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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #91 (permalink)  
Old 02-12-2015, 08:48 PM
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Lightbulb Are S.7 expenses child support?

I have 2 kids in a 50-50 shared custody situation. I am currently navigating the appeals process around the line 305 Eligible Dependant deduction. Fun times.

I wonder. Could the apportionment of S.7 expenses documented in a support agreement serve as proof that both parties pay child support?
It's split. It's for the child. It's documented. What am I missing?
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  #92 (permalink)  
Old 03-30-2015, 04:25 PM
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Update:

I appealed the decision and a person from the appeals board contacted me and said my contract clause needs to be changed. He said not to use anything referring to SET OFF, as that would make them imply, that I am the only one having to make payments for child support according to an order.

I re-hired my lawyer. The order was ammended to show that I pay her XXX amount, and she pays me XXX amount.
I was told by the agent to use the example on the website. So used the one he said I had to. : example 2 with Nicholas and Christine.

the order was ammended and the draft sent to CRA appeals agent. He said the order now looks fine and I can use it for future tax stuff and my appeal would be positive and no repayment of $4000.

BUT, his supervisor reviewed everything, and now says that in 2013, my marital status changed, and that because of that, i can only claim spousal support OR child dependant and NOT both. The spousal support claim was more beneficial which then resulted me still owing $4000.

I asked if this will be an issue in the future moving from a separated to divorced marital status, and he said no. only affects me one time.

I told him, i fulfilled the obligations of the letter sent of the audit to prove i can claim my child as a dependant, but they, CRA, now went to dig further. He just giggled.

Today, the agent called me and said his supervisor has now rejected my appeal, as the order contravenes section 118(5) of the income tax act!!!!!!! This would therefor not allow me to claim child dependant at all in the future. they are closing the file and now I have to send my stuff to the Income Tax Rulings Dept, and I must pay $4000 now.

I then looked up the act, and saw they did not read 118(5.1) is an exception. Then I saw section 3.75 of the S1-F3-C3: Support Payments document on the CRA website.

i called the agent and cited to the 2 sections above. He then said, well file your 2014 taxes claiming dependant and print off everything to show the CRA, if you get audited again. (He then said that 3.75 they interpret as only one child)......(i have 2 children) (i thought the support we pay each other, is for both children, and not for an individual child)

lots of double mindedness.

I then read the document listed before 2013-0502091E5 E - eligible dependant credit (search via google), and this explains it all well.

so, now he says i must talk to an accountant??? what the heck??

so cra says section 3.75 is interpreted as one child..... so does this mean, my support payments are for ONE of my TWO children, and the same goes for my ex-wife's payments?

thoughts?
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  #93 (permalink)  
Old 03-30-2015, 06:10 PM
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Have you gone all the way to appeals or is this just simply the first department that handles reassessments? Have you spoken directly with the supervisor? I know I personally got much further when I directly spoke with the supervisor.


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  #94 (permalink)  
Old 03-30-2015, 08:12 PM
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Quote:
Originally Posted by lebigmac View Post
I have 2 kids in a 50-50 shared custody situation. I am currently navigating the appeals process around the line 305 Eligible Dependant deduction. Fun times.

I wonder. Could the apportionment of S.7 expenses documented in a support agreement serve as proof that both parties pay child support?
It's split. It's for the child. It's documented. What am I missing?
S7 is for extraordinary expenses. You are reimbursing the other parent for specific costs they have incurred. It's not (technically) the same as child support (S3), which is for providing the child with the necessities of life and does not involve reimbursement for specific costs. I think you need an agreement or an order which says you and the ex pay each other child support per S3 of the FCSG, AND that you have both agreed how to share the credit, in order for CRA to accept your AED.
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  #95 (permalink)  
Old 03-30-2015, 08:25 PM
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@vocalfather

Yes, this is directly with the appeals agent assigned to my file. This guy was good to deal with, but claimed all the decisions to screw me over came from his supervisor. (I did not ask to speak to the supervisor).

I am glad others on this forum was able to be successful with just changing their order and are good....not sure why mine is being scrutinized so much.

Since my variation order is in draft form only right now, should I have the lawyer add a clause that says both parents will claim a child each for tax purposes?

appeals agent said i must speak to an accountant as well, not sure how this will help my cause.....

the support payments section on CRA website, shows examples of how to right the agreement. Agent said use the example. I did...... now they contradict THEIR OWN DOCUMENTS AND ADVICE and say it contradicts section 118(5) of income tax act. wth!?

I am very very frustrated.
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  #96 (permalink)  
Old 03-30-2015, 08:33 PM
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Mine was scrutinized a lot but the supervisor I got and spoke to was understanding and helped me fix it BUT warned me that at any point I could run into issues...


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  #97 (permalink)  
Old 03-31-2015, 12:22 AM
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I found this interpretation by a CRA official, which describes most scenarios we are facing in this group.

1. separated/divorced
2. 2 children.
3. 50/50 shared custody.
4. dad pays mom CS/mom pays dad child support (mention of set-off)

google, 2010-0368381E5.pdf, and the first hit will be the correct one. I read it, and it matched the circumstances above for me, and according to the interpretation, I will be eligible to claim line 305. I will save this document for evidentiary purposes, and of course my ammended agreement, and hope for the best.
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  #98 (permalink)  
Old 04-10-2015, 03:43 PM
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I really hope that it works like that. CRA seems to be clamping down to the point that if anybody pays a dime of child support in any capacity, they are not eligible.
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