I’ve never been a fan of the term “taxman”.
Seldom, if ever, is it used as a simple reference to a real person. No, it is a loaded term that is invariably intended to bring to mind the stereotype of a misguided mandarin squeezing the economic life out of the ordinary Joe toiling to make a buck.
Oh, come on!
The foundations of our economy and society are not free, and tax is the necessary cost. I won’t come to the defense of any particular politician, but I will say that it is neither simple to conceive nor easy to implement an effective tax system.
And as to those front line tax collection people, they probably rank just behind fast food wait staff in terms of the unwarranted abuse they must personally endure.
Having said that …
I came across a real headshaker case recently.
The decision was handed down in December 2008, with the English translation just recently being available. In either language, it doesn’t do much to improve the image of the ‘taxman’ as being cavalier and callous.
Fortunately, the appeal court stepped in to make things right, but it should never have gotten that far.
A series of unfortunate events
Taxpayer CL was a nurse with two children. She handled the domestic side while her husband worked outside the home and managed all their finances.
A series of unfortunate events were visited upon the family beginning in 2002:
- CL’s husband died suddenly in 2002, followed in short order by the deaths of her mother and her father-in-law.
- The couple’s son fell into a serious depression with suicidal issues, and CL herself came under psychiatric care and medication.
- In 2003, the family basement flooded and became infested with rats, at roughly the same time as financial need forced CL to re-enter the workforce. She went through three job changes through to 2005.
- Meanwhile the accountant who had handled the couple’s tax returns fell ill during this time period and eventually died of cancer in 2005.
It was not until 2007 that CL was able to assemble the documentation to file her 2003 to 2006 tax returns and pay the $33,000 tax owing. She received an assessment totaling about $13,000 in penalties and interest on arrears, which she appealed to the local Tax Service Office. In support of her application for relief from the assessment, she cited the Canada Revenue Agency’s “Taxpayer Relief Provisions”.
For further context, by November 2007 CL was collecting employment insurance benefits, due to her psychological condition and inability to work outside the home.
How exceptional must exceptional be?
In January 2008, the Director of the Tax Services Office replied that CL:
“failed to act quickly to remedy the delay and failed to meet your tax obligations in the past. As well, there was no error or delay on our part, nor were there circumstances beyond your control that might have prevented you from doing your accounting on time and as required. The penalty for late filing and interest on arrears are therefore upheld.”
CL appealed this response to the federal court for judicial review
On further review
The judge affirmed that the Taxpayer Relief Provisions are not mandatory for CRA officials, but rather “were developed by the Department to guide it in the exercise of its discretion and enable it to manage the tax system more fairly, by allowing room for common sense to benefit taxpayers who have been victims of misfortune or circumstances beyond their control.”
One extract provides a non-exhaustive list of possible circumstances, such as
(a) natural or man-made disasters such as, flood or fire;
(b) civil disturbances or disruptions in services, such as a postal strike;
(c) a serious illness or accident; or;
(d) serious emotional or mental distress, such as death in the immediate family.
[Emphasis added by judge.]
After reviewing relevant case law, the judge stated that “if ever there was a situation that merited tax relief, it is the applicant’s in this case, in accordance with the very criteria formulated by the Department of National Revenue.”
CL’s appeal succeeded and the matter was directed back for resolution in accordance with the court’s findings.
Literary culture versus pop culture
By the way, despite that I played on Eugene O’Neill’s “The Iceman Cometh” for the present article title, I’m truly more of the Beatles bent with their straight-up “Taxman”.
Come to think of it, George Harrison wrote that latter piece as he entered the 95% tax bracket. Perhaps the taxman in the foregoing case was summoning back the spirits of Messrs Wilson and Heath, the politicians George decried in his song.
Whatever the motivation, this taxman may not be the exception that proves any particular rule, but the situation most certainly should be viewed as ad libbing well off the script or songsheet of good tax system management.