Personal Finance

Feedback needed - negotiating with CRA

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  • Sep 7th, 2016 12:29 pm
Member
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Dec 11, 2009
216 posts
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hamilton

Feedback needed - negotiating with CRA

My friend B. went through a period of indiscretion in the nineties and did not pay enough income tax. Part of this was driven by multiple disabilities, including mental and physical illness, and active alcoholism/addiction.

This friend sobered and went to work full time for ten years. They made several attempts to reconcile the matter, also requesting a fairness consideration for disabilities. It didn't get resolved, but they didn't get an income tax refund during that time, either.

Excepting active addiction, these disabilities recurred in 2015, and B. lost his job. He has not been able to work since and is undergoing extensive physical and psychiatric therapy. His prognosis is not good.

CRA finally sent a 5-digit bill 2 weeks ago. 75% of this is penalty and interest.

B. will make restitution to the best of his ability, and has started volunteering payments. However as part of accommodating his disabilities, he would like to deal with a reasonable human being, and to examine the damage objectively in light of his ability to pay.

Is there an elegant way of discussing the matter and negotiating with the CRA? Inputs are appreciated.
12 replies
Deal Addict
Dec 29, 2012
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Toronto
Why was the fairness request not granted?
Member
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Dec 11, 2009
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hamilton
B. compiled the information and submitted it as part of their income tax return and submitted to a specific individual. The fairness package was returned to him with no further explanation. B. was unable to contact this gentleman subsequently.
Deal Addict
Dec 29, 2012
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Toronto
He should complete Form RC4288 http://www.cra-arc.gc.ca/E/pbg/tf/rc4288/rc4288-16e.pdf and send it along with all supporting documents to the appropriate address on the form.

Just curious, who was the "specific individual"? (what was the person's position?)

Edit: When was the initial fairness request made? There is a 10 year limitation on making fairness requests. Also, which years does the recently received tax bill relate to?
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Dec 11, 2009
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hamilton
Exactly my point.

B. is acutely aware of his obligations to CRA. However, multiple disabilities have rendered him incapable of completing the paperwork without assistance. He cannot afford a lawyer or an accountant. He is willing and able to co-operate, but would like to deal with one person who is competent in working with a physically and mentally disabled person, and also to negotiate both a payment agreement AND some of the interest and penalties, because he is over 60 and on LTD.

I believe this comes under the heading of "accommodation".

The fairness request was made over ten years ago.

I have recommended that he contact the Minister's office; more drama.
Deal Addict
Jan 2, 2015
1633 posts
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Toronto, ON
The fairness request needed to be sent to a different address. You can only make fairness requests for assessments less than 10 years ago. Since he was significantly behind, he might still be able to make fairness requests for many of these assessments.

Does he have the disability tax credit?
Deal Guru
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Mar 23, 2008
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Edmonton
B needs to realize that he's not dealing with a small corner store or even his local bank. He can't request one particular person, or staying with one person. He needs to contact the address given, and the phone numbers given, and deal with whoever he needs to deal with.

If he can't, he may want to look into resources that can act on his behalf. An advocacy group for seniors or people with disabilities may have connections for him.

C
Deal Fanatic
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Jan 31, 2006
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FoFai2015 wrote: The fairness request needed to be sent to a different address. You can only make fairness requests for assessments less than 10 years ago. Since he was significantly behind, he might still be able to make fairness requests for many of these assessments.

Does he have the disability tax credit?
Having a disability tax credit will just reduced B tax liability not eliminate it, but it is helpful if B have one.
Member
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Dec 11, 2009
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hamilton
Thank you for your responses.

B. has a disability tax credit.

May I take this opportunity to remind you that the topic is negotiating with the CRA. This taxpayer's capacities are diminished, as is their ability to pay. They have made 4-5 attempts over the last 2 weeks to get through to the call center without success. I am aware of 2 other situations within the last 5 years under similar circumstances where CRA was entirely reasonable.

I'm trying to help B. Rather than escalate the matter to the Minister's level, I was looking for reasonable and fair options to resolve this. If these are not immediately apparent, the Minister's website states:

If you are concerned about your personal tax situation, send your correspondence to the following address
(Minister's address).

So that's the next step.
Deal Addict
Apr 4, 2013
1274 posts
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the pinch wrote: Exactly my point.

B. is acutely aware of his obligations to CRA. However, multiple disabilities have rendered him incapable of completing the paperwork without assistance. He cannot afford a lawyer or an accountant. He is willing and able to co-operate, but would like to deal with one person who is competent in working with a physically and mentally disabled person, and also to negotiate both a payment agreement AND some of the interest and penalties, because he is over 60 and on LTD.

I believe this comes under the heading of "accommodation".

The fairness request was made over ten years ago.

I have recommended that he contact the Minister's office; more drama.
He needs to appoint a Representative to work on his behave or take advantage of a Community Volunteer Income Tax Program (http://www.cra-arc.gc.ca/tx/ndvdls/sgmn ... s-eng.html) depending upon the complexities of his tax situation. I don't think anyone at CRA will complete the forms for him, as that opens the CRA to liability issues.

Contacting his Minister's Office may provide some insight into community organizations that may be able to help. Is it safe to assume that B. has not been consistent filing income tax?
Member
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Dec 11, 2009
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hamilton
Thank you.

B. has filed income tax returns every year on time. As I mentioned in my first post, they have not received a refund for many years.
Deal Addict
Aug 30, 2011
3537 posts
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Ottawa
I worked for CRA my entire career, starting with "Minister's Mail". My recommendation is to contact either his own MP, or send a letter to the Minister of National Revenue.

I had some problems with the CRA's incorrect assessment of my elderly aunt and uncle's tax returns (which I had prepared) a couple of years ago, and simply went straight to my MP. The issue was resolved quickly and efficiently. I was impressed.
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Dec 11, 2009
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hamilton
Thanks for the feedback, Ottawagardener.

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