Tax emergency in Canada
December 20, 2013 8:15 AM Subscribe
A disabled relative is having all the money automatically taken out of her account by the Canada Revenue Agency (CRA). She doesn't owe taxes (all she has to do is file and they will give the money back) but this will take many months. What can we do?
posted by Dreadnought to Law & Government (10 answers total) 3 users marked this as a favorite
This is in Ontario, Canada.
A close relative has not filed taxes since 2008. She didn't think this was a big deal, as her work deducted much more from her pay than she owed in tax, so upon filing she would get a substantial refund. She lives on her own with a disabled child for whom she is the sole caregiver (and has been through this entire period).
Almost a year ago she had a major stroke which laid her low for several months and left her unable to speak. She is slowly recovering her power of speech, but is unable to use a telephone. While she is not well enough, yet, to go back to work, she is back living on her own and caring for the kid and living on disability insurance. She is, needless to say, fiercely independent (to a fault).
Some time after the stroke, she received notice that the CRA thought that she owed a large sum in tax (more than all the money she has and all the money we have put together) and that they would begin to seize her bank accounts if she didn't file. She was completely unable to deal with the issue at the time, but she didn't tell us because "she didn't want us to worry".
This has now transpired, and we are indeed worried. All the money from her accounts is gone, and any money put into the accounts will also disappear. She has $200 cash, a credit card and a cheque from her insurance company that she can't put into the bank.
Filing her back taxes is straightforward: her accumulated pay deductions and deductions for being the caregiver to a disabled child are more than enough to cover the debt to the government.
However, especially with the Christmas holiday, it will take months for the CRA to do anything about this. In the mean time she will have months of rent and bills to pay, food to buy, etc.
We have some money: not much, but enough to live on for a few months. If we could get the CRA to stop taking the money out of her account, this would allow us to stabilise the situation. This is, at present, our top priority.
We would very much value any general advice, but we also have some specific questions:
1. If we begin to pay her bills and/or receive money from her insurance cheques, will the government decide that our accounts are linked to hers, and will this have consequences?
1a. What about if we gave her access to our bank accounts directly?
2. What would be the broader legal consequences of us giving her money for short term support until the tax thing is sorted out?
3. What is the quickest way to get the CRA to stop taking money out of her accounts? (on the theory that then we can just give her the money she needs)
4. Is there some emergency support organisation that we can turn to in order to get advice and/or help?
5. Are we missing something obvious?