CRA holding back tax refunds from people it says received pandemic benefits by mistake

The 2023 tax season may be over, but some taxpayers are still being hit with unpleasant surprises.

The government has started holding back all or part of tax refunds for Canadians it says received Canada Emergency Response Benefit (CERB) payments for which they weren't eligible.

Ottawa's Jared Cornelius — who saw his entire refund taken this year — insists he was eligible for the one $2,000 payment he received when he was out of work during the first month of the pandemic.

"I felt like I just got robbed by my own government," he said.

In December, the auditor general reported that $4.6 billion in pandemic benefits went to ineligible recipients. By law, the federal government has 36 months from the time benefits are paid to confirm that a payment was proper.

While that $4.6 billion total includes other pandemic programs — such as the wage subsidy and the caregiver benefit —  the CRA has been sending notices to CERB recipients it believes have received funds in error.

As of mid-April, over one million such notices have been sent out, said the agency. While multiple notices can be sent to a single recipient, the CRA said roughly 775,000 people have repaid money so far — nearly $1.4 billion. CRA said it has recovered $237 million through offsets such as holding back tax refunds.

Gerry Campbell, director of operations for Liberty Tax in Toronto, said he's heard from a number of clients whose refunds were withheld. Campbell said the notices offer little information on which rules his clients violated.

"I found it confusing now trying to help clients sort out their mess," he said. "It's not easy trying to extract from the ... letters what it is they are really wanting to claw back."

When reached for comment, National Revenue Minister Diane Lebouthillier's office referred CBC News to the CRA.

The agency said those who believe they were eligible for the payments can ask for a review.

"Many factors can influence a taxpayer's debt. That is why we encourage Canadians to contact the CRA if they have any questions about their file," a CRA statement said.

Cornelius said he's called the agency a number of times and has been told that nothing can be done.

"I'd be better off walking and talking to a Canadian goose to try and explain my problem," Cornelius said. "They'll probably respond with the exact same thing. They'll hiss at me and honk because they don't care."