Divorced father fights taxman for denying deduction

I went through this with Revenue Canada as well.. and lost. I wish him
luck.

H.


http://www.canada.com/ottawacitizen/...586-ab8a-48f9-
badf-da982db3b8b1

Don Butler, The Ottawa Citizen
Published: Wednesday, April 02, 2008

George Calogeracos didn't set out to become a crusader for fair tax
treatment for divorced fathers.

But after the Canada Revenue Agency disallowed his claim for a tax
deduction, the 52-year-old cook from North Gower has taken up the cause on
behalf of the growing number of men who share custody of their children
after a divorce. He takes his case to an Ottawa tax court today.

Mr. Calogeracos's story begins in 2006, when he and his wife divorced.
After a court battle that cost him $20,000 in legal fees, he won joint
custody of their two daughters, Sabrina, now 13, and Victoria, 11. "I
didn't want to be one of those dads who just see their kids once a week,"
he says.


Under the divorce settlement, the girls lived with him from Sunday
afternoon until Wednesday at 8 p.m. "I had them for exactly half the week."

When he filed his 2006 tax return, Mr. Calogeracos claimed the "equivalent
to spouse" deduction for one of his daughters. His ex-wife made the same
claim for the other daughter.

The credit allows people who are single, divorced, separated or widowed to
deduct about $7,500 from their taxable income for a dependent relative who
lives with them.

His ex-wife's claim was accepted. But the Canada Revenue Agency told Mr.
Calogeracos he wasn't eligible because he was paying $350 a month in child
support.

Mr. Calogeracos called the revenue agency to object. "I didn't think this
was fair," he says. But the person he spoke to explained that the rules
were clear: anyone paying child support was disqualified from claiming the
equivalent to spouse deduction.

The official told him his only recourse was to appeal to the Tax Court of
Canada. "At the end of it all," recalls Mr. Calogeracos, "he says, 'good
luck to you and all the other fathers in Canada.' So obviously a lot of
people are in the same boat as I am."

Another revenue official told him he couldn't claim the deduction if he
paid even a single dollar of child support in a given year. "That's what
really blew my mind," he says. "It rubbed me the wrong way."

Mr. Calogeracos, who now has full custody of his daughters and no longer
pays child support, was also miffed when the revenue agency informed him
that, for tax purposes, "the kids aren't even my kids."

In an e-mail to the Citizen yesterday, the Department of Finance noted that
those who pay child support generally have higher incomes than those who
receive it.

"In recognition that the lower-income person has a reduced ability to pay
personal income taxes, the Income Tax Act specifies that a parent who pays
child support in respect of a child cannot claim the eligible dependent
credit for that child."

The e-mail adds that parents sharing custody have the option of dividing
the tax relief provided by the exemption informally between themselves.

A letter to Mr. Calogeracos last November from Finance Minister Jim
Flaherty, to whom he had fired off a complaint, sheds further light on the
tax man's rationale for the rule.

"It is important to recognize," the letter reads, "that the income tax
system is general in its application, and cannot always be tailored to
individual circumstances."

With respect to the equivalent to spouse deduction, the letter continues,
"a general rule is in place because it is not appropriate or
administratively feasible for the tax system to intervene when parents
disagree" on who should make the claim.

"We never disagreed on that," Mr. Calogeracos notes. "We have two kids."

Mr. Flaherty's letter points out that support payments are determined in
the context of a tax system in which only recipients of child support can
claim the deduction.

If payers could claim it as well, "this might lead to changes to the child
support guidelines, resulting in payers of child support receiving little
or no net benefit," the letter adds.

To Mr. Calogeracos, disqualifying those who pay child support from
eligibility for the deduction is a clear case of gender discrimination.

It's mostly men who pay child support, he points out, because many still
earn more than their spouses. He plans to argue that amounts to a violation
of equality rights under the Charter of Rights.

But last Friday, he received a thick package of legal documents from
Sheherazade Ghorashy, a lawyer for the Canada Revenue Agency. She informed
him the agency will try to block any Charter arguments unless he has
complied with section 19.2 of the Tax Court of Canada Act.

Mr. Calogeracos looked up the section on the Internet. As best he could
tell -- "I'm a cook, not a lawyer," he says -- it requires him to give 10
days' notice to federal and provincial attorneys general if he wants to
make a Charter argument.

Mr. Calogeracos didn't do that, meaning he likely won't be allowed to argue
today that the current rules discriminate against men.

Ms. Ghorashy's package also cited a long list of past court rulings that
rejected earlier attempts by child support payers to claim the equivalent
to spouse deduction -- including one applicant who unsuccessfully invoked
the Charter of Rights.

All this has left him feeling "a little bit discouraged," he admits. "It's
their rules. If I have to fight them on their battlefield ... it's all cut
and dried, isn't it."

It doesn't help that he can't afford a lawyer. "I've been cooked by lawyers
the last couple of years," he says. "I'm drained."

Still, Mr. Calogeracos soldiers on. "If nobody says anything," he points
out, "nothing will ever be done."

He acknowledges that it's now more about principle than money. If the
government were to offer a private deal so he could claim the deduction, he
says he'd refuse. "That's not the right thing to do. Then I'd have to live
with myself, knowing that I caved in."

Even if he loses today, he believes time is on his side, "because there's
just too many fathers who are taking more charge. They want to stay close
with their kids.

"I really do believe that in the near future, this will be changed," he
says. "Because it's not a fair law."

--
[Any man that's good enough to support a child is good enough to have
custody of such child]

..
..
"Henry" wrote in message
news
I went through this with Revenue Canada as well.. and lost. I wish him
luck.

H.


http://www.canada.com/ottawacitizen/...586-ab8a-48f9-
badf-da982db3b8b1

Don Butler, The Ottawa Citizen
Published: Wednesday, April 02, 2008

George Calogeracos didn't set out to become a crusader for fair tax
treatment for divorced fathers.

But after the Canada Revenue Agency disallowed his claim for a tax
deduction, the 52-year-old cook from North Gower has taken up the cause on
behalf of the growing number of men who share custody of their children
after a divorce. He takes his case to an Ottawa tax court today.

Mr. Calogeracos's story begins in 2006, when he and his wife divorced.
After a court battle that cost him $20,000 in legal fees, he won joint
custody of their two daughters, Sabrina, now 13, and Victoria, 11. "I
didn't want to be one of those dads who just see their kids once a week,"
he says.


Under the divorce settlement, the girls lived with him from Sunday
afternoon until Wednesday at 8 p.m. "I had them for exactly half the
week."

When he filed his 2006 tax return, Mr. Calogeracos claimed the "equivalent
to spouse" deduction for one of his daughters. His ex-wife made the same
claim for the other daughter.

The credit allows people who are single, divorced, separated or widowed to
deduct about $7,500 from their taxable income for a dependent relative who
lives with them.

His ex-wife's claim was accepted. But the Canada Revenue Agency told Mr.
Calogeracos he wasn't eligible because he was paying $350 a month in child
support.

Mr. Calogeracos called the revenue agency to object. "I didn't think this
was fair," he says. But the person he spoke to explained that the rules
were clear: anyone paying child support was disqualified from claiming the
equivalent to spouse deduction.

The official told him his only recourse was to appeal to the Tax Court of
Canada. "At the end of it all," recalls Mr. Calogeracos, "he says, 'good
luck to you and all the other fathers in Canada.' So obviously a lot of
people are in the same boat as I am."

Another revenue official told him he couldn't claim the deduction if he
paid even a single dollar of child support in a given year. "That's what
really blew my mind," he says. "It rubbed me the wrong way."

Mr. Calogeracos, who now has full custody of his daughters and no longer
pays child support, was also miffed when the revenue agency informed him
that, for tax purposes, "the kids aren't even my kids."

In an e-mail to the Citizen yesterday, the Department of Finance noted
that
those who pay child support generally have higher incomes than those who
receive it.

"In recognition that the lower-income person has a reduced ability to pay
personal income taxes, the Income Tax Act specifies that a parent who pays
child support in respect of a child cannot claim the eligible dependent
credit for that child."

The e-mail adds that parents sharing custody have the option of dividing
the tax relief provided by the exemption informally between themselves.

A letter to Mr. Calogeracos last November from Finance Minister Jim
Flaherty, to whom he had fired off a complaint, sheds further light on the
tax man's rationale for the rule.

"It is important to recognize," the letter reads, "that the income tax
system is general in its application, and cannot always be tailored to
individual circumstances."

With respect to the equivalent to spouse deduction, the letter continues,
"a general rule is in place because it is not appropriate or
administratively feasible for the tax system to intervene when parents
disagree" on who should make the claim.

"We never disagreed on that," Mr. Calogeracos notes. "We have two kids."

Mr. Flaherty's letter points out that support payments are determined in
the context of a tax system in which only recipients of child support can
claim the deduction.

If payers could claim it as well, "this might lead to changes to the child
support guidelines, resulting in payers of child support receiving little
or no net benefit," the letter adds.

To Mr. Calogeracos, disqualifying those who pay child support from
eligibility for the deduction is a clear case of gender discrimination.

It's mostly men who pay child support, he points out, because many still
earn more than their spouses. He plans to argue that amounts to a
violation
of equality rights under the Charter of Rights.

But last Friday, he received a thick package of legal documents from
Sheherazade Ghorashy, a lawyer for the Canada Revenue Agency. She informed
him the agency will try to block any Charter arguments unless he has
complied with section 19.2 of the Tax Court of Canada Act.

Mr. Calogeracos looked up the section on the Internet. As best he could
tell -- "I'm a cook, not a lawyer," he says -- it requires him to give 10
days' notice to federal and provincial attorneys general if he wants to
make a Charter argument.

Mr. Calogeracos didn't do that, meaning he likely won't be allowed to
argue
today that the current rules discriminate against men.

Ms. Ghorashy's package also cited a long list of past court rulings that
rejected earlier attempts by child support payers to claim the equivalent
to spouse deduction -- including one applicant who unsuccessfully invoked
the Charter of Rights.

All this has left him feeling "a little bit discouraged," he admits. "It's
their rules. If I have to fight them on their battlefield ... it's all cut
and dried, isn't it."

It doesn't help that he can't afford a lawyer. "I've been cooked by
lawyers
the last couple of years," he says. "I'm drained."

Still, Mr. Calogeracos soldiers on. "If nobody says anything," he points
out, "nothing will ever be done."

He acknowledges that it's now more about principle than money. If the
government were to offer a private deal so he could claim the deduction,
he
says he'd refuse. "That's not the right thing to do. Then I'd have to live
with myself, knowing that I caved in."

Even if he loses today, he believes time is on his side, "because there's
just too many fathers who are taking more charge. They want to stay close
with their kids.

"I really do believe that in the near future, this will be changed," he
says. "Because it's not a fair law."

"His ex-wife's claim was accepted. But the Canada Revenue Agency told Mr.
Calogeracos he wasn't eligible because he was paying $350 a month in child
support."

Last I checked, a child tax credit is solely for the purpose of providing
financial relief to those who are paying (money) to care for a child. But
they say he is not qualified for the credit because he IS paying "child
support". What am I missing here?

"Chris" wrote
"Henry" wrote
.......................................

"His ex-wife's claim was accepted. But the Canada Revenue Agency told Mr.
Calogeracos he wasn't eligible because he was paying $350 a month in child
support."

Last I checked, a child tax credit is solely for the purpose of providing
financial relief to those who are paying (money) to care for a child. But
they say he is not qualified for the credit because he IS paying "child
support". What am I missing here?
==
You never heard of the "Cuz Rule?"

"Chris" wrote in :

"His ex-wife's claim was accepted. But the Canada Revenue Agency told Mr.
Calogeracos he wasn't eligible because he was paying $350 a month in child
support."

Last I checked, a child tax credit is solely for the purpose of providing
financial relief to those who are paying (money) to care for a child. But
they say he is not qualified for the credit because he IS paying "child
support". What am I missing here?


Chris,

I used the same logic when I attempted to argue my point with CRA about the
credit a few years back. Since I pay for them when they are with me (I have
50-50 access) and I pay support, really, the children are dependent on
me... not the mother. They didn't buy that arguement.

Just look at the Fianance minister's reply: it is to give a tax break to
the lower income parent (mom) without any complicated rules. Yet that
assumption falls apart on so many levels, the mind simply boggles.

Basically, mom get tax break... lets invent a reason as to why.

H.

--
[Any man that's good enough to support a child is good enough to have
custody of such child]

..
..
"Henry" wrote in message
...
"Chris" wrote in :

"His ex-wife's claim was accepted. But the Canada Revenue Agency told Mr.
Calogeracos he wasn't eligible because he was paying $350 a month in child
support."

Last I checked, a child tax credit is solely for the purpose of providing
financial relief to those who are paying (money) to care for a child. But
they say he is not qualified for the credit because he IS paying "child
support". What am I missing here?


Chris,

I used the same logic when I attempted to argue my point with CRA about
the
credit a few years back. Since I pay for them when they are with me (I
have
50-50 access) and I pay support, really, the children are dependent on
me... not the mother. They didn't buy that arguement.

Just look at the Fianance minister's reply: it is to give a tax break to
the lower income parent (mom) without any complicated rules. Yet that
assumption falls apart on so many levels, the mind simply boggles.

Starting with the fact that you are more in need of such tax break than is
she simply because you are strapped with a HIGHER financial burden. Not to
mention, it is YOU rather than her who has paid MORE taxes to begin with.
The U.S. Treasury has just approved a tax rebate. It is a lump sum refund of
taxes. People who have not paid a dime in income tax will also be getting
the rebate. Now help me to understand how it is possible to get a rebate on
something that was never paid?


Basically, mom get tax break... lets invent a reason as to why.

H.

"Chris" wrote in

The U.S. Treasury has just approved a tax rebate. It is a lump sum refund
of
taxes. People who have not paid a dime in income tax will also be getting
the rebate. Now help me to understand how it is possible to get a rebate
on
something that was never paid?


Basically, mom get tax break... lets invent a reason as to why.

They're basically just trying to recreate another Christmas spending spree
at your expense!

Trouble is, with all the jobs lost recently, it will only supplement
people's income to pay the standard monthly bills!
The money will vaporize as quickly as $20 dollar bill at a gas station! LOL