Tough Calls in Tough Times.

Lately I've been turning down far more work than I've been taking on. Here's why.

It starts with a phone call where someone introduces themselves, says they heard me speak to a parent support group somewhere in Canada. They live somewhere, many miles from me, but they'd like me to look at their taxes because I know about medical and disability. They haven't filed in a few years (usually this means 5-8 years) and they know they can claim the disability amount, but haven't applied for it yet. They don't believe anyone locally can help them. I have no idea if that's true or not.

Inevitably the conversation turns to what do I need to see in order to help them with their taxes. I advise that before we can start the work, they'll both need to meet with me for three hours to confide in me about what they and their spouse/family own, owe and where their money comes from and goes to, and that I won't take it on hearsay.

Further, I'll require proof. They'll have to provide me with transactions, as in all their bank account statements. Not only statements, but the details about their deposits, if the deposits are not self-evident and add up to the T-slips they will have to report their income from pensions, CPP, OAS, other investments, working income, etc. I want to see that the deposits equal their reported income. If not, I want to know why not. CRA audit will go through that same process, so I'm just going their first. I think that's a completely reasonable thing to require if I'm going to help them stay out of jail. Remember, if you don't file your taxes, you can go to jail and get fined.

Then there's those who have a self-employed past, and have either wound it up or it hums along at a few thousand a year. They'll need their historical records in order to bring forward any amounts that CRA does NOT track, like home office costs carried forward for years when there wasn't enough income to claim all of the costs.

Oh yes, they'll need the capital assets history for those assets in the CCA schedule for the last year the business was filed, and if that business ceased, those assets had to be sold back at fair market value and the appropriate entries made to account for the ceasing of the business.

Have I lost you yet? Probably.

Then there's the rental suite, and most families who are trying to make ends meet with a person with a disability will have had tenants. And there's the history of that tenancy, and the potential for a capital gain on that portion of the principal residence to consider. And the calculation of the cost basis adjusted for their home for that portion that's been rented, and for how many years, and what improvements were made on a capital basis, and were they written off when they shouldn't have been...

If there's been a partial change in use and then the rental isn't occupied any longer, there's been a deemed disposition, which may require tracking when the house is sold. Do they know a real estate appraiser they can call?

Whew.. I know they aren't going to come see me by this point unless they are incredibly determined. Either that, or they tuned out and have gone to their happy place while I've been rambling on and on.

Yes, I may as well work for CRA. But they wouldn't have me. I'm too old, too irritating and they are downsizing their staffing needs anyway. Sometimes even for my clients who really don't believe I'm telling them the real story. They think I make this stuff up to scare them. It can't possibly be true.

Then, if they are still convinced they need to see me, I'll tell them to start gathering their transactions and historical records, and that I have a workbook for a measly $3.95 that sells on my website they can use to help them organize everything I'm going to need, and oh if they have investments with a broker, I probably need to see their taxes back at least to 1994, if not 1988 and in some cases back to 1971.  Why 1971? That's when capital gains and losses started being tracked. If they have capital losses carried forward that they want to write off against capital gains prior to death...

the good news? You can write off those carry forward losses against other income on your date of death return, but the bad news? You won't be the one doing it, it will be your executor. Your executor is going to need to be able to prove those losses existed when they are claimed against gains or other income. CRA didn't care if you reported losses back then because they knew that they could ask you to document your loss when you tried to claim it against a gain at any time in the remainder of your life or after your demise.

Remember, I'm Canadian, and I do Canadian tax. I got a shock this summer. Someone that called me actually paid me for the $3.95 workbook from a US bank account (they claimed they own property in the US, which they never told me about, and there's tax consequences and filing requirements for that too...) They lied about their whereabouts (or maybe they went to the cottage just to get out of paying the $.20 cents for GST. I know that's totally grumpy, but I'm supposed to charge PST as well as GST on those booklets.

BTW, I plan to self-remit because my shopping cart isn't liking that only some things I sell require PST. So now, I'm not only on the hook for the PST, but for the GST. It's not a big amount, I know that, but you know that saying about how it's the principal of the thing?  It was the principle of the thing.

Can anyone tell me would they ever trust anything these people had to say to me from here on out?

Too weird, they actually called me expecting I'd see them and couldn't believe that I'd care if they didn't pay the tax.

Please don't call me to help you cheat and lie on your taxes and if you're buying something from me and you're Canadian, don't use your US PayPal and claim you live in the US. I'll know.

I'm really tired of paying more than my fair share because of those who don't pay theirs.

Sigh.