Service Improvement Request - The Right to an Authorized Representative
Throughout the year our Office participates in outreach activities to engage with Canadians from Coast to Coast to Coast. Since the Summer of 2022, with the easing of pandemic restrictions, we have been fortunate enough to engage with taxpayers, benefit recipients, and tax professionals in-person. This has allowed us to better understand the issues some Canadians are facing.
In the Fall of 2022, we presented our Office services at the CPA Forum North and heard concerns about the CRA’s Assisted Compliance program.
After reviewing the information the CRA provides online about its Assisted Compliance program, we question whether the CRA contacting a taxpayer first provides taxpayers with the treatment they are entitled to from Taxpayer Right 15 of the Taxpayer Bill of Rights.
Taxpayer Right 15: You have the right to be represented by a person of your choice
According to the CRA’s webpage, its Assisted Compliance program has its officers contacting taxpayers instead of their tax preparer who may also be their authorized representative. The webpage indicates:
Although a professional tax preparer may have completed your tax returns, you are responsible for making sure you meet all your tax obligations. Generally, tax preparers will only use the information you give them to prepare your tax returns and may not be aware of all your tax obligations. This is why the CRA has sent this letter directly to you.
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.
The CRA indicates it “will reach out to taxpayers and work collaboratively with them” to help taxpayers better “understand and meet their tax obligations.” Further to its education-first approach, the CRA states it often uses letters to inform taxpayers of their obligations and to promote compliance. The CRA instructs taxpayers to discuss letters received as part of its Assisted Compliance program with a CRA officer, either by initiating contact themselves or by waiting approximately two weeks for the CRA officer to contact them by telephone, prior to speaking with their representative who may also be their authorized representative.
Encouraging taxpayers to contact a CRA officer first, before contacting their representative may create an issue. Individual taxpayers may rely on the expertise of their representatives for tax planning and may not fully understand the fine details because they leave them in the hands of their representatives and tax professionals.
CRA officers can discuss tax obligations with taxpayers, but those who need help to plan their tax matters are instructed to contact an accountant, a financial advisor or a tax expert. Therefore, advising taxpayers to contact the CRA prior to their tax preparer may limit individuals from receiving crucial tax advice about their tax and benefit affairs. This could lead taxpayers to being less informed about their taxes when contacting the CRA first.
We understand there will always be instances when contacting an authorized representative may not be the most efficient way for the CRA to operate, such as when it is collecting a debt that is not in dispute. However, if a taxpayer requests the CRA contact their authorized representative, then the CRA should respect this choice. Or, at the very least, the CRA should not warn the taxpayer that they should not speak with their tax preparer first. It send the wrong signal to tax preparers across the country.
To improve the service the CRA provides to Canadians and to reinforce the treatment Canadians are entitled to when they deal with the CRA the Taxpayers’ Ombudsperson requests the CRA update its publicly available information, to remove instances where the CRA suggests taxpayers contact the CRA first, when they want to be represented by a person of their choice.
After we made our request to the CRA it has updated the information it provides about its Assisted Compliance program and no longer advises taxpayers to contact the CRA before contacting their tax preparer.
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