According to a recent CBC news story, a man named Justice Mounsey had his personal information hacked from a Canada Revenue Agency (CRA) website in 2020. As a result, fraudsters applied for government benefits and obtained credit in his name without him knowing about it. Specifically, the CRA has been after him for about CAD$40k in false Employment Insurance and Covid benefits that the fraudsters obtained in Mr. Mounsey’s name.
Although the article doesn’t go into specifics of exactly how the CRA is claiming Mr. Mounsey owes them money, based on our knowledge of how the CRA works, he must have received an assessment or re-assessment of tax owing in order to be told that he “owes money”. From the sounds of it Mr. Mounsey is following what seems like a reasonable course of action; he is trying to ‘clear his name’. From the story, it appears as though Mr. Mounsey is under the delusion that interacting with the CRA will bring some results. In our experience, calling up the CRA and seeking to speak to someone reasonable who can address what is obviously a mistake (and what is obviously the CRA’s fault in this case) is rarely, if ever, an effective method to get results with the CRA, regardless of the reason for the problem.
What we would tell Mr. Mounsey is that he has to file an Objection in a timely manner, specifically within 90 days of the date of Assessment/Re-assessment. We consistently run into potential clients who have wasted time trying to call in to the CRA, speaking to numerous people, being told they will ‘look into it”, but nothing happens. The problem is that once your 90 days to file an objection is up, you then have to get permission to object. A taxpayer at that point has one year from the end of the 90 days to apply for permission to file an objection. If Mr. Mounsey, or any other taxpayer, misses that deadline, well then you owe the money and there is nothing we, nor anyone else can do about it!
In the recent Case of Wong v. HMQ, a taxpayer did exacty what Mr. Mounsey appears to be doing. Mr. Wong called in trying to get someone to talk to about what was obviously a mistake from his and Mr. Wong’s perspective. He did that for about two and a half years. When Mr. Wong eventually tried to get the matter resolved in tax court, the court had no choice but to reject his claim for relief because he did not file an objection in a timely manner. Whether Mr. Wong and his wife actually by law owed the amounts at issue was irrelevant; he had to pay regardless of the merits.
Filing an Objection may not get an instant response (but neither will phoning the CRA) as CRA response times are 3 to 36 months depending on the nature of the issue and the region you live in. However, filing an Objection will protect Mr. Mounseys (and any taxpayer) future rights to dispute the assessment/re-assessment before time runs out! It will also initiate a process that will hopefully eventually lead to a proper resolution.
[This note does not constitute legal advice, rather a general comment on procedure when dealing with the Canada Revenue Agency. Please seek legal advice if you face similar circumstances.]