October 8, 2022

The Tax Man Cometh

Tax Compliance@2X

October 8, 2022

With the Thanksgiving long weekend, I’m thankful to work in a profession with a number of excellent colleagues, and awesome clients who allow me to do so and the trust they place in me.

I’m less thankful for the new Canada Revenue Agency Assisted Compliance Initiative which seems to, once again, try to do an end run around the taxpayer/tax preparer relationship. In essence, the CRA will be following up with some taxpayers about aspects of their tax filing. There are no details regarding the criteria about which issue they’re following up on, or who they will be following up with.

They do ask:

We suggest you discuss the details of the letter with the CRA officer to make sure you fully understand your obligations before contacting your tax preparer.

And if an adjustment is needed:

If you would like us to change one or more of your tax returns, you have to submit a request for an adjustment. The assigned CRA officer can help you complete these forms.

As a professional accountant I stress to my clients that their returns are their responsibility, and based on the information they provided to me. There is a lot of trust in that relationship, and it goes both ways. I trust that they have disclosed everything, and they trust in my professional experience that I have been able to draw out all the necessary information for them to file their returns accurately.

With this initiative, it feels that the CRA is working to erode that relationship, and is starting to position themselves as preparers of tax returns, rather than the agnostic assessors and administrators of our self-assessed tax system. I also fail to see why this initiative is needed when there is already a pre/post assessment system of tax returns.

Now maybe they’re targeting certain transactions, but everybody whose disabled grandmother has their medical expenses followed up on every year won’t accept that. And that I can reliably predict which of my clients will receive follow ups, and am clear on what is needed as supporting documentation, means I don’t accept this either.

So, if there is an overall compliance issue, let’s have a conversation about that. If it’s a preparer knowledge issue, let’s have a conversation about that. And if it’s taxpayer education issue, let’s have a conversation about that.

And based on those conversations, if there’s problem, let’s resolve it. Let’s not offer a solution in search of a problem.

In the meantime, if you get a letter from the CRA inviting you to participate in this, have a conversation with your tax preparer as soon as possible. And if you don’t have one and need some guidance, call me.


WRITTEN BY

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Brian K. Hlady

Chartered Professional Accountant

CPA Canada In Depth Taxation

Xero Certified Advisor

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