News Release: Taxpayers’ Ombudsman releases report on CRA’s debt collection process
OTTAWA, March 6, 2019 –The Taxpayers’ Ombudsman, Sherra Profit, is proud to release her latest report, Fair Warning, the 12th systemic examination report published by the Office of the Taxpayers’ Ombudsman. The report examines service issues related to legal warnings issued by the Canada Revenue Agency (CRA) to taxpayers during its debt collection process.
The Taxpayers’ Ombudsman examined the CRA’s practices regarding legal warnings based on complaints received from taxpayers alleging the CRA was taking legal actions, such as garnishing wages or freezing bank accounts, without notice.
Launched on February 21, 2017, the examination focused on the CRA’s debt collection policies, processes, and procedures on providing legal warning to taxpayers. It also looked at whether the CRA gives clear and accurate information to taxpayers about the collection measures it can take. The taxpayer experience in the CRA’s debt collection process was an important part of the research.
The examination revealed that while only a small number of taxpayers do not receive a legal warning prior to the CRA taking legal action to collect a debt, taxpayers often lack understanding about the consequences of not paying.
As a result of this examination, the Taxpayers’ Ombudsman made nine recommendations to the Minister of National Revenue that call for the CRA to:
shorten the validity period of the legal warning from 365 days to 180 days;
update its policies to ensure all relevant information is given to taxpayers when they are issued a legal warning;
update information available to taxpayers on the collection process;
update its internal and external messaging to ensure all debt payment and collections related terminology is clearly and consistently defined and used;
ensure sufficient training is provided to all staff in the collection process;
conduct a fulsome review of processes, policies, and information regarding payment arrangements;
make information available to taxpayers on the requirements for a binding payment arrangement;
send confirmation letters to taxpayers who make payment arrangements; and
regularly review its payment and collection policies and procedures to ensure they align with a service approach consistent with the Taxpayer Bill of Rights.
The Minister of National Revenue and the CRA have accepted all nine recommendations.
“A debt collection process that is fair means respecting the taxpayer right to complete, accurate and clear information. This means the CRA looking at the information it provides from the taxpayer perspective. The CRA has the obligation to collect debts. And, taxpayers have the right to understand that process. They have the right to understand whether the payment arrangement they have made is binding such that the CRA will not proceed with legal action if they are making their payments.”
“It is important the CRA ensures its legal warnings in debt collection are clear. The consequences need to be explained in a way that is understood by the taxpayer.”
Sherra Profit, Taxpayers’ Ombudsman
About the Ombudsman
The Taxpayers' Ombudsman is responsible for advising the Minister of National Revenue on matters relating to services provided by the Canada Revenue Agency (CRA).
The Ombudsman may initiate a systemic examination at the request of the Minister or on her own initiative. Service issues are deemed systemic when they may impact a large number of persons or a segment of the population. Recommendations arising from these examinations aim to improve the service provided by the CRA to taxpayers and benefit recipients.
This is Ms. Profit’s fourth systemic examination report to be published since she took office in July 2015. In those reports, she made 21 recommendations to the Minister of National Revenue, 20 of which have been accepted.
The "Fair Warning" report is available on the Ombudsman's website at:
Office of the Taxpayers’ Ombudsman
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