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

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  #1  
Old 04-09-2020, 10:32 PM
Newfie76 Newfie76 is offline
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Default CRA recalculated tax refund

Hello all:

It’s been a while since I’ve last posted. Have a question as CRA has not been answering my calls....daily calls (2 plus hour hold times) and my lawyer has shut down....

I currently pay Child support (min wage full time imputed to ex) and Spousal support (total support is more than 50% my gross); we have 50/50. Legalized slavery in Canada is great for the economy! But not so much for the best interest of the child (human shield tactics)...

With that said.....

My ex left the country last year for 3 weeks. 3 weeks turned into 9 months. During this time I had full time with the kids. I continued to pay my slavery fee (spousal support) however, I discontinued Child support. Her and her lawyer did not argue this. Our original agreement states 2 payments a month for Child support.

Come tax time... I claimed my Slavery payment (spousal support never missed a payment ever) and indicated the Child Support I had paid during 2019 ( approx 3 months). Other than the 9 months... I’ve never missed a payment.

CRA readjusted my income tax refund to offset the “lack of Child Support” I had paid. Keep in mind I did send a lawyer letter in 2019 indicating that my ex was no longer in country and I had the kids full time. CRA has ignored this letter. My ex returned in late 2019 and we are back to 50/50.

My questions (if anyone can answer) How can I explain to CRA that I am NOT a deadbeat father and that I had the children full time during 2019 for 9 months? Or does CRA really ignore this part? Would this require my lawyers input? Does this require my ex to come forth willingly to CRA (good luck with that; deadbeat mothers outnumber deadbeat dads by 4 to 1 and the industry supports this)....

I’ve thought about letting it go to avoid further drama (yes I’m a god and my ex is a deadbeat)... but will CRA continue to punish me ( for being a slave trying to better the life of his kids) next year if they don’t see me paying the “missing child support”?

Thanks

Any input is appreciated....
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  #2  
Old 04-10-2020, 08:10 AM
Abba435 Abba435 is offline
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I think you need signed Minutes of Settlement backdated to reflect the revised terms of support. Register with the court, Submit to CRA with a letter of explanation. Follow up by phone after a few weeks.

CRA only refers to the actual documentation in force.
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Old 04-10-2020, 09:25 AM
rockscan rockscan is offline
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You don’t claim child support on your taxes. Only spousal support can be claimed. That’s why they are rejecting it.

If they have recalculated based on spousal only then they are right.
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Old 04-10-2020, 10:20 AM
Abba435 Abba435 is offline
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You both submit total support and the deductible amount for spousal on your T1. If your Minutes of Settlement vary from the Child Support Tables then they use that number. You can only vary table Child Support on consent or by court order. If you don't have that they calculate what you should pay for CS based on the tables for the current tax year and allow only the excess as deductible spousal support. You have to show them very clearly. this is important when you have an agreement where the prior year is used after July 1st of the next year for example.
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Old 04-10-2020, 10:23 AM
shellshocked22 shellshocked22 is offline
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I'm not an accountant but based on my experience.....


On your tax return you would have indicated the amount of spousal support AND child support paid. As noted earlier in this thread, only the spousal support is a deduction. HOWEVER, CRA considers that of the ss and cs paid, that CS is basically paid FIRST. Once the CS obligation (based on their documents you submitted earlier) has been satisfied, THEN they allow you to deduct the remainder of SS.


So, my guess is, assuming you pay $1000 in ss and $1000 in cs. So you paid $12,000 is ss but only $2000 in cs. So of the $14k you paid, CRA is assuming the $12k in CS was fully paid which only leaves $2k in SS for you to deduct.


NOW, I realize you were only suppose to pay $2k in CS and you sent CRA a letter. However, in my experience, any kind of a "change" throws off CRA and the odds are good that they won't properly (if at all) take it into account.


Bottom line, CRA didn't acknowledge the one time change in CS for the year in question. My advice.....


-after the COVID mess (since I hear its impossible to get through to CRA) see if you can talk to someone about it and even resend the documents showing the lower CS payment.


-failing that, perhaps consider using an accountant to get it appealed.




Bottom line, CRA didn't take into account the documents showing lower CS payments. In my experience, anything out of the ordinary stands a high chance of not being properly processed by CRA and you need to chase them to correct it.
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Old 04-10-2020, 11:59 AM
Abba435 Abba435 is offline
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Hire an experienced CPA
Experienced in dealing with support and CRAP
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Old 04-10-2020, 09:41 PM
rollingesto rollingesto is offline
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OK I am a CPA and based on what I have read above, the others who suggested this is about what CRA thinks was supposed to be paid are probably correct.
If you have documents supporting the change in support you need to get those submitted along with form T1158. Details can be found on the CRA website along with where to send it. Eventually you can have your return reassessed to allow the deduction. They may or may not do it without being asked, generally I find CRA sections don’t communicate with each other when we’d like them to....
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Old 04-11-2020, 06:43 AM
Abba435 Abba435 is offline
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I am also a CPA CA (not a tax guy) but personally have been successful by providing minutes of settlement and stick handling with the different CRA sections. It takes patience. Write a very concise letter that explains what you are seeking simply and clearly and submit with the agreement or minutes. The letter should reference the paragraphs so it is efficient for CRA rather than reading the entire agreement. This also worked for me with FRO for section 7 claims that were in breach of the separation agreement. Don't expect someone at a computer to know your particulars as well as you do. Keep it very straightforward. Good luck.
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