When the Taxman Becomes Abusive: CRA Complaints

Dealing with tax problems can be stressful. Trying to communicate, negotiate or resolve problems with an immense bureaucratic organization can also be stressful.  Put those two challenges together, and for many individuals dealing with the Canada Revenue Agency (CRA) can leave them frustrated and mistreated, while their problems remain unresolved.

The CRA has its own Taxpayer Bill of Rights, which outlines in detail the fair treatment and professional service that each taxpayer is entitled to receive.  This Bill can be found on CRA’s website, at http://www.cra-arc.gc.ca/E/pub/tg/rc4417/rc4417-13e.html. Right #5 clearly states:  “You have the right to be treated professionally, courteously, and fairly”.   CRA’s policy goes on to state: “You can expect we will treat you courteously and with consideration at all times, including when we ask for information or arrange interviews and audits. Integrity, professionalism, respect, and co-operation are our core values and reflect our commitment to giving you the best possible service. You can also expect us to listen to you and to take your circumstances into account, which is part of the process of making impartial decisions according to the law. We will then explain our decision and inform you about your rights and obligations regarding that decision”.

While this is all well and good, the reality many taxpayers encounter includes dealing with CRA agents who are difficult or impossible to contact, and aggressive or belligerent officers who won’t listen to their concerns and who resort to threats or intimidation.

If you feel your service rights were not respected by the CRA, there are three steps that you are encouraged to follow as a means to resolving your service-related issue:

- Try to resolve the service-related issue directly with the CRA employee with whom you are dealing.

- If a resolution is not possible, you can ask to speak with the agent’s supervisor.  Be aware that any agent who refuses your request to speak with their supervisor is acting outside of CRA service standards.

- You can file a formal complaint with the CRA’s Service Complaints, using their Form RC193, Service-Related Complaint. The Taxpayer Bill of Rights clearly states in Right #16: You have the right to lodge a service complaint and request a formal review without fear of reprisal. The RC193 form can be obtained online at www.cra.gc.ca/forms. There is no fee to file a service complaint. 

Once a service complaint is filed, a complaints officer will be assigned to the case and will investigate the complaint. Your complaint will be reviewed to resolve it in a fair and timely manner. You will be kept informed by the officer of the status of your complaint and they will ensure that you receive the outcome by telephone or mail.

As a final recourse, you can contact the Office of the Taxpayers' Ombudsman if your complaint has still not been handled to your satisfaction. Once CRA’s complaint resolution process is complete, the Taxpayers' Ombudsman can be contacted to give a final and impartial review of your complaint.

Feeling mistreated, discouraged or stressed because of your dealing with the CRA? Tax Solutions Canada can help. Call us today at 1 888-868-1400.

Is it Worth Investing Your Time and Effort into a Taxpayer Relief Application?

Tax debts typically come with serious penalty and interest charges. Fortunately, as its name indicates, the Taxpayer Relief program (formerly known as fairness) allows taxpayers to apply for relief from penalty and interest charges. Individuals and businesses can request remission of penalties, arrears interest, and/or waiver of the accruing interest.

The legislation also enables taxpayers to request acceptance of late, amended, or revoked elections; as well as make requests for refunds or reductions in amounts payable that are beyond the normal reassessment period.

Getting relief from penalties and or interest, or acceptance of a statute barred reduction can often save folks huge money and make a life changing difference.

How to apply for Taxpayer Relief?

Filing a Taxpayer Relief application requires the completion of an RC4288 form (available on the CRA’s website) or submission of a letter outlining the specifics of the request. The Agency has the discretion to grant relief from penalty and/or interest when the following types of situation prevent a taxpayer from meeting their tax obligations:

·         extraordinary circumstances;

·         actions of the CRA;

·         inability to pay or financial hardship;

·         other circumstances

If filed using the correct form, with sufficient supporting documentation, a response from a Taxpayer Relief Officer can take anywhere from 4 months to 1 year or more depending  on the program’s workload. The decision-making criteria used for determining who will be granted relief are:

·         taxpayer’s history of compliance;

·         whether the taxpayer knowingly allowed interest to accrue on a debt;

·         whether the taxpayer exercised reasonable care and was not negligent in conducting their affairs; and

·         whether or not the taxpayer acted quickly to remedy any delay or omission.

Taxpayers often request relief on the basis that “I cannot afford to pay my taxes, so I did not file my tax return, and then the CRA assessed me big tax debt, I can ask for relief because I had no money.” Big mistake. Failure to file a tax return is a criminal offence which can result in prosecution, so you should always file. Before an application is made to the Taxpayer Relief program, all outstanding returns must be filed up to date, otherwise the CRA will not even consider the application.

If you’re thinking that the Taxpayer Relief Provisions may be an option for you, do some research or speak to a tax solutions professional about how to construct the best argument for relief. And you should always make arrangements to pay the penalties and interest in any case in order to stop the interest clock from ticking should the request be denied. However, if you are not satisfied with the Officer’s decision, you may apply for a second-level review and there is an option for judicial review if the second-level review is unfavourable.

The Taxpayer Relief program is a great option, if you qualify, to reduce penalties and interest. Ready to file? Call Tax Solutions Canada today at 1 888-868-1400.

Back to Basics: An Overview of Remission Orders

Taxpayers who have exhausted all available avenues of relief from a tax liability potentially have one last remedy for hope: an application for a remission order. Today’s blog is dedicated to helping you figure out how to navigate and file an application.

What is a Remission Order? A remission order is a remedy available under subsection 23(2) of the Financial Administration Act that provides the Governor in Council the power to grant relief from tax, or penalty (including any interest) where the collection of the tax or the enforcement of the penalty is unreasonable, unjust or contrary to public interest. Unlike the Taxpayer Relief Program, remission orders do not have a limitation on which tax years they can grant relief.

Process for Filing an Application
A remission order must be recommended to the Governor in Council by the Minister of National Revenue who heads the Canada Revenue Agency (CRA). As a result, in order to start the process, taxpayers must file an application for a remission order with the CRA’s Remissions and Delegations Section of the Legislative Policy and Regulatory Affairs Branch of the CRA. Once an application is submitted, a CRA officer reviews the case, makes a decision and then informs the applicant of the outcome.

In general, remission orders will only be recommended by the Minister once all available avenues have been exhausted including objections, appeals and taxpayer relief requests. In addition, the application must demonstrate that a remission order is necessary because the taxpayer meets one of the following circumstances:

·         unintended results of the legislation;
·         financial setback coupled with extenuating factors;
·         incorrect action or advice by CRA officials; or
·         extreme hardship.

Appeals
Should the applicant disagree with the decision of the CRA, they may request a judicial review of that decision in the Federal Court – a process akin to an appeal. The court analyzes the facts of the case determines whether the CRA exercised its discretion properly. Should the court decide in the taxpayer’s favor, the matter is referred back to the CRA for reconsideration.

Conclusion
Remission orders are complicated and a taxpayer’s final chance at relief from a tax debt. Taxpayers are encouraged to seek professional advice prior to applying for a remission order. The professionals at Tax Solutions Canada have significant experience in preparing remission order applications and can provide a free consultation to discuss your specific circumstances and eligibility.

Want to know more or need assistance? Please Contact Tax Solutions Canada today at 1-888-868-1400.

The GST/HST NRRP Rebate for Residential Rental Property

Taxpayers who purchase a new condo or home to earn rental income may qualify for a partial rebate of the GST/HST paid on the purchase through the GST/HST New Residential Rental Property Rebate (NRRP).

Similar to the New Housing Rebate, the NRRP offers landlords a partial recovery of federal and provincial sales tax on new residential rental properties. Typically, new home buyers in Ontario are charged 13% HST on their purchase, consisting of a 5% federal tax and 8% provincial tax. The NRRP refunds 36% of the federal portion of the HST (up to a maximum of $6,300) and 75% of the Ontario portion of the HST (up to $24,000). Other provinces can also expect similar treatment for the federal portion of the tax paid on new home purchases. Provincial rebate rules vary from province to province but usually provide similar rebate percentages as well.

Eligibility

You qualify for the NRRP if you meet any of the following criteria:

• You paid GST/HST when you bought a new or significantly renovated residential building, an interest in the complex, and the complex or complex units leased as a residential property;

• You're a builder and funded the GST/HST on the self-supply of a residential building, or you paid for an addition to a residential building with multiple units leased as a residential property;

• As a builder, you funded the GST/HST on the self-supply of a residential building or paid for an addition to a residential building with multiple units, and were involved in a sale that is tax exempt and the tax-empty multi-year lease of land is covered by a written contract;

• You're a corporation that looks after co-operative dwellings and funded the GST/HST on the purchase of a newly built or significantly renovated residential building, or you look after the builder's interest in the building and rent units for residential use for at least a year;

• You're a co-operative dwelling and funded the GST/HST on the self-supply of a unit zoned as residential or for the addition to a residential building with multiple units, and you rent units for residential uses for at least a year; or

• You funded the GST/HST on the self-supply of land that you also rent to someone else for at least a year to use as a residence.

A key requirement of the NRRP is that landlords must ensure their property is leased for a minimum of at least one year before disposition. The rebate may have to be repaid if the property is sold within one year after it is first occupied as a place of residence and the purchaser is not buying the unit as a primary place of residence for themselves or a qualifying relation.

It is also important to note that unlike the New Housing Rebate, the NRRP is never adjusted into the purchase price of the property by the builder of a new home. The NRRP requires a separate application to the Canada Revenue Agency and usually takes anywhere from six to eight weeks to process.

Contact the professionals at Tax Solutions Canada for a free consultation on how to make the NRRP work for you. Call us today at 1 888-868-1400.