St. Thomas man gets $8K from the bank after TFSA snafu

Bob Birchmore never though that depositing money would result in him losing over $8,000. After months of trying to recover his money, the bank said they'd reimburse him after CBC London started questioning the bank on its protocols.

Bob Birchmore unknowingly exceeded his tax-free savings account limit and got a massive tax bill

After CBC reached out to TD, they called Bichmore to reimburse the money he was charged by the CRA. (Michael Wilson/CBC)

Last year, Bob Birchmore went to the bank to make a large deposit, but he never thought that transaction would leave him more than $8,000 out of pocket.

In 2018, the retired teacher from St. Thomas, Ont., deposited two sizeable inheritance checks at his local TD Canada Trust branch. The money was from his aunt who had passed away.

"I looked out for her. She was almost like my mother for many, many years," Birchmore recalled.

Birchmore says he had the money placed in an existing tax-free savings account (TFSA). Less than an year after making the deposit, he met with a financial planner to move the money to an investment group. He says his planner reviewed the account and noticed he had exceeded the contribution limit. That's when his planner notified him that he would be taxed by the Canada Revenue Agency (CRA).

"It wasn't pleasant," he said.

TFSAs were established in 2009 as a way for people to save money without paying taxes on the interest. However, the accounts have an annual contribution limit set by the federal government. If a person exceeds that amount, they are subject to a 1 per cent penalty tax on the overage amount per month, until the balance is withdrawn.

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Birchmore had opened the account 10 years ago and hadn't used it in the last five years. He thought it was a "safe deposit box" of sorts.

"The issue is [the bank] should've given me a warning [at the time of the deposit] that there would be a tax issue," he said.

"They didn't say a word. Nothing verbal, nothing written. I'm not stupid, I would've immediately said 'no, don't put it in that account,' but they never said anything," he continued. 

Soon after Birchmore`s meeting with his planner, letters from the CRA started to arrive, saying that in total, between the two cheques and late filing fees, he owed $8,551.94.

What the bank is saying

CBC News reached out to TD Canada Trust to find out if the bank is responsible for notifying customers at the time of a deposit that their contribution will exceed the limit and, therefore, be subject to a penalty tax. 

"TFSA customers are responsible for adhering to individual contribution limits and financial institutions are not aware of how much contribution room a customer may have at any given time," TD Canada Trust said in a written statement.

But the bank's website suggests procedures are in place to help customers navigate the rules. 

"TD has defined procedures in place to remind customers of TFSA contribution limits – these details are reviewed with customers when a TFSA account is opened and are available on our website," it said.

While financial institutions may not be aware of how much contribution room a customer may have at any given time, in Birchmore's situation the deposits far exceeded the cumulative annual limits allowed by the government, a limit of $57,500 in 2018.

Bichmore paid over $8000 to the CRA in taxes after unknowingly exceeding his contribution limit. (Sean Kilpatrick/The Canadian Press)

Birchmore told CBC News that he tried to contact the bank for months to try and make sense of the occurrence, but he says very little progress had been made.

"After sending a letter, the customer service branch called me and said 'sorry, we can't do anything about it, but we'll give you $500,'" Birchmore said. "But, they didn't say anything about being sorry [for not notifying me of the excess], or try and remedy the problem."

Birchmore didn't think the offer was appropriate, and while the bank said it would call to discuss the matter, the call never came. 

A happy ending?

That's when Birchmore called CBC London. One day after a reporter contacted TD, Birchmore's phone rang. 

"They phoned saying that, taking into consideration that I was a long time customer, and it was a once in a lifetime error, they were ready to give me back the full $8,000," he said. "I feel terrific!"

Birchmore says that although he's getting the money back, he hopes his experience helps change the way banks communicate with customers. 

"Banks should notify customers in writing and verbally when they exceed the limit on TFSAs, so they don't run into this problem," he said.

"I will never put anything into a TFSA again."


Sofia Rodriguez


Sofia Rodriguez is a multimedia journalist with CBC News in London. You can email her at