Systemic investigation into the Canada Revenue Agency's notification to taxpayers on duration of the disability tax credit

February 25, 2016

The Office of the Taxpayers’ Ombudsman is closing, without recommendation, its systemic investigation into the service and fairness issues arising from the Canada Revenue Agency’s (CRA) notification to taxpayers of the duration of their disability tax credit.

Background

The systemic investigation was initiated in 2013 as a result of complaints received in the Ombudsman’s office to the effect that the CRA had failed to provide sufficient information about the application and approval processes for the disability tax credit. Complainants reported believing that once their disability tax credit was approved by the CRA, it remained in effect indefinitely and that they were not aware that they had to reapply for the credit. As a result, these taxpayers reported being surprised to receive a notice of assessment indicating their credit was terminated. They felt that the CRA had failed to adequately inform them of the temporary nature of their credit.

The investigation focused on examining whether the CRA’s communication to disability tax credit claimants was clear enough for them to reasonably understand that it was approved for a determinate period and that they had to reapply for it at its expiry. The investigation also examined whether the CRA was providing notice to claimants about the upcoming expiry of their credit.

Our review of CRA eligibility decision letters to disability tax credit applicants found that they clearly indicated whether the approval was permanent or temporary. In addition the CRA informed us that starting in 2013, they were including a reminder on taxpayers’ notices of assessment about the expiry of their credit in the two years leading up to its expiry.

As a result we concluded that the CRA provides sufficient information to claimants about the permanent or temporary nature of the disability tax credit when it is approved. We also found that the CRA provides sufficient advance notice to taxpayers concerning the expiry date of their disability tax credit.

Next steps

A copy of this memorandum will be published on the Office of the Taxpayers’ Ombudsman’s website 60 days following its receipt by your office. A summary of our findings may also be included in our next 2015-2016 annual report or published in a future newsletter on our website.

Should you require additional information, please do not hesitate to contact me.

Original signed

Sherra Profit

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