Thursday, February 4, 2016

Revenue Canada can kill you by mistake

Alyanna Lapuz, 21 from Winnipeg on January 7th this year received a letter from the Canadian Revenue Agency(CRA) addressed to the "Estate of the Late Alyanna Lapuz".

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A document Lapuz showed the CBC indicates she died according to public records on September 15, 2015. We all know that according to the old saying nothing is certain but death and taxes. The original quote is from Benjamin Franklin but a similar sentiment occurs earlier by Daniel Defoe in 1726. However, there is obviously a different relationship that can occur between death and taxes. At least in the case of the Canadian Revenue Agency, the tax collector can kill you, and although you are actually still alive, you are dead as far as the CRA is concerned. The CRA may also inform other government agencies that you are dead as well so you could have welfare or unemployment insurance cut off, be unable to use your Social Insurance Number (SIN), or have scholarship payments cease.
You might think that cases such as that of Lapuz are rare. Far from it. Between 2007 and 2013 a total of 5,489 Canadians have been wrongly entered as dead in the CRA records. The situation was so common that the Taxpayer's Ombudsman actually issued a report on the problem and issued eight recommendations to help fix it. These included recommendations to make CRA forms for reporting deaths clearer and also following up on people who report deaths in order "to substantiate the date of death."
You might wonder how CRA could wrongfully declare a person dead so often. Sometimes the error arose in another agency, such as vital statistics offices which just passed on the incorrect information to the CRA, which in turn will pass it on to others. At other times, it is the taxpayer's themselves who put incorrect information on tax files. Sometimes, the fault lies within the CRA as incorrect information is entered there. At times employees sometimes use two screens at once with files of two different taxpayers and they enter the deceased code on the wrong file.
In the Lapuz case, the error was internal and involved two employees, according to a CRA Calgary manager who phoned her to apologize and tell her that everything was fixed. Lapuz said she was excited and felt good. She would now again get her student loan. However she noted that it took only a few seconds to kill her but over three weeks to revive her. For some reason, Lapuz's "death" appears to have happened just after she changed her GST refund from checks to direct deposit.
It took many calls and visits to the agency to get the error corrected. She became increasingly frustrated. She was slated to start a dental hygienist program in Toronto in April but her student loan application was not being processed because her Social Insurance number was not valid, since she was officially dead.
The CRA told CBC that the rate of "killings" has decreased since 2013. A CRA statement said: "When CRA becomes aware of an error, we do inform our partners. The CRA responds quickly to take corrective measures when an error is reported. In fact, the CRA aims to rectify the situation within 24 hours."Yet it took CRA over three weeks to have Lapuz' death reversed. Bob Campbell of the Union of Taxation Employees said some errors of this sort will inevitably happen but also points out that over the last four years over 6,000 jobs have been cut from the CRA leaving less people to do more work. The cuts in staffing means that there are fewer staff to do deal with issues such as that of Lapuz.
While being declared dead by the Canadian Revenue Agency is not as certain as death and taxes, it remains an unpleasant possibility. The agency claims to have accepted all eight recommendations of the Ombudsman's report but it could be that they lack the staff to implement them all.