Evaluating the CRA and Finance: Auditor General consultations

The Office of the Auditor General of Canada is consulting the tax community on possible future audit topics for the Canada Revenue Agency and Department of Finance. Find out the views that stakeholders shared at a recent CPA Canada roundtable.

At the request of the Office of the Auditor General of Canada (OAG), Chartered Professional Accountants of Canada (CPA Canada) recently brought together CPA Canada tax committee members, and representatives of the OAG and many of Canada’s leading tax community organizations.

The OAG’s performance audits determine whether federal government departments and agencies are:

  • acting within their mandate
  • appropriately accountable to Parliament
  • making appropriate use of government revenues

Selection of OAG audits is based on identified risks and judgment of the impact and likelihood of these risks.

Given the vast number of government activities and the OAG’s limited resources, choosing topics for performance audits is an important and complex exercise. The OAG was seeking advice from stakeholders on process areas where improvement may be possible, and might materially enhance the administration of tax legislation.

Numerous areas identified

Among the areas noted at the meeting:

  • The transparency of the CRA’s objectives in requiring disclosures and the usefulness of this information. For example, stakeholders pointed to the CRA’s reluctance to explain their objectives behind the complex Form T1135 Foreign Property Income Verification requirements and how it intends to make use of this information.
  • The CRA’s organizational structure and appropriateness of resources. Stakeholders felt that the CRA could improve its effectiveness by redeploying staff to under-resourced areas, for example, to improve the quality of technical information and the timeliness of appeals.
  • The ability of the CRA and its auditors to apply discretion in administering the tax system. For example, assessments and penalties are often applied for only nominal amounts, sometimes because the CRA is bound to apply them and has no ability under the law to provide leeway.

Some issues being addressed

A stakeholders report summarizes these and other items raised at the meeting. Stakeholders noted that the CRA is already working to address some of these issues — often in collaboration with CPA Canada under the new Framework Agreement (see my earlier blog).

KEEP THE CONVERSATION GOING

Where do you think there is room for CPA Canada to help encourage process improvements within the CRA and Finance’s Tax Policy Branch?

CPA Canada’s Tax Blog 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 CPA Canada.

About the Author

Gabe Hayos, FCPA, FCA, ICD.D

Vice-president, Taxation, CPA Canada

Highlights

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