National Post

CRA eases tax-filing pain

Some big wins but still room for improvemen­t

- Independen­t Voice Dan Kelly Financial Post Dan Kelly is president of the Canadian Federation of Independen­t Business and lead spokesman and advocate for the views of 109,000 small and medium-sized member businesses across Canada. Follow Dan on Twitter

Very few department­s or agencies stir as much consternat­ion among entreprene­urs as the Canada Revenue Agency. While some of this is due to its enforcemen­t mandate, a great deal of angst comes from issues such as bad or confusing advice, poor customer service and a lack of understand­ing of the realities of running a small business. In the past few years, however, I’ve witnessed a heartening evolution in their relationsh­ip.

Receiving timely, accurate and reliable informatio­n from the CRA is a big issue. The consequenc­es of misinforma­tion can seriously damage a business. Imagine being advised on the phone by a CRA agent to follow a course of action, only to learn the advice was wrong. If you think this is an issue only a few firms face, think again. A CFIB “secret shopper” study found CRA agents gave incorrect tax advice to business callers nearly 20% of the time, while CRA’s internal study showed incorrect advice was being given 25% of the time.

Yet, if a mistake turns up at audit, even with the telephone guidance of a CRA employee, the business will still be subject to penalties and interest, on top of taxes owing.

But significan­t progress has been made, which is why CFIB named Minister of National Revenue Kerry-Lynne Findlay the winner of the 2015 Golden Scissors award for the CRA’s effort to streamline how businesses remit taxes. The change allows smaller firms to remit taxes less frequently.

The CRA has been gradually implementi­ng changes that have added much accountabi­lity to a system that desperatel­y needed it. Some of the big wins for small businesses include:

CRA call centre agents now provide an ID number callers can record;

Business owners can now ask questions via the internet, through their CRA My Business Account, and re- ceive an electronic answer;

CRA will honour the advice it provides through My Business Account, even if it turns out to be incorrect; and

A Taxpayers’ Bill of Rights and a Taxpayers’ Ombudsman were introduced to promote fair treatment of taxpayers.

While we welcome these progressiv­e changes, more communicat­ion is needed to ensure small businesses are taking advantage of these new tools, particular­ly the ability to ask questions and get answers in writing.

So where does this leave the CFIB’s relationsh­ip with the CRA? Like they say on Facebook, it’s complicate­d.

The CRA is clearly moving in the right direction with its service delivery, and the various measures enacted to promote greater accountabi­lity. Its efforts to improve the relationsh­ip are laudable.

They would be that much more reassuring if they were not being undermined by a few vocal staff members at the CRA, who regularly engage in political advocacy on social media, railing against and sometimes even threatenin­g small business owners who dare to speak their concerns.

Twitter trolls aside, we’ve seen some real progress in our dealings with the CRA, and in particular, with Ms. Findlay.

In its 2015 pre-budget recommenda­tions, CFIB has another long list of requests, including ensuring tax bulletins are written in plain language and are respected even if incorrect; equalizing the interest differenti­al between money owed by CRA and money owed by taxpayers; updating rules to reflect the realities of the modern labour market (e.g., self-employed); and introducin­g a simplified method for calculatin­g homebased business expenses.

Let’s hope on budget day, the relationsh­ip between small business and the CRA continues to improve.

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