Dear valued clients,
As we look toward to your 2017 tax filings we feel compelled to advise you of our assessment of current state of the Canada Revenue Agency ("CRA") and the implications for you as honest taxpayers.
Service levels at the CRA have gotten significantly worse In the last two years
In late 2017, the Auditor General ("AG") of Canada issued a report on services levels at the CRA and found that 67% of attempted phone calls to the CRA were either blocked or simply not answered. They also found that the information and advice given to taxpayers was often unreliable or incorrect This lines up perfectly with the experience that we have had over the last two years where we have seen longer and longer delays in getting anything done and many errors in CRA assessments. We have filed more service complaints with the CRA in the last two years than in the previous ten.
These long delays and errors are frustrating for you while you wait for issues to be resolved and cost you money for time we have to spend to deal with the CRA on your behalf.
In the light of the scathing report issued by the AG, the Minister of National Revenue has said that she is going to improve the service at the CRA but we shall see ... the issue is that they have moved all their resources away from assisting honest taxpayers to auditing you (see the next note)
The current government should be mandating the CRA to provide reasonable service to the Canadian taxpayers who pay all the bills for them and the country.
Audit actions are increasing and getting more aggressive
The number of pre and post assessment reviews has been steadily increasing over the last two years and as well we have seen a new crop of computer generated "nuisance" audit projects come out targeting small businesses and individuals. We have also seen that the CRA assessments have become more aggressive, denying reasonable credits and deductions to taxpayers on technicalities and documentation.
These reviews cost you money for time we end up having to spend to justify your legitimate claims and credits and even worse, when your claims and credits are denied on technicalities, you end up paying more tax than the law says you should have to.
The current government should be mandating the CRA to focus its enforcement efforts on tax evaders and non-filers and not on squeezing money out of honest taxpayers.
It is unclear who is running the ship at the CRA
In the fall of 2017, the CRA posted notices on its website that made it clear that there were now going to tax discounts on merchandise for employees (most of whom earn the minimum wage).
After public outrage, the Minister of National Revenue came out to say that she did not know anything about this apparent change in policy and the CRA backed-off.
Late last year, the CRA started declining thousands of people with Type 1 diabetes the disability tax credit that they had previously been allowed. The Minister of National Revenue stood up in the House of Commons on multiple occasions to say that nothing had changed with respect to the credit but again, after public outcry, they backed off.
On the surface of all this it is clear that the CRA is trying to squeeze as much money out of taxpayers as possible without actually raising tax rates. The current government needs to provide a clear mandate to the CRA or be honest about the mandate that it has given to the CRA. So what can you do?
Certainly we will continue to strive to make sure that your tax filings are done on time and right the first time to try to limit the amount of time is needed to deal with the CRA and you are going to want to ensure that you keep good, clean and clear records for any claims that don't want the CRA to deny.
You can also email your concerns (perhaps the bolded items above) to your local Federal MP or the Minister of National Revenue or better yet to Justin using the emails below.
TCG Chartered Professional Accountants LLP