Taxpayers' Ombudsman And The Taxpayer Bill Of Rights

In Canada, taxpayers have legal rights listed in the Canadian Revenue Agency Taxpayer Bill of Rights. The Ombudsman was established to help enforce the Taxpayer Bill of Rights and is independent of the CRA.

So, what exactly does the Canadian Tax Ombudsman do? Well, they don't deal with tax policy or program legislation complaints and won't review issues that are going to court. Also, they can't direct the CRA to take any actions. In fact, it is the Tax Courts' responsibility to review Canada Revenue Agency assessments before directing the CRA to make changes.

However, the Taxpayers' Ombudsman will deal with complaints about services, including misleading or poor information, delays, mistakes or behavioural issues by staff, or anything of this nature. Service complaints may be submitted via a tax accountant, which is a good idea if it needs any kind of technical explanation. There is information about submitting tax service complaints on the Ombudsman website.

There are 16 rights that Canadian taxpayers have regarding the Canadian Revenue Agency as outlined in the Bill of Rights. Some of these rights are as follows:

  1. You can receive entitlements and pay no less and no more than what's legally required.You will receive credits, benefits, and refunds to which you're entitled. However, you still must submit a claim for any credits you are allowed to receive since the CRA won't necessarily know if, for example, your child is entitled to a child fitness credit.
  2. You have the right to confidentiality and privacy.Only CRA employees are required to see your information and access it.
  3. You must be treated fairly, courteously and professionally,including audits and interview planning as well as when asking for information.
  4. You can request a formal review and an appeal if needed.If you disagree with a proposed assessment on your income tax, you can have it reviewed and, if necessary, appeal afterwards.
  5. You have the right to interest and penalty relief in the case of extraordinary circumstances.Revenue Canada is obligated to consider cancellation or waiving requests for penalties or interest fees if the taxpayer couldn't pay because of extenuating circumstances, including financial hardship.
  6. You can be represented by whichever income tax professional you choose.
  7. You can request a review or lodge a complaint without fearing reprisal.You are to be treated impartially and fairly.

CRA Tax Compliance Activity Report
An audit report was released in 2018 by Canada's Auditor General regarding tax compliance efforts. The CRA was examined to ensure it was consistent in applying the relevant laws and monitoring and reporting its performance to Canada's federal government. The Canada Revenue Agency failed at both.

They were seen to have given some taxpayers better treatment than others. This treatment included some people given less time to respond to proposals, different or unprompted penalty relief standards, and delayed reassessments resulting in additional interest fees. In particular, the CRA favoured taxpayers with offshore assets and big international companies.

Large corporate taxpayers or individuals with offshore transactions or assets were often granted extra time before deadlines, while others didn't get as much time. This wasn't just days either - some were granted months or even years on top of what other taxpayers would receive.

In response to these findings, the Auditor General recommended the following steps for the CRA:

  • Consider proactive relief in all kinds of compliance activities for taxpayers.
  • Set the same time limit for every taxpayer or business regardless of size and wealth.
  • Develop a better tracking process to keep an eye on assessment processing time.

CRA responded by pledging to implement these recommendations and form an action plan to review its procedures concerning each one.

CRA Fails to Monitor their Performance
Another finding by the Auditor General was that the CRA didn't measure their performance which, in turn, meant it couldn't be accurately reported.

The CRA was found to have closed most assessed additional taxes and tax audits by the end of March so they could report their annual performance in time, they weren't able to explain how annual revenue goals were established, and they failed to track their budget spending to generate more revenue. They also overstated the revenue generated since they did not account for written-off tax debts and disputed taxes.

Tips for Dealing with the CRA Regarding Tax
The report from the Auditor General doesn't seem to surprise most experienced accountants since the CRA enjoys expansive powers of compliance and tax auditing, both of which are respected by the courts.

Due to this, our accountants are experienced in dealing with CRA tax auditors, collectors and appeal officers. So, if you are having issues with an aggressive or incompetent CRA employee, you might like to seek our professional advice because if the CRA is auditing your tax return, you won't get anywhere by ignoring their requests for information.

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The content of this blog/article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Our firm does offer a FREE initial consultation (30 minutes).