CRA writes off $133-million tax bill from mystery account
The Canada Revenue Agency headquarters in Ottawa is pictured on November 4, 2011. (Sean Kilpatrick / The Canadian Press)
Published Tuesday, April 23, 2019 5:33PM EDT
The Canada Revenue Agency has written off $133 million from one taxpayer’s account, suggesting it believes the sum cannot realistically be recovered.
A CRA spokesperson confirmed to CTV News Tuesday that approximately $133 million owing under “other excise taxes and duties” was removed from the agency’s books between April and July 2018.
“Due to confidentiality provisions, the CRA cannot disclose specifics of a taxpayer’s file, this includes commenting further on the nature of a writeoff,” Etienne Biram said in a statement.
Excise taxes and duties are fees applied to certain items over and above GST. The federal gas tax is one example of an excise tax or duty. Others include additional fees on fuel-inefficient vehicles, insurance premiums, alcohol, cannabis and tobacco products.
They are typically built into the price charged to consumers and then remitted to the government. Jonathan Garbutt, a tax lawyer with Moodys Gartner in Calgary, suspects the company involved in the $133-million writeoff likely ran into financial difficulties and stopped paying the tax.
“What probably happened was that somebody was collecting it and then not remitting it, since they were running out of money,” Garbutt, who has no special knowledge of the file, told CTVNews.ca.
Writing off any amount – let alone $133 million – is not a step the CRA would take lightly. The agency only writes off outstanding amounts owed when it believes there is no way it will ever be able to collect on the debt.
“The CRA never gives up on anything, ever. If you owe money to the CRA and they have some way of collecting it, they will actually go to court … and get a writ against you and all your property,” Garbutt said.
“They’re relentless if they think there’s something there to collect – but if there’s nothing, then they’re better off pulling the plug.”
As Garbutt sees it, the $133 million owed likely did not all come from one unpaid tax bill. He suspects it added up over a long period of time – likely years – during which interest accumulated daily. Deeming the entire amount uncollectible suggests to Garbutt that the money is likely owed by a company that entered bankruptcy at some point.
“At the end of the day, they’re never going to see a penny, so what’s the point [of keeping it on the books]?” he said.
The writeoff does not mean that the entity owing the amount is off the hook – only that the CRA will cease its collection efforts, barring a future change to the financial fortunes of the person or company owing the money.
With files from Rachel Aiello