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

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  #11  
Old 01-30-2014, 12:32 PM
FightingForFamily FightingForFamily is offline
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The specific numbers are more critical for FRO than for CRA... but since both are a consideration why not eh.

The #1 most important thing for CRA is to make it clear that BOTH parties are paying support to each other.

I sign an "amending child support agreement" each year with my ex that includes the new numbers so everything is very explicit. It's just a single page. For third parties organizations a specific child support amount is sometimes relevant and its a lot easier to have it written up in a single page signed agreement than it is trying to dig up old tax returns, go look up table amounts, etc.

Also keep in mind the CSG tables do change from time to time (last in 2011 I believe) so even saying "table amount" is not set in stone forever.
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  #12  
Old 02-17-2014, 01:31 PM
seekinghelp seekinghelp is offline
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Update on my situation

@Links17 - I was not trying to find a loophole, I was just following the CRA guidelines for eligible dependants with shared custody as stated in the link I provided. My situation right from the get go matches exactly Example 2 on the CRA website. It is simply related to clarification around how we calculate child support in my original separation agreement.

@Mess Our agreement was never a result of a court ruling or a judges decision. It was an amicable agreement between me and my ex spouse. We paid a lawyer to draft the agreement for us. I have shared custody (50/50) with my ex and we always intended for each of us to claim one of our 2 kids.

@FB_ - I am very glad this post has helped you with your agreement... that was the original intent of this posting.

@others who posted Thank you very much for your suggestions. I am fortunate from the perspective that both me and my ex try to keep the peace for the sake of the kids. We always made this a priority from the start. I have since written an amendment to our agreement that we both signed, stating exactly how we calculate our child support, using some of the examples provided in this post (see below). I decided to make it retroactive to Dec 31, 2011 as that is when the new child support table amounts came in for Ontario and it covers the period in question. This was done after my appeal to CRA was denied, so the next step is court.

Now I am preparing to take my case to the Tax Court of Canada. I was wondering if members of this forum had experience and/or advice for dealing with this court system... or if someone could recommend a good tax lawyer who could help me with this next step.

Here is the original wording: (Im person1)
Quote:
4.2 For the purposes of determining table support for child1 and child2, person2s annual income in 2010 was $XXXXX.00 and person1s annual income in 2010 was $XXXXX.00.
4.3 Starting on the first day of the month following the closing date of the sale of the matrimonial home and on the first day of each subsequent month, person1 will pay to person2 as child support for child1 and child2:
(a) an agreed upon amount of $XXX.00 per month but said amount to be promptly re-examined and renegotiated annually based upon changes in person1s and person2 's income, and
(b) his proportionate share of the special or extraordinary expenses set out in this Agreement until a terminating event or a change in child1's and child2's needs occurs.
My signed amendment to the original agreement:

Quote:
4.3 Starting on the first day of the month following the changes made to the Federal Child Support Tables, effective December 31, 2011 and on the first day of each subsequent month, both person1 and person2 will pay child support for child1 and child2:
(a) person2 shall provide $XXX.00 to person1 per month but said amount to be promptly re-examined and renegotiated annually based upon changes in person1s and person2s income,
(b) person1 shall provide $XXXX.00 to person2 per month but said amount to be promptly re-examined and renegotiated annually based upon changes in person1 and person2s income,
(c) As a result of the above, both person1 and person2 as agreed that person1 will provide person2 the offset amount of $XXX.00 per month but said amount to be promptly re-examined and renegotiated annually based upon changes in person1s and person2s income, and
(d) his proportionate share of the special or extraordinary expenses set out in this Agreement until a terminating event or a change in child1s and child2s needs occurs.
I tried to keep the wording similar. So do you think I have a case? Will it be a waste of money that I cant really afford, to do the next step with a lawyer? Any help would be appreciated.

Thanks
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  #13  
Old 02-17-2014, 03:02 PM
seekinghelp seekinghelp is offline
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Just to clarify a couple things in my last post. The original wording of the separation agreement was not excepted by CRA because it doesn't clearly state that we both pay. I actually agree with that aspect.

The issue I have is the fact that we arrived at the original agreed amount with the exact calculation as it is described in the amended text. The $XXX.00 is subsection (a) of the original text is the exact same amount in subsection (c) of the amended text. If it was originally worded like this amendment, the CRA appeals person I was dealing with said it won't have been an issue. He actually advised me to do the amendment like this as well, for future years.

So my frustration is around some simple wording that has caused so much stress and financial loss.

In your opinion/experience, will a judge look at the original agreement and understand the calculation and realize it was done like the amendment? or will he rule that it wasn't stated correctly, that he has to go with the original wording which doesn't clearly state that we both pay and rule against me? Is there any sense of appealing to this from a moral perspective?

Thanks again
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  #14  
Old 02-17-2014, 03:22 PM
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Rioe Rioe is offline
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From what I've seen, you want to refer to specific dates, and use specific amounts, and not make the CRA people have to use their brains.

Here is how I would personally rewrite your paragraphs.

Quote:
4.3 Starting on January 1, 2012 both person1 and person2 will pay child support for child1 and child2:
(a) Based on their line 150 income of $XXXXX from 2010, person2 shall provide $YYY.00 to person1 per month.
(b) Based on their line 150 income of $AAAAAA from 2010, person1 shall provide $BBBB.00 to person2 per month.
(c) For simplicity, only the difference in the two amounts will be exchanged. As a result, person1 will provide person2 the offset amount of $BBBB-YYY = CCC.00 per month.

(d) The amounts shall be recalculated annually following a prompt exchange of tax return information to determine the updated line 150 incomes. The new amount will commence June 1.
If your ex is cooperative, you could get her to sign a letter indicating that this is how it was done all along, and include a summary of past year's numbers with an explicit calculation for each year; the parts a, b, c above for each of the previous years. Then CRA may readjust your past tax returns without having to go to court.
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  #15  
Old 07-22-2014, 04:24 PM
seekinghelp seekinghelp is offline
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I actually WON my battle with CRA for 2012 and 2013, heres my update.

To summarize the above, CRA would not let me claim one of my two kids as an equivalent-to-spouse under a shared custody separation agreement. They said that my agreement only stated one parent paying child support even though I provided tons of evidence (signed by me and my ex) clearly stating that we both use our incomes when calculating child support payments and therefore we both have child support payments. There was even a statement in there saying that we would each claim a child for tax purposes. My evidence supported the CRA P102 guidelines (page 11) exactly. I even provided them an amendment to our separation agreement, worded similar to the suggestions above.

Ive come to realize that CRA agents are not working for you (the average tax payer) and will try to find excuses and delay processes at every corner in hopes that the tax payer will give up and accept their decision (maybe I was naive). Unfortunate for them I was willing to go the distance and challenge them at every corner.

Every CRA agent I spoke with ... their very first comment was... you pay child support, you cant claim the child... then I point them to page 11 of the P102 guideline... their eyes open slightly and they try to introduce another caveat ... like CRA does not recognize the offset amount as both parents paying... I highlight the fact that they are contradicting their own guidelines by saying that... sorry sir we cant do nothing at this level... you must appeal it... wow!! When I ask to speak with their supervisor... sorry sir we cant do that and they would only say the same thing... wow!!

So during one of these lovely conversations with an agent, actually took the morning off from work, I was so frustrated after the conversation, I decided to email the Minister of National Revenue (Mrs K-L Findlay) and I ccd the Taxpayers Ombudsman (Mr J-P Dube). Lets just say I wasnt expecting too much to happen from that email. This was in May 2014.

At this point I had already sent my appeal for the informal procedure with the Tax Court of Canada and was awaiting my court date. Fast forward to two weeks ago, I got a call from a CRA litigator regarding my appeal for 2012, she told me that they have accepted my appeal and will reverse their decision; she faxed the formal docs that I had to sign in order to drop the court case. I had asked her why they reversed their decision and got the normal, sorry but I cannot discuss that aspect. I didnt press it because I was extremely happy they finally realized their own mistakes. A week after I checked the CRA My Account and magically they reversed their decision for the 2013 taxation year and I would be refunded the extra amount for equivalent-to-spouse that they originally took away. Life was great ... I felt victorious after a long drawn out battle with CRA.

Then yesterday I got this interesting letter from the Minister of National Revenue, looked authentic, and signed by Mrs. Findlay herself. Cool !! It basically stated that she has forwarded my concerns over to the litigation office and that she made them aware of our correspondence.

Then my mind started to speculate. Was it the Minister that actually expedited this appeal to a resolution? Did she influence the process? Why would she influence the process?

Heres my thought. I think if this case got to court it could have been precedent setting, since no other court case has favoured the parent in my situation. If I was able to argue my case and win, it could have future ramifications to the system. The one that denies first, prolongs next and tells you to move on to the next step when they know they are wrong. Yeah they may have to properly award parents their entitled tax claim amount.

So Im not sure if this will help you, my message is ... dont give up... if you feel that you are justified to continue your appeal, do it. If you write your separation agreements correctly, you may get processed correctly or you may not. If its the latter prepare for a long drawn out battle where common sense is not in play.

Another idea is to actually exchange $$ from each parent, with a written receipt so they will no longer be able to argue if the offset (the difference) only means one parent paying child support verse both paying. Although Im sure theyll find another excuse to deny your claim. If you like more info, send me a private note and I can go into much more detail.

Thanks
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  #16  
Old 07-30-2014, 02:05 PM
now i see the moon now i see the moon is offline
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Very interesting and thank you for posting.
Please see my letter that I'm sending to the Minister of Finance and my MP. Do you have comments?
I'm loathe to start an appeals process. I"ve had enough of court!
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cra line 305, eligible dependant, separation agreement, shared custody


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