From: leo@askbiblitz.com   
      
   On Tuesday, November 20, 2012 4:30:09 AM UTC-8, Alan Baggett wrote:   
   > CRA seizes funds from woman over late mother’s tax debt : CRA SOTW   
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   >    
   >    
   > By Hugh Adami, Ottawa Citizen    
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   >    
   > Not satisfied after raiding the investments of an old and sick woman facing   
   a huge tax debt with the federal government, Canada Revenue Agency then turned   
   on her daughter to improve its take.   
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   >    
   >    
   > It was late 2009, and Joy MacKinlay’s mother, Mildred Williamson, was   
   suffering from dementia and living in a retirement home in Victoria, which was   
   costing her dearly. So when Williamson received an insurance settlement of   
   $25,000 for injuries she    
   suffered after being hit by a car, she asked her daughter, who acted as her   
   power of attorney, to invest it. Both wanted to be certain that money would be   
   available as Williamson’s needs for personal care became greater.   
   >    
   >    
   >    
   > MacKinlay, a federal public servant in Ottawa, sent a cheque for $25,000 to   
   her brother, Mark Crapelle, who lived out west. As he had done with $75,000 —   
   left over from the sale of his mother’s condominium after he paid off a number   
   of her bank and    
   credit card debts — Crapelle put the $25,000 in an investment to which she had   
   access.   
   >    
   > Months later, Canada Revenue Agency came calling.   
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   >    
   >    
   > CRA had been monitoring Williamson’s bank account. Her debt to CRA was   
   closing in on $400,000. She had claimed tax deductions in the late 1990s, some   
   for offshore investments that turned out to be scams and robbed her of great   
   deal of money.    
   >    
   > MacKinlay says she was aware of her mother’s tax problems when she took over   
   as power of attorney in 2008, but couldn’t get much information out of her,   
   perhaps because of the dementia. MacKinlay says that what her mother owed   
   included a fine and    
   compound interest.   
   >    
   >    
   >    
   > MacKinlay says her mother had little left as a result of the investment   
   scams, so there was little money for Canada Revenue. McKinlay says she   
   informed the agency that it would have to wait until her mother died to get   
   anything because whatever she had    
   was required for accommodation and care-giving. Williamson eventually moved to   
   a nursing home and died in March 2011, at age 84.   
   >    
   >    
   >    
   > MacKinlay says her “intention had always been to allow (my mother) to live   
   with dignity” and worry about the tax debt afterward. When Williamson passed   
   away, there was little left in terms of money, says her daughter. She had   
   $4,000 in the bank and    
   that went toward funeral expenses.   
   >    
   >    
   >    
   > After CRA found out about the $25,000 and $75,000 investments made on behalf   
   of Williamson, MacKinlay says, the CRA went after Crapelle to recover the   
   money, using a provision under the Income Tax Act. Section 160 of the act   
   allows the CRA to intervene    
   when a tax debtor transfers money or other property to a person with whom the   
   debtor does not deal at arm’s length. CRA has the power to recover the money   
   or property, and even assess the recipient for all of debtor’s taxes.   
   >    
   >    
   >    
   > So Crapelle pulled the money from the $25,000 and $75,000 investments and   
   gave it to the agency, then, the agency turned its attention to MacKinlay.   
   Using another provision, CRA assessed her $25,000 for the amount she had given   
   her brother to invest    
   for their mother. Under Section 159, someone who has power of attorney for a   
   tax debtor and control of their funds is responsible for having the debt   
   repaid. Canada Revenue decided MacKinlay had violated the act by not giving it   
   the $25,000 to pay down    
   the tax debt.   
   >    
   >    
   >    
   > MacKinlay argued she didn’t owe the money as it was now in federal   
   government coffers, and that if she paid the agency $25,000, it would be   
   doubling its entitlement. But that didn’t matter. MacKinlay’s involvement was   
   considered under a separate    
   provision.   
   >    
   > MacKinlay paid up to avoid the compound interest, and then appealed the   
   assessment. She got nowhere. So MacKinlay hired lawyer Adam Aptowitzer, a tax   
   litigator, who is trying to get the money returned through a remission order   
   from Treasury Board.   
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   >    
   >    
   > Aptowitzer says he has come across many “bizarre” and “crazy” stories   
   “dealing with (CRA) people who refused to be sensible.”   
   >    
   >    
   >    
   > Though CRA was simply upholding the law, Aptowitzer says, “You also want   
   them to be reasonable and say, ‘Look this is clearly not how the law was   
   intended to be applied.’ ”   
   >    
   > He says he doesn’t believe sections 159 and 160 of the Income Tax Act were   
   written “to deal with this specific situation. I think that much is clear.   
   It’s only by putting the two together that you get this kind of situation, and   
   it was probably    
   something that was overlooked.”   
   >    
   >    
   >    
   > Last March, Aptowitzer spoke with Justice Department lawyers representing   
   Canada Revenue to see if “saner heads would prevail.”   
   >    
   >    
   >    
   > One of the lawyers, he says, felt the government was entitled to $50,000,   
   while the other didn’t seem so sure. But, in the end, they told Aptowitzer he   
   could fight the government in court. A Federal Court challenge would have cost   
   MacKinlay another $25,   
   000 on top of what she had already paid Aptowitzer, so she decided against it.   
   “I thought: All you need is a judge on a bad day and I’m screwed.”   
   >    
   >    
   >    
   > Considering how far Aptowitzer got with the federal lawyers, seeking a   
   remission order to get MacKinlay’s money back would appear to be a very tough   
   task. Canada Revenue refused to comment on the case, but said in an email that   
   “remission orders are    
   issued only on a very exceptional basis.”   
   >    
   >    
   >    
   > Wrote spokeswoman Rebecca Merrett: “Highly trained and objective CRA   
   officials review all requests for remission, and then either deny the   
   remission request or make a recommendation to the Commissioner of the CRA and   
   the Minister of National Revenue.”   
   >    
   >    
   >    
   > From there, Merrett said, a ministerial recommendation for remission is sent   
   for consideration to the Governor in Council, who is empowered by Treasury   
   Board.   
   >    
   >    
   >    
   > © Copyright (c) The Ottawa Citizen   
   >    
   >     
   >    
   > -----------------------------------------------------------    
   >    
   > Miss a Tax Tale Miss a lot!    
   >    
   > Visit the CRA SOTW Library at http://canada.revenue.agency.angelfire.com    
   >    
   > ------------------------------------------------------------    
   >    
   > Alan Baggett – Tax Collector’s Bible -  http://taxcollectorsbible.com/   
      
      
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