Thursday, April 23, 2009

Revenue Canada refuses to pay for million-dollar mistake

Revenue Canada refuses to pay for million-dollar mistake

Taxpayer led to believe Harper government would compensate him for losses

Last Updated: Thursday, April 23, 2009 | 12:38 PM PT

Records lost by auditor, businessman says

Leroux said his tax troubles began in 1996, when an auditor from the tax agency showed up to look at the books. The auditor took Leroux's business receipts and other records, he said, then misplaced those records at the CRA office.

"He told me someone had put them on the pile that was to be shredded," Leroux said.

Without receipts to show his business expenses, numerous CRA audits over several years concluded Leroux owed almost $900,000 in personal income tax, plus over $100,000 in GST, including interest and penalties.

Leroux had to sell his business, Irvin's RV Park and Campground, in Valemount, B.C.

Forced to sell all his assets

That touched off a chain of events, Leroux said, that forced the sale — at reduced prices — of his business, his home and other assets, valued at approximately $4 million.

"I lost my house, I lost my business, I lost my land, I lost my income, I lost my savings — I lost it all," Leroux said. "Why? Because [the CRA] wouldn't admit to their mistakes. They would sooner destroy me and try to bury me out there than admit they did wrong."

"I've said to him the whole way, I will fight with you," said Moore, his wife. "This is wrong. They can't take it away and not even apologize. They can't take it away and not be held accountable."

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After Leroux's tax bill was cancelled, his MP, 16-year veteran B.C. caucus chair Harris, stepped in and took his case to Ottawa.

Correspondence shows that in 2006, Harris had several discussions with then minister of national revenue Carol Skelton — a member of Prime Minister Stephen Harper's cabinet — urging her to arrange compensation for his constituent's losses.

At first, Skelton assured Harris that if Leroux filed a lawsuit against the government, an out-of-court settlement could be arranged, the documents suggest.

In a letter to the minister, Harris repeated what she had led him to believe: "I was told that 'CRA does not have a mechanism to proactively pay damages … however if Mr. Leroux launches a court challenge with a statement of claim, the department could … settle out of court.' "

In an email to Leroux, Harris wrote: "I am convinced that things are going as we were promised…. [The minister] wants the outcome of your case to be an example of how Revenue Canada must be held accountable for its abuses of Canadians."

'All hell is going to break loose': Conservative MP

Later in 2006, when there was no sign of a settlement in the works, Harris wrote this angry email to the minister's assistant:

"I am livid. This whole episode is the most inhumane treatment I have ever witnessed in my life. And I cannot believe that our own government would treat Canadians in this manner. Mr. Leroux is an honest, principled individual who had been driven to the brink many times by Revenue Canada. If Revenue Canada mount even the slightest objection to the statement of claim filing this week I ASSURE YOU AND THE MINISTER THAT ALL HELL IS GOING TO BREAK LOOSE. This is bulls--t!"

Conservative MP Dick Harris calls the Canada Revenue Agency's treatment of the B.C. couple 'inhumane.'

'No compensation will be paid': CRA

Internal CRA emails written by assistant commissioner Rod Quiney in August 2006, obtained by Leroux under the federal access to information law, summarize the agency's position in his case:

"I believe we have been very fair and have in all respects provided the appropriate respect for his position and appropriate redress [by cancelling the debt]," Quiney wrote.

"No compensation will be paid," he concluded.

Leroux is thoroughly disappointed in the Harper government he supported.

"The people we elected to look after this stuff and protect us, they're not there, because the bureaucrats who did all of this stuff are instructing the politicians on what to do."

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