Parent owes money, disappeared, 2 months later back asking for tax receipt!

[samslittleones]

Title sums it up, I cared for this woman's children since 2015, she was always flaky, bad with paying on time, etc... Liked the kids enough so I kept her around - my mistake I know.

Fast forward to 1st week on jan 2018, I am scheduled to have all 3 of her kids for the winter break (pay for days booked in advance - ofcourse she never got the pay in advance part but for the most part got the pay for days booked) she cancels one day the morning of to which I say fine, but you gotta pay for the day anyway. Then next week back to normal just caring for the youngest one as the others are at school. She pays me a portion of the $$ for the holiday break week, does not pay for the other week which was just the little one and says she will pay in the next coming weeks when she gets paid from work... Next week she says she wont need me as husband is not working and that happens for a couple weeks then all of feb no word no sign NO PAYMENT EITHER and this goes on till last week. I had been texting her periodically to ask for payment to which she tried to dispute saying she didn't bring kids so she didn't owe me x amount, only y... didn't pay refused to pay... After not getting replies to texts anymore and never picking up the phone last week she texts: "hello, I am sorry, I haven't forgot about paying you, I will send the money by this weekend, by the way can I have a tax receipt?" I didn't respond because I'm honestly just fed up oh and she never paid either. Today again " Hello... Still hoping to get a tax receipt... Also still stands haven't forgotten about you. I will pay I'm super sorry alot has happened since Feb. I'll be emailing money this weekend."

I haven't replied because I fear I can't hold my tongue... I have asked for this money since beginning of Feb saying I NEEDED it! she didn't give two F^%$!!!

What would you do? I'm planning on doing my taxes this weekend... I had already counted her as a loss, she owes $180, not claiming her kids will save me a lot more than that on taxes!!! Is it illegal to not give a tax receipt? I could say that I will give the receipt once I receive payment but if she doesn't pay I have to keep waiting to do my taxes and I've waited long enough... I doubt she will pay and next week will be the same story. I am DONE with this woman!

Any advice would be appreciated, thank you!

[Suzie_Homemaker]

I haven't replied because I fear I can't hold my tongue... I have asked for this money since beginning of Feb saying I NEEDED it! she didn't give two F^%$!!!

What would you do?

I wanted to check with my son who is a lawyer before responding and he's confirmed that this is correct information.

First and foremost - You cannot deny giving her a receipt. The fact she owes you money for 2018 fees is totally separate from the fact she should be given a receipt for what she has handed over in 2017. You cannot use the receipt as a means to manipulate the owed fees.

Second - You have not made mention of having a written contract and so we are assuming there wasn't one. But even if there is, you have enable this on-going issue. While that seems like I'm judging you, I'm not. There's is actually a legal responsibility to cut your loses when someone doesn't follow your policy before it becomes an ongoing issue. The term for that is to "mitigate your loses". The first time they showed up without paying, you should have turned them away at the door. If your agreement was no fees=no care, whether that is written or just verbal, when you don't enforce your own policies, that blurs the lines as to what the understanding between you both is.

So that's the legal situation - you can't deny her a receipt for money spent and you will have a really hard time winning in Small Claims court for the fees she owes.


So you have to decide if you want to call her bluff. Bear in mind, that you don't have to declare the income from fees until it's earned. So her tax receipt for 2017 will include her fees paid until 31st December 2017. That means the fees that she owes you since January, she won't get a tax receipt for yet and you won't be including that income on this tax return anyway!

Do your taxes this weekend because this whole situation of money owed will be in the 2018 tax year and won't affect the tax return pending. You have to declare the income regardless.

In the meantime, you could just send her a text stating that you will be happy to issue a tax receipt once she settles her account and see what happens but know that in doing that, if she doesn't pay, you legally don't have a leg to stand on and in fact should have issued her 2017 tax receipt by the end of Feb. She should already have had this and you are in breach of CRA but not having given it almost a month late.

[Lee-Bee]

How dies she pay (when she pays)?

If cash I would respond. Your receipt is sitting here, when you bring payment you can collect it. I would also consider something along the lines of "when you disappeared without payment I no longer knew how to get your receipt to you so was waiting for you to be in touch about your owed fees so I could get it to you".

I would back date the receipt to when she dissapeared then i would hand write a note on the receipt. A note to you/CRA that you lost contact with her and did not know how to get the receipt to her. 'Unable to locate-lost all communication abruptly".

I doubt it would hold in court but it makes it appear it was their dissapearing that resulting in a late receipt. Not you purposely with holding it.

That said, you DO need you get it to them whether paid or not. BUT I don't know there is much they can do if you kind of attempt to hold it until paid.

If you do NOT have a signed contract you are likely best to just seek the money for days care was provided. Some money is better than no money.

[Suzie_Homemaker]

How dies she pay (when she pays)?

If cash I would respond. Your receipt is sitting here, when you bring payment you can collect it. I would also consider something along the lines of "when you disappeared without payment I no longer knew how to get your receipt to you so was waiting for you to be in touch about your owed fees so I could get it to you".

I would back date the receipt to when she dissapeared then i would hand write a note on the receipt. A note to you/CRA that you lost contact with her and did not know how to get the receipt to her. 'Unable to locate-lost all communication abruptly".

I doubt it would hold in court but it makes it appear it was their dissapearing that resulting in a late receipt. Not you purposely with holding it.

That said, you DO need you get it to them whether paid or not. BUT I don't know there is much they can do if you kind of attempt to hold it until paid.

If you do NOT have a signed contract you are likely best to just seek the money for days care was provided. Some money is better than no money.

I wouldn't do this. It's our responsibility to mail them out if someone isn't in our care any more to their last known address so having it sitting in your possession will show you didn't do that.

[samslittleones]

I will give receipt as she paid me online so there are ways to track that I have received payment from her even if I don't give receipt she call still claim she gave me money and have proof.

She gave me some crappy excuse why she hadn't replied to my texts and has fallen behind on payments. My loss, I'm going to give the receipt and put the nail on the coffin on this one NEVER dealing with this again.

Thank you, I appreciate the lawyer advice, needed to hear that.

[Busy ECE mommy]

Just mail the receipt to their mailing address or email address. You must provide it by law, and technically it should have been done by the end of February.
Cut your losses for January, as I doubt you will ever see the money.
Get a formal contract in a place going forward with any clients. Get a late payment penalty in place, and make it pricey, to deter this from happening again. Also, adopt the no pay, no stay rule. Don’t allow a child in the door until the payment has been made. Refuse them at the door if needed.
Also, take payment in advance of care taking place( ie like post dated cheques for 6 months at a time dated for payment all on the 1st, or divided between the 1st and 15th of each month)
Take an enrolment fee up front when they sign on of at least 2 weeks fees, to be used for their last 2 weeks of care, so you’ve got some compensation if they take off, and you keep the deposit.
Live and learn, we’ve all run into issues at some point, and revised our business practices moving forward.

[BlueRose]

You must provide a receipt for all money they have GIVEN you. You also legally have to claim all money given too you. So write one for all fees paid. Mail it (registered mail, so they have to sign for it). You can write off the money still owing to too with your taxes.

From now on I would do
Payment in advance. No payment = no care until paid

I would communicate via email only, so there is a record of what is being said.
I would write:
To X
I have prepared your tax receipt for the amount you have paid. Once I have received the outstanding balance of $XXX, I will issue you a receipt for that amount as well.

If you would like only one receipt with the full amount, send me an etransfer for the outstanding balance to the following email account: email address; by 5pm on X day.

If I have not received your outstanding balance by the above date and time I will mail you the receipt for just the money you have already paid.

Thank you for your time
X

[Suzie_Homemaker]

You must provide a receipt for all money they have GIVEN you. You also legally have to claim all money given too you. So write one for all fees paid. Mail it (registered mail, so they have to sign for it). You can write off the money still owing to too with your taxes.

From now on I would do
Payment in advance. No payment = no care until paid

I would communicate via email only, so there is a record of what is being said.
I would write:
To X
I have prepared your tax receipt for the amount you have paid. Once I have received the outstanding balance of $XXX, I will issue you a receipt for that amount as well.

If you would like only one receipt with the full amount, send me an etransfer for the outstanding balance to the following email account: email address; by 5pm on X day.

If I have not received your outstanding balance by the above date and time I will mail you the receipt for just the money you have already paid.

Thank you for your time
X

I would not do this.

Some of the fees were received in 2017 which is the tax receipt they are entitled to for their tax return. Some of the fees (the ones you are having trouble receiving) are for 2018. If you issue one receipt for the combined amount, that means you will have to declare all of this money on your 2017 tax return. We have to pay taxes and issue receipts based on when the money was EARNED not when it was received. It makes absolutely no sense to include the 2018 fees with the 2017 receipt because then you must pay tax on them before they were due or received.

If you get audited this year, having 2018 fees with 2017 income is a sure fire way to get a detailed audit.

[Suzie_Homemaker]

Regardless of what you decide to do about getting the owed 2018 fees, this is an ideal opportunity to review the lessons learned and see if you can protect yourself going forward with an new client.

Think about changing your policies so this cannot happen again - we all get caught out by a bad client sooner or later but it's a great way to tighten up policy going forward.

1. Take a deposit or entrolment fee for a new client on signing and don't spend it. Set that money aside to be applied to their final weeks of care. If they give notice properly, you have the money and if they don't, you have the money.

2. Require all clients to pay their fees in advance. That way there is never a child on the premises who hasn't already paid for today's care. If they show up on the day that fees are due and they haven't sent the fees, then do not give them access. No fees = no care. Most parents will just have genuinely forgotten and will send the fees electronically there and then. If a parent is messing you around, it's amazing how quickly they find the money they don't have due to that unexpected bill, when they realize they have no child care today until they have paid.

3. Include both a late payment fee in your policies and also a late collection fee. Anything from $10-$20 a day for late payment and $1 a min for late pick up. This means that if fees are due Friday for the following two weeks of care, when they show up Monday, they owe 2 x late payment fees and the actual fees and cannot leave their child until they have paid. You won't be the last person to be paid with penalities adding by the day.

4. Have a clear and written contract that the parent have to sign before joining your day home. Never allow someone to arrive on the first day without first having received that contact. I don't care if they forgot it, or any other excuse, without a contract with signatures they have no agreement for care to be provided and you have no agreement to be paid.

5. Make sure your contact included the days they are registered for care, the fees, when the fees are due, any penalty for late payment, and the fact that care will be denied if fees are not paid in time.

6. Whatever policy you decide on, document it in the contract and enforce it. If you permit children to come when fees are due, you are making the contract hard to enforce because if you aren't going to stick to it yourself, you cannot expect client's to.

7. Any time someone is late collecting their child, or paying their fees, charge the penalty. Do not feel guilty about applying the fees. It's really important the first time it happens to charge the fees as it sets a firm expectation. When you don't charge the fee the first time, the expectation is that you won't charge it the second or third time and that creates a situation where you feel even more guilty about applying it if you didn't before and where they are expecting to be let off the charges.

[BlueRose]

I would not do this.

Some of the fees were received in 2017 which is the tax receipt they are entitled to for their tax return. Some of the fees (the ones you are having trouble receiving) are for 2018. If you issue one receipt for the combined amount, that means you will have to declare all of this money on your 2017 tax return. We have to pay taxes and issue receipts based on when the money was EARNED not when it was received. It makes absolutely no sense to include the 2018 fees with the 2017 receipt because then you must pay tax on them before they were due or received.

If you get audited this year, having 2018 fees with 2017 income is a sure fire way to get a detailed audit.

Yes,your right. I had misread the original post.