Cross-border nurses say they paid their taxes — but CRA took their money and froze their accounts | 24CA News
The day after depositing $1,400 in her checking account, Lora Christensen’s debit card was abruptly declined for a scarcity of funds.
After calling her financial institution, Christensen came upon that Canada Revenue Agency (CRA) had positioned a maintain on her account on the finish of November and brought cash out.
“They took almost $1,600 away from me,” she stated.
“Currently, my bank account is -$250.”
Christensen is a registered nurse who lives in Windsor, Ont., and works for a youngsters’s hospital in Detroit. Because of this, she has to file taxes in each Canada and the U.S.
According to Christensen, CRA stated she owed $32,713.62 in again taxes, which Christensen doesn’t imagine she owes. She stated the company has positioned a lien on her account for about the identical quantity, although Christensen says she submitted proof that she paid her taxes.
For a single mother like Christensen, she stated the dearth of funds has made issues hectic.
“My daughter has occasionally asked me, ‘Did you get your money back?,'” she stated. “I don’t know if she’s as stressed as I am.”
They took virtually $1,600 away from me. Currently, my checking account is -$250.– Lora Christensen, cross-border employee
In addition to travelling to a special nation for work, cross-border employees additionally need to navigate two completely different programs of taxation, and Christensen shouldn’t be the one cross-border employee dealing with frustrations with the CRA.
Fellow nurse Isabelle Tardif posted an identical story to Christensen’s, with many others commenting, in a non-public Facebook group referred to as “Proud to be a Canadian Nurse in Michigan.”
CRA claims that Tardif owes $59,000 in again taxes, she instructed 24CA News. She says CRA took $12,000 US, which was all of her financial savings. In May, her accounts have been frozen as effectively.
Tardif says she additionally offered CRA proof of cost of her taxes. She submitted her U.S. recordsdata from 2018 to 2020, however stated the Internal Revenue Service (IRS) nonetheless has not processed her taxes for 2021.
Gail Chene, supervisor at Ferrara Income Tax in Windsor, says that the common tax return takes six to eight months for the IRS to course of. She additionally stated that this may very well be what’s contributing to the problems Christensen and Tardif are dealing with.
Although Tardif has since regained entry to her checking account, she has filed an objection.
“Now, I’m on a seven-month waiting list with the chief of appeals to try and get my money back,” she stated.
Tardif was in a position to safe a mortgage from a member of the family to assist pay her mortgage. The lack of funds in her checking account meant that she has needed to pay for the whole lot along with her bank card.
“I couldn’t pay my bills,” she stated. “They didn’t even leave me $10.
“They took the whole lot.”
Tax system for cross-border workers
Canadians who work in the U.S. are required to pay taxes in the U.S. before they pay taxes in Canada, explained Ian Murphy, tax partner with MCO Partners. They are required to pay separate federal, state, municipal, social security and medical taxes in the U.S.
“All [of that] mixed collectively, transformed into Canadian {dollars}, they get to say that as a overseas tax credit score in opposition to their Canadian taxes,” said Murphy. “In Canada, taxes are based mostly in your worldwide revenue if you happen to’re a Canadian resident. In the U.S., on this scenario, you’d solely be taxed in your earned revenue.”
The process relies on proof of taxes being filed in the U.S., which Tardif and Christensen say they provided to CRA.
24CA News initially reached out to CRA for comment on Dec. 12. As part of an emailed statement 24CA News on Dec. 15, CRA said it cannot discuss individual cases, but people whose cases are selected for review by internal programs should contact CRA to work with them on the case.
“Individuals that obtain correspondence from the CRA ought to open it and take the actions requested in a well timed method,” the statement read. “Communication from CRA ought to by no means be ignored as actions could also be taken to resolve the scenario.”
The statement also said wait times might be longer as CRA is dealing with more objections about COVID-19 payouts.
Murphy said there are massive backlogs at CRA because the agency is under-staffed, under-trained and “broke.”
“They handed out some huge cash throughout COVID,” he said. “I feel they’ll exhaust a variety of their very own brokers. I perceive they should up the measures for amassing taxes, however I do not know if that is the place the place they’ll get a lot bang for his or her buck.”
Tardif said that she and other workers have reached out to local MPs about their struggles. 24CA News has contacted the offices of Irek Kusmierczyk and Brian Masse for comment.
Masse’s office said the MP has written to the federal Minister of National Revenue.
“I imagine that you must put a cease instantly to the freezing of Canadians’ financial institution accounts for money owed which aren’t professional,” Masse’s letter reads. “Your present course of not solely spends time and sources on Canadian law-abiding taxpayers, however additionally it is significantly harsh and merciless on folks making an attempt to comply with the legislation.”
Murphy said his advice is to sort things out with the CRA agent assigned to the case and that they are usually sympathetic.
“When I speak to collections brokers on the cellphone, I say to them, ‘We uploaded the whole lot months in the past. Your personal system is behind,'” he said. “If you inform them it is a overseas tax credit score, most of them will say, ‘I’ll name you again in three to 6 months.’
“And they drop it immediately.”
