Tax preparer registration – CRA seeks input on new risk-based approach

Canada Revenue Agency (CRA) is seeking input on the design of a new registration program for tax preparers.

Canada Revenue Agency (CRA) is seeking input on the design of a new registration program for tax preparers. The program’s goal is to ease compliance for those who want to comply – and make non-compliance more difficult.

In its consultation paper, CRA says the program is part of its new risk-based approach to tax compliance. Other elements of the plan include a renewed audit focus on high-risk files and the introduction of liaison officers to help taxpayers at critical compliance points such as at start-up.

The new program would require registration by practitioners who prepare T1 and T2 tax returns for a fee. CRA intends to identify tax preparers through a personal identification number, evaluate the quality of the tax returns they prepare, and work with them to improve the accuracy and completeness of their returns.

CPA Canada is consulting with CRA as it works out the registration program’s details. With aspects of the program still to be determined, many important questions are still to be answered. For example:
  • What steps can CRA take to minimize any additional complexity or red tape that could result from the program?
  • How can CRA distinguish between tax preparers’ errors and errors resulting from the completeness of information provided by their clients?
  • Where tax preparers are employees, should CRA’s risk assessments be reported to their employers?
  • Would you have concerns if CRA decides to publish the registration and/or preparers’ risk assessments?
  • Are there administrative rules (e.g., deadlines, information reporting) that could be changed which would ease compliance for preparers and taxpayers?
  • What enhanced services could CRA provide to help tax preparers improve the quality of the tax returns they prepare?
  • When would sanctions be applied? What will those sanctions be? Should existing regulatory bodies, such as those for CPAs, be the ones to enforce sanctions?
CPA Canada counts a large number of professional tax preparers among our members, and we are committed to working with CRA to improve our tax system. Now is the time to share your views and any concerns you may have about the program. Your thoughtful responses to these proposals will be crucial in helping shape the program that is eventually implemented.

Join in the conversation… Do you agree that this program could help achieve the goal of easing compliance for the majority of tax preparers and taxpayers while making non-compliance more difficult for others? How will your practice be affected? What specific concerns should CRA address in developing detailed rules to govern the program?

Post a comment below, or email Gabe Hayos.  

Conversations about Tax is designed to create an exchange of ideas on tax policy and practice developments and issues and their impact on Canadian accountants who practice tax. Comments received can provide helpful input to the public interest advocacy positions developed by the Chartered Professional Accountants of Canada.

About the Author

Gabe Hayos, FCPA, FCA, ICD.D

Vice-president, Taxation, CPA Canada