Personal Finance

Afghan vet getting screwed by CRA, help pls

  • Last Updated:
  • Jun 12th, 2017 7:40 pm
Jr. Member
Mar 2, 2011
190 posts
Richmond Hill

Afghan vet getting screwed by CRA, help pls

Hey, so I'm in a shitty situation and I need some advice. Here's the situation:

Back around 2008 I was injured in a roadside bomb attack while serving in Afghanistan. Veterans Affairs had just switched from a lifetime pension to a lump sum for wounded vets, so I found myself in receipt of a fairly large chunk of money. I started a small business, paid some bills, and also started trading in the markets. Not too wise, considering I had no idea wtf I was doing. Anyways, long story short, I ended up losing about $90,000. Shitty, for sure, but it was what it was, I took it on the chin and moved on.

Fast forward to about a year ago and I get a notice that my taxes for 2008 and 2009 have been reassessed and I now owe CRA close to $700,000. Pretty f'ing crazy I thought, because that's probably about the totality of my lifetime income. No way could I owe that much, I thought. So I asked for an appeal and figured it would be a pretty easy fix, surely a case of mistaken identity. Anyways, months passed and I kind of forgot about it. I wasn't worried in the least because I knew it had to be a mistake. Turns out, it wasn't totally. They had the right person.

Apparently what happened is that TD Waterhouse had sent CRA something called a T5008 slip, something I never knew existed. These are slips for every single transaction I made from my account. All told, there was probably close to 800-900 slips sent to CRA. The problem for me is, the T5008 ONLY says the name of the security, and the proceeds from the transaction. So, for example, a slip might show that you bought (or sold, the slip doesn't specify) 1000 shares of Uranium One (hypothetically) for $8,000. So we can glean from that that the purchase (or sale) of U1 was done at $8/share. That's the only information. It doesn't say whether the transaction was a sale, or a purchase, and it doesn't say if the transaction resulted in a profit (which is taxable) or a loss (which is not). So what CRA is apparently doing is assuming that EVERY SINGLE SLIP was a sale, with proceeds going to me, and taxing that as capital gains. So they have me as making cap gains of several million dollars over that time period, with the end result being a tax bill of the aforementioned $700,000.

Obviously, this is a giant kick in the balls. It was bad enough to lose almost $100,000. But now I'm being forced into certain bankruptcy if I can't vacate this judgment. To make matters worse, I've since wised up with my personal finances and have amassed a little nest egg that I'm saving for my future. It's not much, but it's in the tens of thousands and has taken me close to 10 years to save, and after the pain of squandering my initial disability payment, I'm proud of it. If I declare bankruptcy, that's gone too.

The rep I'm working with at CRA is very nice and helpful. She seems to want to help me out, but apparently the onus is on me to prove that I DIDN'T make millions of dollars in the stock market. I've called TD and TD Waterhouse and they apparently only keep account records for 7 years, so nothing there to help me. I've heard that banks and brokerages keep hard copies in a basement somewhere, but I can't seem to find anybody at the bank who knows about this. I've tried to connect the dots myself. I had CRA send me every single T5008 slip, and I went thorught every one and tried to match them up. So, for example, if I have one transaction on Feb 15 for 8000 in a specific security, and another one on Feb 18 for 8000 shares, and those are the only two transactions for that security, it's a reasonable assumption that the transaction on Feb 15 was a purchase, and the one on Feb 18 was a sale, and it's easy enough to figure out the price/share on those dates, figure out your total cost, and then from that subtract your total proceeds, and from THAT, figure out your tax liability. The problem with this is, TD Waterhouse clearly didn't send all the slips. Many of the securities didn't match up (for example, I had one transaction for 16,000 shares, and the only other transaction for that security was for 2,000. So how would one get a picture of what was going on based only on that information?). Also, there were many T5008's that had only one transaction for a given security. That's it. So clearly, something is off: Every complete trade requires at least TWO transactions, a buy and a sell.

So here are my questions, and I would appreciate any answers:

1. Is it appropriate for CRA to just assume that everything was a profitable trade? Is the burden of proof squarely on me?
2. Can they just take documents that are CLEARLY incomplete (i.e. only one transaction sheet for a specific security) and extrapolate from there in a way as to assume the worse possible scenario for me?
3. Should I hire a tax lawyer? Can they do anything?
4. Does anybody know how baking records work, and who specifically I should seek out for help in finding these old records?

The thing that really burns me is that any objective reading of the hundreds of T5008's they DID send paint a pretty obvious picture. Yes, the numbers don't always add up because the records are incomplete. But there are many trades that DO line up perfectly (i.e. the share totals for a specific security match up perfectly, and we can paint a picture of the transaction flow. In other words, it's obvious what was a buy and what was a sale). But when an objective person who knows the financial industry looks at the complete stack of T5008's in totality, it paints an obvious picture of a crappy trader who had no clue what they're doing and in no way could EVER earn that kind of profits in the market. I'm talking about share purchases one day, then a sale the next day because the stock went down 0.5% or something. Then another purchase a week later, followed by a quick sale because it went UP 0.5%. My point is, when you look at the totality of the trades we DO have, it's obvious that the person directing these trades was exactly what it was: a total amateur who had no idea what they're doing and with more money then brains. I mean, there is no way in hell that any CRA professional can look at the T5008's they have and ACTUALLY think that this person made millions in profits. So they KNOW I don't actually owe them that money. In addition, if these actually WERE profits, then surely there would be evidence of that somewhere. For example, I would have had to move the cash from my TD Waterhouse account back to my TD Bank account in order to access the money. Or send it to another Canadian bank or whatever. The point is, there would be a pretty significant paper trail of that money that just doesn't exist. But until I can prove in conclusively, they're pretty determined to take everything I've worked for in the past 10 years.

I'm aware that everyone owes taxes on any capital gains they may have earned. But it never crossed my mind to keep records of losing trades. I didn't even know T5008's existed until this nightmare.

Anyways, any help would be appreciated.

65 replies
Sr. Member
Aug 24, 2006
564 posts
Unfortunately records are really important to CRA. I think you will end up being fine, but you need to provide more proof

I would contact td Ombudsman. To request all the info you need. Prepare to wait
Who did your taxes for that year, did you follow up with them ? ( the stocks should have been recorded as a loss on your taxes) Perhaps they kept records( doubtful at this point)
Getting experienced help may make things easier.
Deal Addict
Oct 6, 2015
1644 posts
1) TD almost certainly has the information going back much further than 7 years. You may have ability under PIPEDA to request this personal information free of charge. As a general rule of thumb, banks do not really discard *any*thing electronic-data wise.

2) The CRA may be barred from even reassessing that far back except in very limited circumstances. You might want to get professional advice concerning such, as you might be able to have their reassessment quashed on that basis alone.
Deal Fanatic
User avatar
Mar 23, 2008
8224 posts
1) and 2)The burden of proof is always on the taxpayer. CRA has no obligation to interpret anything in your favor. They're also under no obligation to go look for documents that clear things up for you.

3) Yes, I think you should hire a tax professional ASAP. You probably should have done that a year ago, when you got a bill for $700k. I don't know how you could just forget about that for months... You can check with Veterans Affairs to see if they have any assistance for you on that regard. (

The other question, I have no idea on, aside from below.

If you knew that you had to pay taxes on capital gains, how could you not consider that you might need to keep track of losses as well? How did you file your taxes without a complete picture of what you bought and sold?

Your situation is similar to a business that kept track of their sales, but not their expenses. So all their transactions look like 100% profit. Of course they're going to get nailed for far more taxes than they should normally be assessed. In your case, it may even be doubled up, as all transactions look like income, rather than a split of income and expenses. In any case, the onus is on you to keep track of your records and produce them in the case of dispute or audit. It's not up to the CRA, TD, or anyone else to hold a copy for you.

Sorry for the hard words, but that's the way I see it. I wish you well. And all I can suggest other than hiring a professional is to keep in touch with your CRA representative. If you're showing a willingness to work with them, they will help. If they think you're trying to avoid your responsibilities, they'll come down hard on you.

Deal Addict
Feb 26, 2008
1821 posts
Wow, that's a scary tax bill. You probably don't need documentation for every trade. It's quite likely that your monthly statements from TDW would be adequate to demonstrate that you didn't make much money on the trades as the monthly statements would indicate withdrawals from your account. It strikes me that they ought to be able to find 24 or 36 statements from that period which demonstrate that you didn't make money on your trading activities.
Deal Fanatic
Nov 24, 2013
5285 posts
Kingston, ON
Ultimately it's up to you to prove to CRA (or tax court, but hopefully doesn't need to go that far) what really transacted, rather than it being up to them to prove you really owe them what they reassessed.

Use every channel possible to get the trade info from TD or wherever you might have records and piece the timeline & puzzle together. People who do non-registered investing use spreadsheets and other tools to track their ACB, CG, CL info because it's a pain in the butt to piece it together retroactively. Unfortunately now, that's what you've got to do.


Best of luck!
Deal Addict
Aug 19, 2013
2397 posts
CRA isn't screwing you. The onus is on you to keep proper records and report things correctly. CRA isn't going to make up a cost for the shares. So yes they are doing what they should be doing and treat it as a cost of nil until you show otherwise. That's how things work.

First of all you should have kept proper records. But since you didn't you need to go back to the bank or find some other way to get what the cost would be. I would suggest talking with a manager at the bank.

And yes get yourself a very good accountant to help you deal with this.
Apr 22, 2014
499 posts
Edmonton, AB
TD never prepares T5008 slips with a cost amount. The onus is entirely on you to prove your ACB.

1. Get an Accountant. Immediately. The CRA can be absolute dicks and will not have any mercy whatsoever. You need to be really careful and make sure you are filing Notices of Objection (to any reassessments) within the proper timeframe.
2. A T5008 slip is ONLY issued when you close out your position. Every single one of your slips is a sale. Do not try to match up sales and purchases. That's a lost cause since you do not get a T5008 slip for a purchase.
3. You absolutely need to find investment statements. I always keep copies of mine. You need to hassle TD until they can get you something.
4. Failing that, I would list every T5008 in excel with the proceeds listed. Then in the cost field, I would use the average cost for like the month before the sale (or whatever timeframe you think is appropriate for the length you held the stock). Print out supporting docs and send them all to CRA. It's not really adequate proof but maybe you can make a good settlement. But get an Accountant.
Deal Addict
User avatar
Dec 13, 2016
2651 posts
How can CRA go that far back? I thought the limit on personal taxes is 4 years?

Did you report your transactions?

Any tax lawyer should be able to dismiss it.
Jul 18, 2016
2014 posts
BiegeToyota wrote:
Jun 7th, 2017 11:39 am
How can CRA go that far back? I thought the limit on personal taxes is 4 years?
The reality is that limitation rules don't apply where there is fraud or willful neglect.

You can read all about it here. Try googling: cra time limit fraud
Deal Expert
User avatar
Jan 27, 2004
39988 posts
T.O. Lotto Captain
Thats a huge cluster vuk.
You need professional help. $700k bill and cra bills cant be wiped out from bankruptcy. If you somehow don't solve this you'll be in running for the rest pf your life.

But it isnt that bad... with all banks you can request a tracing request. They may charge you per hour and per document you bring up.
You may have to bring it up to the manager. Or the managers manager. Or maybe even up to ombudsman.

The reason the first line doesnt do it is bc most people don't want to pay the $50/hr for the tracing. Bill could end up being hundreds for an extensive search. And there is the burden of that employee telling you "you owe us $500 for an extensive trace and nothjng showed up...". Realistically you'll find something. Thats just worst case scenario bc they don't guarantee tracing request.

But yah.. that'll get you what you need.
Deal Addict
Jan 21, 2014
3609 posts
OP, there is hope. I was told by someone who works for TD Waterhouse that it is possible to retrieve transactions older than 7 years, you just need to pay a fee. Regardless how much the fee is, I am sure it would be much better than $700K
Deal Addict
User avatar
Dec 13, 2016
2651 posts
bewiseman wrote:
Jun 7th, 2017 12:32 pm
The reality is that limitation rules don't apply where there is fraud or willful neglect.

You can read all about it here. Try googling: cra time limit fraud
Don't they need proof?

The only reason I can see for this is if op didn't report these transactions on his return.
Jul 18, 2016
2014 posts
BiegeToyota wrote:
Jun 7th, 2017 7:18 pm
Don't they need proof?

The only reason I can see for this is if op didn't report these transactions on his return.
After dealing with issues with my student loans, I can tell you that the normal rules don't really apply to the government. At least, not unless you plan on spending and risking a pile of money fighting them in court.

In the case with the OP, they suspect fraud or willful neglect. The onus is now on him to argue otherwise. Of course, you're right, if he wanted to hire a lawyer, he might be able to defend himself on the basis that you are arguing.

Perhaps I am missing something here, but it sounded to me like he DID fail to report these transactions. Otherwise, there wouldn't be an issue. However, I am not suggesting ill intent. It sounds like he lost a bunch of money and assumed he didn't need to report a loss.
Deal Guru
User avatar
Oct 3, 2006
10372 posts
There's some bad advice in this thread. OP I strongly suggest you consult a lawyer or law firm that specializes in tax law. The courts have ruled that in order for the CRA to re-assess an individual tax return beyond the normal reassessment period (3 years), the crown must establish both that there was a misrepresentation and that misrepresentation was attributable to neglect, carelessness or wilful default. It is not easy to prove that connection. There's a lot of good information here: ... _paper.pdf