Tax, Taxes & the IRS

[BUDDIEE18]

W5: Auditing the taxman
http://www.ctv.ca/CTVNews/WFive/20120217/w5-auditing-the-taxman-120218/

George Hoff, W5 Producer

Date: Saturday Feb. 18, 2012 6:54 PM ET

Producing stories on the Canada Revenue Agency presents a number of challenges. For the past three years W5 has investigated cases where the CRA has erred in its rulings against Canadian taxpayers. In all the cases we have waited until a court ruled on a particular case.

For example, last year I learned about the case W5 investigates this year involving more than 700 fishermen in Newfoundland and Quebec. However the case was still before Federal Court so we waited until this year to report on this important case where more than 700 fishermen were treated unfairly by the CRA.

Some of our cases have come from you, our audience. After each CRA episode we receive hundreds of e-mails about your cases. We follow up on many but, as I have explained, W5 needs to know that the case has been ruled on by a court. This means that many complaints need to be monitored as it can take years for them to work through the judicial system.

Another avenue for finding cases is to read through the rulings by the Tax Court of Canada and even Federal Court. This involves many, many hours of reading the rulings by judges and then following up with tax payers as well as lawyers and accountants.

The fact is that many of the Canadians W5 contacts want to tell their story about their experiences with the CRA but are afraid. They tell us that they believe there will be some form of retribution from the CRA if they go public with their story.

In many cases the initial reaction we get from a taxpayer who has fought the CRA in court is a desire to tell us all about it. This year one taxpayer we contacted was almost in tears when we first talked. He desperately wanted to tell his story to W5. But then he changed his mind and stopped taking our calls altogether.

For three years now W5 has asked the government for an interview about how the CRA handles disputed cases. Every year we have been turned down. This year the office of the Commissioner of the CRA, Linda Lizotte-MacPherson sent W5 a letter saying; "Regrettably, we must decline the request." We also requested an interview with the Minister of Revenue, Gail Shea. The response from her office was much shorter, an email that provided no reasons stating only "we will be declining your request."

While it is frustrating that the government refuses to talk to W5 we will keep pursuing interview requests.

Another avenue we are pursuing is through Access to Information requests. The CRA will not discuss specific cases with W5. So we have requested all emails, memos and other communications from CRA and the Minister of Revenue about our coverage. This week we learned that there are 2,000 pages that refer to W5. Those documents will be made available to us in the coming weeks. Needless to say we will be pouring through them to see if there is anything relevant to our continuing investigations of the Canada Revenue Agency and how it treats Canadians.

Every year after W5's CRA investigation is broadcast we hear from many taxpayers who are also doing battle with the taxman. They provide a jumping off point for future stories and show that many Canadians feel ill-treated by the tax department and are demanding fairness.

Watch the full report on W5, Saturday at 7 pm (check local listings)


Email W5 directly about this story

Comments are now closed for this story

Concerned Executor
said
7 3

As executor of my mother's estate, the first thing my mother's lawyer advised me was pay the CRA and divulge everything. If there is one error they will start auditing you personally. There is definite fear mongering going on with CRA. Any agency that acts beyond reproach is clearly up to no good.



skydyvr
said
4 3

I'm a senior living on a small fixed income, in the bottom 10% of taxpayers. Several weeks ago I got a call from CRA in Ottawa asking when they could expect remittance of last year's balance owing, $40.32. I was shocked that anyone would bother with small potatoes such as me. My reply was that I would pay them as soon as I had the money; I think I'll be getting a refund this year.



Matt
said
4 5

You can tell your own stories about CRA and you can have your opinion but I've experienced enough to know that CRA does there best to capture enough information to come to a conclusion. If you beat the taxman, it might not be because you were correct, it might be because the auditor made a mistake and Appeals/Courts throw entire cases out for mistakes...small or big.I've been around the block several times, coast to coast and can say one thing, THE UNDERGROUND ECONOMY IS HUGE! The CRA attempts to keep people honest. I believe most people are simple, honest people who make mistakes but you must pay for your mistakes!



EJ
said
10 3

I took the CRA to court a few years ago and I won. The judged ruled in my favour. I can't go into details, but i think I am probably one of the few rare cases that win against them.



Cheats
said
12 4

@ Rick- This story has nothing to do with tax cheats! This has to do with the tax department cheating the taxpayer! Perhaps not puposefully, nonetheless, they hold all the cards and we are at their mercy with whatever decision they dish out at us. Come to think of it, aren't they supposed to be working for us rather then the other way around... sounds more like organized crime to me.



Les from Alberta
said
16 4

Wait until W5 does a story on GST audits if you want to see how corrupt the system is. The GST auditors continue to audit and disallow everything until it gets to the point where you give in and pay the amount because it is costing you more to have the review with the wasting of your time, your office staff, your accountant. Most of the auditors have never run a business and have no idea about the costs of running a business. It is the biggest scam going in the country to date.



th.mtnann
said
16 4

Those who refuse to complain and or go on the record have good reason to be afraid of the CRA. I had a friend who was audited by the CRA. When he complained about it, he was threatened. When he finally did complain he was charged. He won his case, but was told 'off the record', that they would be watching him for the rest of his life. He left Canada 4 years ago. He since has said that its wonderful to live somewhere where the tax department acts ethically and follows the law. This can happen to any of us.



GaryinWpg
said
18 3

Thankyou CTV for your work on this subject. Please continue, this type of journalism is sorely needed in an age where it seems "talking points" is news. Thank you again.



can't say
said
8 15

Because of stringent privacy rules, no one from CRA can discuss an individual's account, so what gets reported may not be the full truth. If CRA's made an error, there are many channels for a taxpayer to use to get that error corrected. If it's an interpretation of a law, then CRA has to rely on legal opinions, interpretations, court decisions. The onus is on CRA when it goes to court to prove its case beyond a doubt. What should be asked is how individuals & groups are using loopholes to get refunds that they clearly are not entitled to, and cheating Canada. That's the crime and the real story.



Brian
said
8 1

Our tax laws are too complex and open to fights with the CRA. Simple, gross income and basic personal exemption, chartity deductions, child family deduction, lower the tax brackets and that is it. Net income,pay tax.



chel in the Peg
said
10 2

@ Luc from Carp - absolutely. I felt the same way when my mother was audited. At the time, she was in her late 50s, worked in a coffee shop, and lived in subsidized housing. Of course CRA found nothing (she kept impeccable records), but honestly you'd think they'd have bigger fish to fry.



rick
said
23 63

My wife and I work for CRA, and while mistakes happen, we rely on the honor system for people to submit their returns, and focus on a small percentage for audits. I've worked for collections and other areas. I understand that people can become frustrated by CRA's policies and errors, but we all have to pay taxes, and many millions of dollars are owed by fraudulant taxpayers. Perhaps W5 needs to go back to school and study real journalism for a balanced story on how CRA compares to the IRS and other national tax agencies, and how many tax payers cheat the government compared to other countries.



CraigW
said
34 4

As a tax professional, my experience is that CRA is not vindictive and taxpayers should not be afraid to tell their story. Indeed, by making their story public, taxpayers can help others who may be in a similar situation and if the review is ongoing, may get their case kicked up to a supervisor who can intervene if an auditor isn't being fair. We just need to remember that auditors are just like everyone else, some are good at their job, and some aren't.



Joe
said
43 8

Being an government they should fully disclose how they handle disputes. To just decline just wears away at the little credibility that these agencies have with regular Canadian citizens. Sounds like the government will fight the disputes all the way to court because people can not afford to pay the legal fees to fight the government and will abandon their dispute and just pay out!!



SAM
said
38 6

Please press on with this story, W5. Thank you for bringing this into the light.



David J
said
16 52

Frankly, I am pleased that the CRA is denying your efforts to investigate their rulings. At a time when the public is demanding accountability from the government and its agencies, it is refreshing to see that the CRA takes confidentiality seriously. Even when individuals make their complaints public, for the CRA to discuss rulings publicly would set an unfortunate precedent. People who have a complaint with the CRA should be contacting a lawyer, not the media.



Proud Canadian
said
49 6

It's about time the government and the people realize. THE GOVERNMENT WORKS FOR US! WE DON'T WORK FOR THE GOVERNMENT!



Luc from Carp
said
50 3

How about an investigation about those who defraud the Canadian population by willfully not paying their taxes and then reaching a negotiated settlement at a fractioon of what is owed.



Robert B
said
11 33

Just when you think Csis is secretive, CRA is not only secretive but down right Syrian, in their treatment of The very people who pay their wages!!! Just another good reason for peole to OCCUPY/ Revolt?? Let her rip Canada, I'm anxous to see what the next 10 years will bring.




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