Quebec group accuses CRA of “gross incompetence”

This story originally appeared on Conseiller.ca.

A Quebec advocacy group has discovered a CRA error that has allegedly cost taxpayers millions.

Le Centre québécois de formation en fiscalité (CQFF) has accused the CRA of “gross incompetence, mediocrity and deep contempt for the taxpayers.”

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According to the CQFF, CRA “illegally extracted” tens of millions of dollars from more than 25,000 former single parents as a result of a change in the Canada child tax benefit (CCTB). New rules, effective June 2011, eliminated the grace period granted to include a new spouse’s income in the calculation of family income for the CCTB.

These new rules should have applied to marital status changes that occurred after June 2011. Trouble is, CRA applied these rules to “CCTB payments made after June 2011 rather than marital status changes after June 2011,” says the CQFF.

The result: “CRA wrongly siphoned CCTB payments from persons whose marital status changed between January 1, 2011 and June 30, 2011.” CCTB further alleges some families have been deprived of thousands of dollars in benefits.

Speaking with a CRA official, Yves Chartrand asked him to find out if CQFF’s estimate of 25,000 prejudiced taxpayers was a reasonable figure. In response, he said, ‘”It’s more than that sir, much more than that…”

Read: How CRA finds unreported income

CQFF says CRA cannot remedy the situation because its computer system is unable to identify taxpayers affected by this error. CQFF adds it had warned of these problems, but received a cold response.

“Officials have laughed at our behaviour,” the group says.

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At press time, CRA had not offered a solution.

Conseiller.ca Staff

The staff of Conseiller.ca have been covering news for Quebec financial advisors since 2000.