May 1, 2013
THE SEVEN PAGE CRA REFUSAL TO ASSESS PACKAGE
Reality? Or just another CRA “Rip Off” scam?
This is an incredible period of scams from those we would least expect. First with the tax shelter programs and now from CRA - who dares to call itself a government agency.
Talk about hitting after the whistle! In this latest attack on donors and their legitimate refunds, they have stooped to yet another new low. It’s truly amazing, really, when you think about it. Get the donors to “voluntarily” withdraw their legitimate claims for a refund (so CRA gets to keep them) and then have the donors give up all their legal and civil rights so they can’t take legal action against the CRA when they find out that they have been duped!
This has to be one of the most incredulous scams in Canadian history by manipulating Canadian taxpayers’ blind trust in what they perceive to be government.
I have to admit, when reviewing this package it stirs the emotions. For most taxpayers that’s the emotion of fear in ignorance. For myself, it’s the emotion of anger over the blatant betrayal of the public trust. Double-talk to get the taxpayers to screw themselves and then relieve CRA of all culpability and legal through a “waiver” liability in this ingenious scam.
Tax payers who fall prey to this ploy by following these instructions and signing the waiver are the foolest of fools. But then again, CRA knows this as they always attack the weakest people the most. The little people, so that they can get away with their shameful shenanigans.
Setting emotions aside, let’s look at this logically and legally to answer the question “Will the CRA actually follow through on this?” After all, their usual double-talk makes us assume and read into things that aren’t in fact reality. For example, at the beginning of the letter they say “We have not assessed your 2012…” This does not say they won’t, or will. It just says so far they have not because they are waiting for a duped donor to foolishly and voluntarily (because they think they have to) withdraw their claims in order to get their refunds (which they actually won’t get because they withdrew their claims).
So what if you don’t withdraw your claim and what if you don’t waive your legal and civil rights? The CRA will have to, be forced to, assess your return. This then, is an insidious trick to rip off taxpayers legitimate refunds and then have those same victimized taxpayers release them from all legal liability and responsibility. Absolutely amazing and totally disgusting considering the nature of our democracy and what our country is supposed to stand for when it comes to fairness and values.
Looking at this legally, understand that the CRA has a “statutory” duty to assess. There is no choice here. If they don’t, they are accountable. Plain and simple, it’s the law. The law (Income Tax Act) is quite clear on this. The CRA has a duty to assess with all due dispatch. If they refuse to, they break the law, and are in serious trouble. They have to assess and they have to allow the claim (unless of course you can be conned into withdrawing it).
Why would they even consider proceeding with this threat to not assess when there is no advantage to them, just problems? All they do is:
- Hurt themselves and Canadians in general
- Go against the recent 2013 budget where it was clearly stipulated this would not happen
- Show a flagrant disregard for and break the law taking on liability
- Use un-democracy and anti-law to break their own rules
- Make the Minister of National Revenue directly culpable and subject to many legitimate class action law suits
- End of the day, still have to give up the refunds anyway, unless the claims are withdrawn by the taxpayer
- Taxpayers have no obligation to pay tax until they’ve been assessed. No tax is payable until this is done
CRA can’t just pretend the law doesn’t exist nor can they just change the law on the fly whenever they feel like it to suit themselves.
This is not the first time the CRA is testing its limits on taxpayers by threatening to deviate from the law, until taxpayers push back through appeals and the federal tax courts. When pushed back, they have always been quick to retreat too. Unfortunately it takes time to commence actions. Usually 90 days or more and actions on this, there will be – rest assured. So, what to do in the meantime.
- Do not sign the waiver. If you do, you will be waiving your legal and civil rights forever.
- Do not withdraw your claim for your refunds. In both cases neither gives you any benefit for doing so. Don’t be tricked and duped. In fact, put CRA on the hot seat by doing nothing.
- Send a letter to Pharma Gift/Mission Life asking what they are going to do about this and demand action. After all, they have a legal fund for this purpose. Below is a sample letter or use your own words.
In summary, this again appears to be nothing more than another CRA tactic to scam and deprive donors of their legitimate refunds and therefore no action should be taken other than sending an email or letter to either Pharma Gift or Mission Life demanding a response and action on this. Also, if you electronically filed, then when asked, have your tax person send CRA the T5003 and the two donation receipts. That’s it.
I hope that you find this helpful and encouraging especially in regards to this rather threatening package.
Paul Lauzon, CFP, CHFC, CLU, EPC, PGS
MAY 15 UPDATE: The Federal Court of Canada agrees with me! See the RULING
Dear Mission Life Financial or Pharma Gifts International:
I participated in your 2012 Donation program and have filed my receipts, albeit received late, to get my tax refund. Instead of a refund I have received a seven page package from the CRA consisting of:
- A three page letter saying that CRA will not assess my tax return for up to two years until they audit your program thus holding up my refund
- A request for me to withdraw my donation claim and therefore lose my refund along with a loss of my monies paid to you in the program
- A demand that I sign a waiver to waive all of my legal and civil rights to challenge CRA
- Two news releases, the first sent out on this subject in October of 2012
I want to know why you have been silent on this if you have known about this since October 2012 and I want to know what you have been doing about this to protect my interests as a donor and my tax credits.
As you have a legal fund for this purpose and access to legal counsel and have made a lot of money on this program from donors, and now I am faced with no assessment, no credits, and in a position to lose both my credits and money for participating in the program. I want to know what you are going to do about this.
In fact, I demand, as a donor of yours, that you do something to address this head on with the CRA and let me know the outcome. I anxiously await your reply on this.