It amazes me that our government agency, CRA, that is supposed to be part of a government of the people, for the people, has become so outrageously evil and there is not a public outcry of rage. Why is it that our population is not waking up to the reality that bad things happen to good people and anyone could become the next victim of a government agency completely ruining their lives?

How does it make sense for CRA to take a situation where someone can not pay the taxes they owe and charge criminal interest rates that ensure one thing. That one thing is INSOLVENCY and it is happening to an ever increasing number of Canadians.

How is it that a self appointed credit agency that proclaims they are not a lender, charges such a rate of interest and yet will not give Canadians a reasonable rate of interest.

If there was any iota of compassion in the CRA, they would consider common sense and reason when a taxpayer cannot pay their taxes. Common sense would be if a taxpayer can not pay and cannot borrow the money, the taxpayer would apply for a payment plan based on what they can afford. Then there would be a reasonable rate of interest such as 1 percent more than a bank would charge a good customer.

Applying common sense would allow CRA to get paid and the taxpayer to avoid going bankrupt and as a result having the taxpayer base getting nothing. To force someone into bankruptcy with criminal rates of interest and collection tactics that are terrifying to the taxpayer in trouble.

CRA is out of control and as a result, marriages are breaking up, people develop stress related health problems,  and taxpayers are losing everything they own.

Since when is it that making a bad decision or through no fault of your own, should cost you a lifetime of work, or even your life? It is a sad shame for our country that in proven circumstances, CRA thinks they are above the law, common sense, reason,  compassion and fairness. What is even worse…. many Canadians feel good about what CRA is doing. They assume as CRA does that all small business are tax cheats and deserve whatever cruel and harsh treatment CRA dishes out.

We deal the results of this kind of goings on every day, as more and more taxpayers find out that they can obtain help. Check out www.taxauditsolutions.ca for more information on getting protection from CRA abuse.

[1] Click here.

 D Cayo of the Vancouver Sun hits the nail on the head.

CRA includes usury in its bag of abusive tricks

Two car loan companies I wrote about last month threaten interest rates of up to one per cent a day in agreements with poor schmucks who borrow from them, but both say they don’t actually try to collect that much.

By The Vancouver Sun November 5, 2008

Two car loan companies I wrote about last month threaten interest rates of up to one per cent a day in agreements with poor schmucks who borrow from them, but both say they don’t actually try to collect that much.

Indeed, one company admits the contract isn’t enforceable (although, as I have noted, the Criminal Code forbids not only collecting interest over 60 per cent a year, but also putting it in a contract).

So if even high-cost lending companies don’t have the gall to try to gouge customers this badly, guess who does? Who actually squeezes one per cent a day — more than six times the Criminal Code maximum — out of unfortunate debtors?

None other than Canada Revenue Agency. It is thumbing its nose at fairness and the law by nailing any employer who is late remitting tax money withheld from employee pay with interest so high the rest of us would land in jail if we tried to impose it on people who owe us.

The CRA isn’t usurious across-the-board, but it’s website states explicitly that for these late remittances the charge will be “3% if the amount is one to three days late, 5% if it is four or five days late, 7% if it is six or seven days late, and 10% if it is more than seven days late.”

CRA is also on thin ice with assessments for late income tax filers. If they owe money, late filers must pay five per cent initially, plus one per cent for each month until the return is filed. According to my math, this adds up to a usurious interest rate on filings that are one to 30 days late, although the rate falls below the legal maximum for filings that are more than a month late.

Most governments assess hefty levies — and so they should — for chicanery or playing deliberate games with the taxman. But these usurious rates aren’t aimed at law-breakers or game-players – just people who pay late.

Indeed, the reader who told me about the issue was hit with one-per-cent-a-day interest when, unbeknownst to him, CRA changed the due date for his remittances. In a normal business relationship, this would result in a quiet word, not punishment.

And if CRA wants these usurious rates to punish, then they aren’t just ethically appalling, they’re also dumb. It works out to three per cent a day for people who are just one day late, and just one per cent a day for people who are three days late. And it’s capped at 10 per cent — as I read CRA’s information, if you’re 100 days late it costs only 10 per cent, or 0.1 per cent a day. So the incentive to pay promptly diminishes the longer you’re late.

This latest example of the kind of taxpayer abuse I’ve been writing about for more than a year is right up there with the preposterous assumptions, the arbitrary demands, the habit of penalizing taxpayers for CRA’s own mistakes, and more.

It reflects the uncaring mindset that produced a 10-per-cent fine — now rescinded since it drew scornful media attention — for paying bills at a CRA office rather than at a bank. The attitude seems to be that if people inconvenience the bureaucracy, no matter how innocently or trivially, they’ll be hit with a bazooka.

But the point is that parliamentarians who enacted the Criminal Code thought charging such high rates is an act so vile that people who do it belong in jail. And now a branch of government is defying the spirit, if not the letter, of that law.

As they say in Parliament, too often with cause: Shame, shame!

dcayo@vancouversun.com

Visit my blogs, one on taxation and one on globablization, at www.vancouversun.com/blogs