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December 5, 2014

Canada Revenue Agency goes after ailing B.C. senior for $12K

Arne Sorbo, who has dementia, was penalized for forgetting to declare a small foreign pension
CBC News Posted: Dec 04, 2014 11:01 PM PT Last Updated: Dec 05, 2014 6:14 AM PT

Ailing senior saddled with $12K in tax penalties 2:19

The Canada Revenue Agency is demanding thousands of dollars from a B.C. senior with dementia and Parkinson's disease, after he failed to declare a foreign pension on his tax return.

Arne Sorbo, 88, forgot to declare the small Norwegian pension he receives on his 2011 tax return. The CRA discovered the mistake following a reassessment, and slapped him with a fine.

Now the retired certified general accountant (CGA), who for decades prided himself on getting the numbers just right, says he feels "rotten."

"I used to do income tax for seniors at no charge and I don't think they meant to lie. I think they're honestly trying to give a correct answer to questions, and I think the same thing applies here," said Sorbo.

"I thought my return was correct. That's what I thought. I don't know where I went wrong, or what happened."

Sorbo's tax troubles do not end there. The CRA took another look at his 2013 tax return, and deemed he could not claim a spousal deduction for his wife because she is under 65.

In fact, his wife is 79 years old and also has dementia.

"That's unbelievable that the tax department should be that far out," said Sorbo, who now faces almost $12,000 in tax, penalties and interest.

Taking the taxman to task

Sorbo's son, Michael, himself a CGA, stepped in to help his father sort out the tax nightmare. However, even he says he can't get answers from the CRA.

Michael Sorbo is trying to help his elderly father out of a tax nightmare
Michael Sorbo, a certified general accountant, is trying to help his elderly father out of a $12,000 tax tangle with the Canada Revenue Agency. (CBC)

"I keep having to open the file, write a new letter, and then get a new assessment. That's really frustrating going back to my dad and saying, 'I haven't been able to resolve this,'" he said.

Sorbo has sent the CRA a copy of his mother's passport to prove she is, indeed, over 65.

He has also asked the agency to invoke its own "fairness provision," which allows penalties to be waived for certain individuals like the elderly and the ill.

So far, Sorbo says the response from the CRA has been robotic and insensitive, and that it's nearly impossible to get the same agent on the phone twice.

The CRA has told him it will take up to 15 months to get a final decision on his father's case.

"When would it take 15 months to look at a simple fairness provision on a simple issue? Why should it take that long?" said Sorbo.

Meantime, the interest on the $12,000 penalty is growing.

"It drags on and on, and I don't know if they want you to pay the balance, so they sort of wear you down."

CBC News contacted the CRA to discuss the Sorbos' case, but the agency declined to comment due to confidentiality issues.