CRA digital services: new self-service options
The CRA’s efforts to go digital have gone a long way toward simplifying and streamlining tax processes for taxpayers and practitioners. The CRA continues to develop new projects to improve its electronic services even more. As part of this work, the CRA often seeks practical input from CPA Canada and our members on the best way to design and implement new digital features. A key forum is the CRA-CPA Canada Technology Working Group, which brings together senior CRA officials, tax preparers, tax software developers and other stakeholders to share information and brainstorm ideas. At the group’s latest virtual meeting in May, the CRA previewed several service improvements now in place or in development as well as other planned changes. In this blog, we summarize updates to the CRA’s digital services in these areas:
- Modernizing T3 trust return processes
- Updating T1 adjustment processes
- Viewing T2 notices in certified software
- Confirm my representative
- Tax accounts, payments and balances
Modernizing T3 trust return processes
The CRA undergoing a major upgrade to its T3 trust return filing processes. The enhancements are especially important as draft tax proposals announced on February 4, 2022, will significantly increase the volume of T3 filings in the coming years if enacted. These rules would require certain types of trusts to report beneficial ownership information for tax years ending on or after December 31, 2022. This proposal was addressed in a submission made by the Joint committee on taxation of the Canadian Bar Association and CPA Canada.
In 2021, taxpayers gained the ability to register for a trust account through the CRA’s secure portals: My Account (MyA), My Business Account (MyBA) and Represent a Client (RAC). Starting in 2022, electronic filing similar to T1 EFILE was introduced for most types of T3s and some of the CRA’s initial assessment processes have been automated.
Coming in 2023, the CRA plans to expand T3 EFILE to include the new beneficial ownership information form (schedule 15) and T3A forms, with the remaining T3 returns to follow. The CRA is also exploring a range of self-service options for trustees and authorized representatives to view and update trust information online, similar to the features for individuals available in MyA.
Technology Working Group members welcomed these improvements but had questions about the process for authorizing trust representatives. In particular, stakeholders observed that there is currently no way to authorize a trust representative for online access to T3 information. The CRA noted that it is working on a process similar to those in place for T1 and T2 authorizations. While the details are being worked out, the CRA is looking into a specific way for trustees to add themselves as representatives online.
Stakeholders advised the CRA to keep the authorization process as simple as possible, since some executors and trustees (e.g., of estates) would be acting on behalf of family members and have little experience using CRA portals.
Updating T1 adjustment processes
The CRA’s work to encourage individuals to submit T1 returns using EFILE (and NETFILE for taxpayers that file their own returns) has had great success, with about 90 per cent of T1s now being filed electronically. While T1 returns can also be adjusted online to add or correct information through Change my Return and REFILE, the CRA still receives about two-thirds of T1 Adjustment requests on paper. For the CRA, this is puzzling because it takes about eight weeks for the CRA to process a paper-filed request but only about two weeks for requests made electronically.
Technology Working Group members suggested that practitioners may be paper-filing adjustment requests so they can attach supporting documents at the same time, rather than waiting for the CRA to ask for them later. This is particularly the case for documents, such as settlement agreements, that the CRA is likely to request. We have explained to the CRA that if requesting an electronic adjustment becomes a two-step process, then this would increase compliance costs and act as a barrier to filing these requests electronically.
For the CRA, however, this creates storage issues in housing large volumes of documents that it has not requested for verification. One suggestion was to allow for the upload of specific, frequently requested documents, with pop-up windows for documents that should not be attached but kept on file in case the CRA asks for them later.
Going forward, the CRA and CPA Canada will further discuss these issues and determine how to move more T1 adjustment requests online.
Viewing T2 notices in certified software
As of May 2022, business owners and their representatives can view corporate notices via Auto-fill my return in certified tax preparation software. All corporation Internet-filing certified software products that offer the Auto-fill my return service will include this new option in their products. Some software products may include this service immediately, while others will include it in their releases later in 2022.
The software will display the corporation’s most current notices (e.g., Notice of Reassessment) for a selected tax year. All of the corporation’s notices will be available for view in MyBA and RAC.
Confirm my representative
In October 2021, the CRA launched Confirm my Representative, which is a new second step in a two-factor authorization process for confirming representatives and preventing client information from being given to unauthorized representatives. With this process, a representative submits the signature page of a new client authorization using RAC and the authorization’s status remains pending until the client has confirmed or denied it in MyBA.
In October 2022, the Confirm my Representative process will be added to the EFILE method for authorizing representatives. Similar to the current process, the representative would submit the signature page for an authorization request using certified tax software and again the client would go to MyBA to accept or deny it.
Stakeholders have raised several practical issues about the new process for the CRA to consider. Among other things, several steps must take place before Confirm my Representative can be used efficiently. These include making sure the CRA has updated information on file about the business’s owners and directors, getting the right individuals signed up for and using MyBA, and enabling email notifications — all of which may be challenging where senior business executives or directors are involved.
CPA Canada will continue to provide feedback to the CRA to improve the process and hopefully strike the right balance between ease of service and security of taxpayer information.
Tax Accounts, payments and balances
The CRA’s Business Accounting Division is launching improvements in MyBA and RAC related to tax accounts, payments and balances. Some of these improvements were recently launched and some are coming later this year. These include:
- providing more detailed views of the individual transactions that make up an assessment or reassessment
- providing more details about transferred payments (including period-end and business numbers)
- adding a new column to clarify what transactions are applied as a credit or debit to an account
- restoring transaction table entries for previous, interim and closing balances
- allowing access to closed accounts in MyBA to previous activities and balances
The CRA is also expanding services for RZ type accounts. Currently, partnerships/nominees are the only RZ type that is included in the “View and pay account balance,” “Enquiries” and “Filing and balance confirmation letter” services. These accounting services will be expanded in fall 2022 to include RZ Contracts, RZ TFSA and RZ information return accounts, making accounting details and services available for all RZ account types in MyBA.
Electronic notices of assessment
In Budget 2021, the federal government announced several proposals that would change how the CRA communicates with taxpayers and their representatives. Among these proposals, the changes affecting notices of assessment are raising significant concerns. For details, see our September 21, 2021, news item “Budget 2021 electronic notices of assessment proposal.”
While we did not address this issue at the latest Technology Working Group meeting, we will be discussing it with the CRA in the coming months. The CRA clearly needs to significantly reduce the number of notices of assessment issued on paper, but several issues still need to be resolved. We will continue to provide feedback to the CRA as they determine their implementation plans and we will update you as things develop.