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This week, the Canada Revenue Agency began sending out notices of rescheduling, advising certain Canadians who may have received COVID benefit payments they may not qualify for, which have been set up on their CRA accounts. This follows loan notifications that Employment and Social Development Canada began sending to various benefit recipients in November 2021, who received an advance payment of $2,000 of Canada Emergency Response Benefit (CERB) in 2020.
You may recall that as part of its response to the pandemic, the government used a verification-based process to provide income support to millions of Canadians, depending on individuals determining for themselves that Whether they were eligible for benefits based on the established norms. But, it turns out that not all who applied were ultimately eligible to receive benefits, either due to a conscientious misunderstanding of the rules, or, in some cases, applying only to CERB, or Canada instead. Despite the Recovery Benefit (CRB), not meeting the eligibility criteria, while expected by the Govt. never complied.
But now the government is really following. If you have received a letter but still believe you are eligible for these payments, you should contact the CRA and provide any additional information necessary to validate your claim. If you need to repay the benefits received, the CRA and ESDC state that their call agents will work with individuals on a case-by-case basis to find a solution to your situation, including creating flexible payment arrangements . No interest or penalty will be applicable on any repayment.
In the meantime, we see taxpayers going to federal court challenging the CRA’s decision to deny COVID-related benefits. These cases have met with mixed success. Last month, I shared the story of a Quebec taxi driver who went to court to challenge the CRA’s decision to deny the CRB. This follows a reported case a month ago of a tutor who allegedly earned $5,250 in income in cash, and was denied his claim to CERB. There was also a case earlier this year in which another taxpayer was challenging the decision of the CRA, which concluded that he was ineligible for CRB in 2020 because he had not earned an income of $5,000 in the previous year.
A newly reported case, just last month, involved a taxpayer challenging the CRA’s decision to deny Canada Recovery Caregiving Benefit (CRCB). The CRCB provided $500 per week taxable benefits for up to 44 weeks to anyone who had to leave work to care for a family member under certain circumstances due to COVID. It was available from September 27, 2020 and ended last week on May 7, 2022.
To qualify for CRCB, you must be a resident of Canada, present in Canada, and at least 15 years old with a valid SIN. You must have earned at least $5,000 (self-) employment income in 2019, 2020, 2021 or in the 12-month period preceding the date of application. In addition, you must have been unable to work for at least 50 percent of your normally scheduled work week because you had to take care of a family member for various reasons due to COVID-19. For example, you may have cared for your child under the age of 12, or another family member who required supervised care because regular care was unavailable for reasons related to COVID-19.
In 2020, Taxpayer applied for CRCB. He later applied for an additional term in 2020 and 2021. Following his application, the CRA accompanied him on several occasions requesting further information, particularly documents evidencing his revenue, his lack of work and his caregiving duties.
According to the CRA officer’s notes, the taxpayer refused to provide the requested documents and provided conflicting information during half a dozen phone calls. In one call, the taxpayer claimed to take care of his daughter, while in another he informed the officer that he did not in fact have the custody of his daughter. In another call, he claimed that he took care of his father due to the pre-Covid medical procedure and that his father stays with him for 24 hours, while in another call the taxpayer said that his father and mother live together. In another call, the taxpayer claimed that he has worked and earned the prescribed minimum income, while in another call he has admitted that he has not worked since 2017. The taxpayer later argued that $28,150 was paid to him in cash, but the cash was not deposited. His bank account, was neither declared in his tax return.
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In September 2021, the CRA denied his benefits. The taxpayer then requested a review of the CRA’s decision, which culminated with the CRA, once again, in an October 2021 letter that the taxpayer simply did not qualify.
In November 2021, the taxpayer applied to the Federal Court, asking for judicial review as to whether the CRA’s decision to reject the CRCB was “justified”. The Crown brought a motion to strike down the taxpayer’s application.
An application for judicial review must contain grounds for reasoning, which means all legal grounds and material facts necessary to support the relief sought. The Federal Court of Appeals has previously determined the practice and procedures for notice of application for judicial review, as well as to strike down any application that “an accurate statement of the relief sought to an applicant and an Arguments are to be made on the basis of the statements ‘complete’ and ‘concise’.” In fact, prior jurisprudence has determined that “merely stating, in a notice, that (of the CRA) the findings are false without explaining why or the details offered, with little, if anything, matters to.”
Noting that the taxpayer’s court application “makes no allegation as to how the CRA’s decision under review is unreasonable and does not contain any material facts relating to the decision,” the judge struck down the taxpayer’s application for judicial review. exercised his judicial discretion, which means the case will not be heard. He also provided costs to the Crown.
Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Managing Director of Tax and Estate Planning with CIBC Private Wealth in Toronto.