CRA not treat­ing all tax­pay­ers equally, AG findsi

The Miracle - - National & Int. -

The Canada Rev­enue Agency is not treat­ing all tax­pay­ers equally when it comes to au­dit­ing or re­view­ing tax files, a new probe by the fed­eral au­di­tor gen­eral has found. In or­der to make sure that all Cana­di­ans file their taxes prop­erly, the CRA is re­spon­si­ble for au­dit­ing or re­view­ing sub­mis­sions to en­sure com­pli­ance with the In­come Tax Act. Ac­cord­ing to a new au­dit done by Au­di­tor Gen­eral Michael Fer­gu­son’s of­fice, how your case is han­dled could de­pend on who you are, the CRA staff per­son con­duct­ing the re­view, or where you’re from. For ex­am­ple, in some cases the CRA didn’t al­low in­di­vid­u­als to claim some ex­penses if they could not pro­vide a re­ceipt within 90 days, while some with off­shore ac­counts were given months or even years to pro­vide the in­for­ma­tion. “We found that the Canada Rev­enue Agency did not con­sis­tently ap­ply tax rules when it au­dited or re­viewed tax­pay­ers’ files, even though the Tax­payer Bill of Rights in­cludes the right to have the law ap­plied con­sis­tently,” the au­dit states. Ac­cord­ing to the Tax­payer Bill of Rights, all tax­pay­ers in Canada are en­ti­tled to have the law ap­plied con­sis­tently, have to only pay what’s re­quired, and must re­ceive what they’re en­ti­tled to. Each year the CRA con­ducts these com­pli­ance ac­tiv­i­ties to as­sess tax claims for their ac­cu­racy, to both make sure Cana­di­ans pay what they owe, or re­ceive all ap­pli­ca­ble tax ben­e­fits. As the re­port states, these au­dits often re­sult in ad­just­ments to peo­ples’ tax re­turns. Among the rea­sons for the in­con­sis­ten­cies in these re­views was the judg­ment of agency staff dif­fered in ap­pli­ca­tion, the type of tax­payer be­ing dealt with such as a small busi­ness ver­sus a large cor­po­ra­tion; and the re­gion where the tax file was be­ing re­assessed. “Tax­pay­ers in one re­gion waited an av­er­age of seven months longer than those in an­other re­gion for the Agency to com­plete an au­dit. In one re­gion, it took the Agency more than 40 weeks to process tax­pay­ers’ re­quests for ad­just­ments, while in an­other re­gion, the Agency took 12 weeks,” the au­dit states. The au­dit also points out that not en­forc­ing these rules uni­formly is cost­ing the pub­lic purse in po­ten­tial lost rev­enue. As well, in the last five years, the CRA has waived $17 mil­lion in in­ter­est and penal­ties for some who were in the process of be­ing au­dited. In the 2016 and 2017 bud­gets the CRA re- ceived al­most $1 bil­lion to help crack down on tax eva­sion and en­force com­pli­ance. The CRA says it agrees with the au­dit’s rec­om­men­da­tions, which in­clude set­ting a pre­scribed al­low­able time­frame for these com­pli­ance au­dits to be con­ducted; and con­sis­tently ap­ply and en­force the In­come Tax Act, by 2020. In a state­ment, Na­tional Rev­enue Min­is­ter Diane Le­bouthillier said she wants to re­mind Cana­di­ans that she is work­ing on their be­half to make sure the tax sys­tem is fair. “With re­gards to our pro­cesses, through ed­u­ca­tion, out­reach and en­force­ment, the CRA con­tin­u­ously strives to ap­ply the law con­sis­tently while tak­ing tax­pay­ers’ in­di­vid­ual cir­cum­stances into ac­count,” she said. NDP MP David Christo­pher­son ex­pressed deep frus­tra­tion with the au­di­tor gen­eral’s find­ings. Cit­ing an au­dit re­leased in Novem­ber, 2017 that found that Canada’s tax col­lec­tors often aren’t pick­ing up the phone, and when they do, Cana­di­ans are be­ing given in­cor­rect in­for­ma­tion, he took is­sue with this lat­est rev­e­la­tion of un­fair prac­tices, specif­i­cally that “big cor­po­ra­tions and wealthy peo­ple” could be get­ting spe­cial treat­ment. Green Party Leader El­iz­a­beth May said she found the CRA au­dit “trou­bling.” “The CRA needs to shift its Sher­iff of Not­ting­ham ap­proach to tax-col­lec­tion and have the rich pay their fair share rather than con­cen­trate au­dits on hard­work­ing Cana­di­ans be­cause it’s eas­ier to have them pay,” May said. Con­ser­va­tive deputy leader Lisa Raitt told CTV’s Power Play af­ter the re­port was re­leased that the Lib­er­als need to “start manag­ing things bet­ter.” “In prac­ti­cal terms, when some­body who is just a reg­u­lar Joe (or) reg­u­lar Jane wants to call in to get some in­for­ma­tion from Rev­enue Canada, they can’t get them on the phone and they’re turn­ing to their Mem­bers of Par­lia­ment,” Raitt said. “So the cul­ture needs to be fixed.” Source: CTV News

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