I don’t want or need to use an accountant but I have to because of my divorce. He is a nice accountant who keeps everything fair when crediting my children’s tuition tax credits between the children, myself and the children’s father.
The accountant has been a big help to me over the years because he will answer any type of tax question I have at any time during the year at no extra charge. He was a giant help when I was audited and did not charge me for any of that either. It all ended badly for me but it wasn’t my accountant’s fault.
When I first separated I was still living in the matrimonial home with the children while the children’s father lived somewhere else. When it came time to do my taxes I informed the accountant of this and he said that I could deduct one of the children as an extra deduction called equivalent to marriage. It meant a larger tax return for me and a larger monthly child tax credit cheque from the government as well.
I lived in the matrimonial home with the children for a time before it was sold and the children and myself moved in to our current home. Then the audit happened.
My accountant informed me that it was common for the Canada Revenue Agency (CRA) to audit recently separated couples. Some couples lie about being separated to get larger tax returns and it was all routine. I was separated all right and had the lawyer’s bills to prove it.
The problem is lawyers bills and communications between the lawyers representing the battling sides was not what CRA wanted. Lots of couples are apparently legally separated and still living together. The CRA wanted proof of everyone’s addresses in the form of utility bills or licenses or a notarized letter from the soon-to-be-ex-husband and his lawyer stating where the soon-to-be-ex was living.
My lawyer sent all my bills and communications to my house. His lawyer sent all his bills and communications to the place he was living. His lawyer sent one letter to my house. It said that because the CRA audit was only involved my tax return the soon-to-be-ex had no legal obligation to participate and he would not be participating.
I was able to provide lots of proof of where the children and myself lived at any time. Utility bills, report cards for the children, letters from my lawyer outlining the dates of the separation and the various communications between his lawyer and my lawyer as we attempted to hammer out a separation agreement were all forwarded to CRA.
Pleading phone calls to the CRA staff in charge of my audit and letters and documents were sent over a time period of several months. They were always professional yet kind and sympathetic but as the correspondence in all forms continued it became obvious that without the declaration from soon-to-be-ex and his lawyer the audit would not go in my favour.
I offered to pay for his lawyer to write the letter. Our mutual accountant called him and explained that it was pretty standard stuff and that all he had to do was write a letter and that writing a letter would be a pretty decent thing to do.
Again came the response from his lawyer that because the audit was about my taxes he was not legally obligated to participate.
The accountants wife called him a nasty name and I cried and wrote a cheque on my HELOC (home equity line of credit) for about $2,000.
Because my tax return was recalculated the amount that I had received in monthly child tax credit cheques was recalculated and those cheques were withheld for me until the amount of the over payment was recouped by the government.
I never discuss the ex with my children. That is not good parenting. My sons hardly ever read these posts and I have cautioned them not to read this one. I have always taken the high road and not talked badly of him even though both boys are men now and in their 20s. After all he didn’t do anything wrong and he was under no legal obligation to participate in my audit.
I am taking my pile of tax return stuff to the accountant tomorrow and I still get angry when I think about the unfairness of the audit. The accountants wife will probably call the ex a bad name. She does every year.