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Sunday, February 4, 2024

In the event you thought the CRA would not comply with up on improperly claimed CERB and different advantages, assume once more

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Jamie Golombek: Tax authority sending out ‘notices of redetermination’ as COVID-benefit-related disputes hit the courts

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This week, the Canada Income Company started sending out Notices of Redetermination, advising some Canadians who could have acquired COVID profit funds for which they could haven’t certified, of money owed which have been established on their CRA accounts. This follows the Notices of Debt that Employment and Social Growth Canada started sending out in November 2021 to numerous profit recipients who acquired an advance cost of $2,000 of Canada Emergency Response Profit (CERB) in 2020.

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You’ll recall that as a part of its response to the pandemic, the federal government used an attestation-based course of to supply revenue assist to hundreds of thousands of Canadians, which relied on people figuring out for themselves in the event that they have been eligible for advantages based mostly on the established standards. However, it seems that not all who utilized have been finally eligible to obtain advantages, both attributable to an trustworthy misunderstanding of the principles, or, in some instances, merely making use of for CERB, or its alternative the Canada Restoration Profit (CRB), regardless of not assembly the qualification standards, whereas hoping the federal government by no means adopted up.

However now the federal government is, certainly, following up. In the event you acquired a letter, however nonetheless consider that you simply’re eligible for these funds, it’s best to contact the CRA and supply any further data required to validate your declare. In the event you do must repay again advantages acquired, the CRA and ESDC have said that their name brokers will work with people on a case-by-case foundation to seek out options to your state of affairs, together with making versatile cost preparations. There will likely be no curiosity or penalties utilized to any repayments.

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In the meantime, we proceed to see taxpayers going to Federal Courtroom, difficult the CRA’s determination to disclaim COVID-related advantages. These instances have had blended success. Final month, I shared the story of the Quebec taxi driver who went to court docket to problem the CRA’s determination to disclaim him the CRB. This follows a reported case a month earlier of the tutor who allegedly earned $5,250 of revenue, in money, and was denied his declare for the CERB. There was additionally a case earlier this 12 months through which but one other taxpayer was in court docket difficult the CRA’s determination, which concluded he was ineligible for the CRB in 2020 as a result of he didn’t earn $5,000 of revenue within the prior 12 months.

The landing page for the Canada Emergency Response Benefit.
The touchdown web page for the Canada Emergency Response Profit. Photograph by THE CANADIAN PRESS/Giordano Ciampini information

A brand new reported case, simply out final month, concerned a taxpayer who was difficult the CRA’s determination to disclaim him the Canada Restoration Caregiving Profit (CRCB). The CRCB supplied a $500-per-week taxable profit, for as much as 44 weeks, for somebody who needed to miss work to look after a member of the family in sure circumstances attributable to COVID. It was accessible beginning Sept. 27, 2020 and ended simply final week, on Might 7, 2022.

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To qualify for the CRCB, you needed to be a Canadian resident, current in Canada, and not less than 15 years of age with a legitimate SIN. You will need to have earned not less than $5,000 of (self-) employment revenue in 2019, 2020, 2021, or within the 12-month interval previous to the appliance date. As well as, you need to have been unable to work for not less than 50 per cent of your usually scheduled work week since you needed to deal with a member of the family for numerous causes attributable to COVID-19. For instance, you’ll have cared to your baby underneath 12 years outdated, or one other member of the family who required supervised care, as a result of their common care was unavailable for causes associated to COVID-19.

In 2020, the taxpayer utilized for the CRCB. He subsequently utilized for extra durations in 2020 and 2021. Following his utility, the CRA adopted up with him on quite a few events requesting additional data, notably documentation evidencing his income, his discount in work and his caregiving duties.

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In accordance with the CRA officer’s notes, the taxpayer refused to supply the requested paperwork and supplied conflicting data over the course of half a dozen cellphone calls. In a single name, the taxpayer claimed to look after his daughter whereas in one other he knowledgeable the officer that he didn’t even have custody of his daughter. In one other name, he claimed that he cared for his father attributable to a pre-COVID medical process and that his father lives with him 24 hours a day, whereas in one other name the taxpayer said his father and mom dwell collectively. In one more name, the taxpayer claimed to have labored and earned the prescribed minimal revenue, whereas in one other name he admitted to having not labored since 2017. The taxpayer later argued that he was paid $28,150 in money, however the money was not deposited in his checking account, nor was it declared on his tax return.

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In September 2021, the CRA denied his advantages. The taxpayer then requested a evaluation of the CRA determination which was carried out, with the CRA concluding, as soon as once more, in an October 2021 letter that the taxpayer merely didn’t qualify.

In November 2021, the taxpayer utilized to the Federal Courtroom, asking for a judicial evaluation as as to whether the CRA’s determination to disclaim the CRCB was “cheap.” The Crown introduced a movement to strike the taxpayer’s utility.

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An utility for judicial evaluation should set out the grounds to be argued, which means all of the authorized bases and materials details essential to assist the aid sought. The Federal Courtroom of Enchantment has beforehand set out the apply and procedures for notices of utility for judicial evaluation, in addition to motions to strike any functions, saying that “an applicant should set out a ‘exact’ assertion of the aid sought and a ‘full’ and ‘concise’ assertion of the grounds meant to be argued.” Certainly, prior jurisprudence has decided that “merely stating, in a discover, that (the CRA’s) findings are inaccurate with out explaining why or providing particulars, counts for little or no, if something.”

Provided that the taxpayer’s court docket utility included “no allegation as to how the CRA determination underneath evaluation is unreasonable and that it incorporates no materials details pertaining to the choice,” the choose used her judicial discretion to strike the taxpayer’s utility for judicial evaluation, which means the case won’t be continuing to trial. She additionally awarded prices to the Crown.


Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Managing Director, Tax & Property Planning with CIBC Personal Wealth in Toronto.



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