Buying pickup led to taxing nightmare
CRA reassessments leave Arnprior-area man feeling frustrated and demoralized
The taxman cometh, cometh again, cometh with briefcases and lawyers, emails and reassessments, reviews and appeals — cometh with all the time in the world.
And James Parsons just can’t take it anymore.
“It’s crazy,” he said Thursday, seated behind a mound of paper at his home on the shores of the Ottawa River near Arnprior.
Parsons, 55, is in the process of wrapping up his one-man business, Lawn/Tree Landscape Maintenance Ltd., after an exhausting battle with the Canada Revenue Agency that began over the simplest thing: the registration of a new pickup truck.
It is a long and maze-filled tale, but the purchase of a white Chevy three-quarter ton in August 2013 appears to have lit a fire that smouldered for a couple of years, finally breaking ablaze to help bury his life’s work.
“It’s five years later and it’s still not settled. It’s absurd.”
The father of three bought the truck from Reid Bros. in Arnprior for about $43,000, paying cash, to eventually replace a 2003 truck that was the workhorse of his business, which is largely residential landscaping. The truck was registered in his name, just as the first one was — it mattered not to him, as he was the business and the business was him.
Both trucks have the firm’s logo on the doors.
Parsons said he’d been filing his annual GST/HST returns faithfully and, because he often grossed less than $50,000 — sometimes less than $30,000 — calculated that he was usually owed refunds once his permissible deductions were made.
In 2013, as the rules permit, he deducted the HST charged on the truck (about $4,800) from the total tax he was required to remit.
This meant, in his calculations, he was entitled to an overall refund of $3,200. For two years, there was no refund — neither were there refunds from previous years he submitted.
“They’ve never given me a cent in refunds.”
In 2015 came a phone call — three in fact — from the CRA. The truck was registered to him, not the business, so they were disallowing the HST credit. He was shocked.
“There is insufficient information to prove the vehicle was purchased for the corporation,” reads a letter from a “Team Leader, Appeals Division,” at the CRA in October 2016. “The corporation’s internal records (Declaration of Trust, a website picture, a Schedule of the T2) alone cannot support the representation that the vehicle was purchased for the corporation.”
Huh? Then why was the 2003 vehicle treated differently?
But this was only the start. In the mail, there soon arrived notices of reassessments for 2012, 2013 and 2014. The figures jumped around like a yo-yo. The most alarming review said he owed $20,000.
Where did that figure come from? “No idea,” he says. “And I had no idea I should have been objecting to all these reassessments.”
So he fought the tax machine, best he could. Parsons first went to the Tax Court of Canada in April 2017, representing himself. This didn’t work very well as even the judge, David Graham, struggled to focus on the central issue: was it the truck or the $20,000? Parsons lost.
Then came an appeal to the Federal Court of Canada, launched in September 2017. This, too, became a rule-filled saga in which Parsons, essentially, is being hip-checked to the sidelines because he isn’t a lawyer and can’t afford to hire one.
So here we are in March 2018, almost five years after he bought the truck, the tax issue still not settled. It is 30 years after he started his business and the banning of most pesticide use — it was an essential part of his work — means his operation is crippled.
“It’s the only thing I’ve ever done.”
So, surely, this has been a stressful episode?
And Parsons waves his arms and walks out of the room. Then it’s just me and Max, the spaniel, who has click-clacked across the tile, in the quiet kitchen with a view of the snowy river.
And Parsons comes back a few moments later with a tissue balled up in his fist. “Can’t you tell?”
So Parsons is at the point where he’s wrapping up the corporation and looking for other sources of income. He’s fed up with a baffling system, including phone calls and letters from Prince Edward Island, Winnipeg, Ottawa and Toronto — as though he were fighting an army on many fronts.
If only to add irony to misery, Parsons pulls out a fresh letter from the CRA in which they appear to agree that, since he often doesn’t gross $30,000 anymore, he can become a “small supplier” and not collect GST from customers, nor remit it to government.
“It really just doesn’t matter. I’m so demoralized now, I don’t want to be in business.”