Market Insider By CBC Radio 57 Views

Check your paperwork or you may wind up with an $8M tax bill like this barista

This spring is bringing a tax season more complicated than usual, with pandemic benefits and payments adding to the usual paperwork.

But for Alina Bukatova, it might never be as complicated as 2018, when all the money in her bank accounts was seized after the Canada Revenue Agency thought she owed more than $8 million in taxes. 

That's despite an income Bukatova described as about $17,000 from working at a coffee shop.

It was a situation the 17-year-old student in Victoria ignored at first, thinking it was an attempt to defraud her.

Bukatova had used a branch of a well-known national tax preparation chain to do her 2018 taxes. She trusted what went through and didn't see anything that appeared incorrect. So when her notice of assessment showed an income of more than $17 million dollars — and the associated $8 million in unpaid taxes — she assumed it was a fake, along with automated phone calls claiming she owed money to the Canada Revenue Agency.

"The numbers were just so ridiculous that everyone looked at that piece of paper and saw that $8 million there and was like, wow, these guys aren't even trying to pull off an elaborate scam," said Bukatova. A friend who is also a lawyer checked over the document and agreed with that assessment.

While Bukatova's seemingly outlandish tax bill was an error — and later corrected — it's a reminder to check details carefully on your tax return, especially for tax year 2020 which is more complicated for many.

Phone calls weren't a scam

Among the notifications Bukatova initially ignored were phone calls from an automated system saying it was calling from the Canada Revenue Agency about her taxes. 

At the time, Bukatova was a teenager and brushed off the calls as fake or fraudulent, until she tried to use her debit card a few months later in mid-2018.

"I wanted to get myself some lunch and then it just wouldn't go through," she said in an interview with CBC Radio's The Cost of Living.

"At that point, I actually checked my bank account and it was at negative $16," said Bukatova.

There had been less than $6000 in her account, so that still meant the Canada Revenue Agency was looking for, say, $8,329,413.06, according to documents provided to CBC Radio.

Time to find an accountant

Bukatova turned to accountant Phil Hogan for help, who documented her experience on his website.

"This was such an obvious error," he told The Cost of Living.

Neither Bukatova, her family members or Hogan knew where the error occurred in the original tax return. Even several years later, Bukatova remains unclear on what went wrong as she couldn't locate the error in the records she retained.

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The Canada Revenue Agency told The Cost of Living it could not comment on the specifics of this situation due to taxpayer confidentiality

Regardless, it was clear based on her notice of assessment that the CRA believed her income exceeded $17 million, rather than $17,000.