
Canadians are getting angry… We are standing up for them. The war has only just begun.
Either CRA learns to follow their public statement of what they do on their own volition or we as who are really the ones with the power, will make sure that they do.
Now that Canadians are not silent, the word is out. It is time for CRA to clean up the bullies within. The bullies such as Chuck Henault, his boss Jobina McLeod and their team will get cleaned up.
I was recently Vancouver, assisting with the society’s investigation of Vancouver Tax Services Office behaviour. I found out a lot of very shocking information. This case is being well documented for ensuring that there is a corrective behaviour.
What Vancouver TSO needs to get; We don’t care about retribution on the CRA staff, what we want is fairness and for CRA to follow their stated code of ethics and conduct, the taxpayer’s bill of rights, the charter of rights, and the laws of this country. Never mind exercising common sense and reason. We will ensure justice is done. As soon as Lady Car Care gets treated with common sense and fairness, we will back off. Until then, I would not want to be Chuck and crew.
The glory days of the headiness of power are about over. While there are no restrictions under the ITA or the ETA as to what CRA collections thugs can do, there are a plethora of laws that the thugs are not allowed to break.
Well here we are. We are now into September and the battle rages on. Chucky takes a week off. He does this frequently… one wonders if it is vacation or is it a delay technique.
CRA tries a new version of one of their earlier ploys, they now question my signature on the letters claiming that privacy is a big issue with them and they need my signature. Ha!
We have sent them a copy of their own internal services procedures outlining where they are not following their own rules, we have asked for more information.
The Vancouver TSO is spending enormous amounts of time, running off to the Dept of Justice, talking about it in meetings etc.
We are consuming their time and resources, their productivity is down now.
We won’t wear out…. we will stay on this, until justice prevails, even if they do close the business down.
The complete absurdity of this situation is: If they close down Lady Car Care, they will lose more in income tax that the laid off workers won’t be paying, in one year than the debt that LCC owes.
CRA is collecting payments made directly to them, Chucky insisted the payments go to the bailiff creating commissions for the bailiff, however we have directed our clients to pay their true creditor. We are insisting on a payment plan, CRA is refusing saying they need more information…. we have provided more than adequate information and have pointed out that they should not be putting the financial burden on the taxpayer of endless hours of bookkeeping.
CRA is saying that if they don’t get the full amount by September 20th, they will close down the business. If they do there will be a press release and full media coverage. CRA will look like idiots…. odd being that one could ask some serious questions, such as “What the hell are you thinking?” Why cut off your nose to spite your face? Which is exactly what will happen, CRA will collect less money and will cut off tax revenue of the entire staff who currently pay taxes and will lose their jobs and not be able to pay taxes.
So the real question becomes: Is Vancouver Island Tax Services Office so spiteful for some unknown reason that they will act in absolutely no one’s best interest?
The battle rages on… Chuck does not like that I have made it personal. Ha!!! like he did not make it personal by antagonizing our office and in general being the epitome of the worst thoughts any taxpayer ever had about an unfair, unreasonable arrogant…. I could go on.. but the words would not be printable.
It is pretty clear that the Vancouver TSO has no intention of doing the right thing.
The company has a regular bookkeeper, she prepared financial statements to show that the company could not afford to pay the outrageous payments, so Chuck orders her to change the numbers. WOW!
We decide it is time to bring in a high powered tax lawyer to fight from some new angles… we have kept CRA at bay for almost a year now…. and it seems justice will be served for Canada by taking a different angle…
For sure, Vancouver TSO Chuck, Jobina, the manager, the assistant director, the director, etc… will be glad to see this go… everyone in the office there knows about the case.
These dudes will not like it when they see us popping up all over the place. Our reputation is growing and more and more Canadians are recommending our services.
We are having good wins in the process towards court and when we get there. We don’t always win in court, but we do get significant wins.
The Dentist in Kitchener: Charitable Donations.
The good doctor, checks out the charity. Does all his due diligence and more.
CRA disallows all the donations, both the cash and the gifts in kind. The auditor Mr. Bob Cortese, sends the doctor a bill for $125,000 on Christmas Eve. Nice touch don’t you think?
The Doctor pays the bill and hires a lawyer. The lawyer gets nowhere with CRA so they file a notice of objection.
The Doctor decides to hire us.
We launch our attack.
CRA offers to settle. No gross negligence penalties, full acceptance of both the cash donations and the gifts in kind subject to further appraisals of the donated equipment.
In this business of taxes, if you don’t fight, you lose. You need to hire a representative who knows how to fight and strike where it hurts.
The client has now settled with CRA and will be sending us a glowing referral as soon as he gets his big cheque from CRA.
Life can be good.
Steve in Calgary,
CRA denies all business expenses, claiming that his home was not his principle place of business.
We fought for two years.
We had a complete win in court. February 4th 2011