Debra Jenkins doesn’t dispute the facts: for two consecutive years, 2002 and 2003, she didn’t file her tax return on time. But her excuse seemed reasonable enough. She had a lump removed from her breast. Her mother died of cancer. Her brother-in-law died. Her father-in-law died. The father of her eldest daughter died. And her marriage fell apart.
In April 2005—after years of “emotional and mental stress”—the Manitoba woman wrote a letter to the Canada Revenue Agency (CRA), asking the feds to waive hundreds of dollars worth of late fees and interest. “I knew I was obligated to do my income-tax returns,” she wrote. “But I remember being unable to find and organize all the information.” Ottawa refused to give her a break. When she appealed, the answer was the same. “The substantial majority of the unfortunate events you have cited occurred prior to August 2002,” the agency wrote back. In other words, some mid-level bureaucrat concluded that she had plenty of time—almost eight months—to pull herself together and pay up.
Take heed. If you’re going to file late this year (the deadline is April 30), you’d better have a better excuse than Debra Jenkins. A case of the sniffles clearly won’t cut it. “The tax department does have a heart,” says CRA spokeswoman Colette Gentes-Hawn. “But it must be something that is beyond a person’s control.” Last fiscal year, 60,000 Canadians asked CRA to slash their late penalties and interest—citing everything from car accidents to natural disasters. The department approved slightly more than half those requests (31,000), for a combined forgiveness of $106 million.
“That’s not bad,” says John Waters, a chartered accountant and manager of tax planning at BMO Nesbitt Burns. “I’m sure there are a lot of people who just put in excuses as a pie in the sky or a shot in the dark because they have exhausted all other options.”
Jenkins is running out of options, too. Last month, as her arrears approached $4,000, she took her fight to the Federal Court of Canada. Again, the system ruled against her. “These returns could have been filed on time and amended at a later date, once the missing information was located,” said Justice Pierre Blais. Before adjourning, the judge also ordered Jenkins to cover the cost of the entire hearing—boosting her debt by another $800. M
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