B.C. man fights $140,000 tax nightmare with CRA after wife’s death

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A BC man is sharing his tax filing nightmare after the Canada Revenue Agency claimed he owed more than $139,000 in taxes.

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“That terrified me. I mean it’s the government. What’s the next step?” Brian Kirkham told Consumer Matters.

Kirkham’s wife passed away in 2016.

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Her RRSP was transferred to Kirkham’s RRSP as spouse and beneficiary. The transfer of funds takes place in a neutral tax situation where no tax is due, but Kirkham says the CRA insisted that income tax owed on those transferred funds were approximately $240,000.

“They (CRA) assessed my tax on that total amount as if I received it in my bank account and pocket money for expenses. At the same time, they fined me for exceeding the limit of RRSP contribution,” said the Surrey resident.

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The retired banker says the CRA claimed he owed more than $139,000 in taxes. “I was shocked. I was in finance for 38 years. I dealt with it all the time. It is a regular transaction,” Kirkham said.

For years, Kirkham says that his accountants reached out to the CRA to try to settle his case, but with no success. “We didn’t count. Even calling and trying to talk to someone there is a huge bureaucracy. You run away and nobody is paying attention and nobody cares. I felt like, Kirkham said.

At one point, Kirkham says he was contacted by the CRA collections department.

“My wife passed away about five years ago and I am still dealing with this stuff and it should not happen. It is a routine thing,” he said. “Their (CRA) indifference towards my situation has made my Has aggravated the grieving process and made it very difficult to move on.”

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Consumer Affairs approached the CRA on Kirkham’s behalf. A week and a half later, he got a call from the CRA saying that the issue had been resolved.

“I had no idea how I would get out of this and again thank you to your team and myself, I cannot say enough to thank you. It is a blessing,” Kirkham said.

For confidentiality reasons, the CRA says it could not discuss Kirkham’s case, citing confidentiality provisions of the Income Tax Act. Kirkham says he was not even given an explanation.

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