Committees work toward better tax system

CPA Canada’s volunteer tax committees and working groups aim to improve the tax system in all its aspects. Learn more about the latest ideas and enhancements on their agendas.

Much of CPA Canada’s ideas and efforts toward improving Canada’s tax system come from the 100+ volunteers who serve on CPA Canada’s tax committees and working groups. Over the last several months, these volunteers have contributed their knowledge and insights for the benefit of Canadians and Canadian businesses on a number of tax-related fronts. Their technical advice and expertise are important in helping CPA Canada determine its tax policy positions and related pursuits. What have they been working on lately? Here’s a quick snapshot.

ELECTRONIC TAXPAYER SERVICES

As innovation changes the way the Canada Revenue Agency (CRA) delivers programs and services to businesses, CRA representatives meet regularly with a group of CPAs to discuss electronic service improvements in the works, and brainstorm ideas for solutions to common issues. Among the topics discussed at the CRA-CPA Canada Technology Working Group’s October 2017 meeting were:

  • the CRA’s newly launched T2 Auto-fill service
  • plans for phased automation of capital dividend account processing in My Business Account
  • upcoming and possible improvements to the CRA’s Submit Documents service
  • a new electronic option for authorizing representatives using T1 and T2 software, coming in May 2018

Another issue discussed was the process of authorizing tax representatives through Represent a Client. Responding to concerns raised by the group, the CRA has extended the time to submit clients’ signed business authorizations to 30 business days (from 10 days).

CPA Canada and the CRA also conduct joint webinars to update members on what is coming soon in digital services. Presenters for the recent Business Returns Program Update webinar delivered an overview of the CRA’s My Business Account service, along with “how-to” instructions on this and other popular services, including those mentioned above. If you missed the webinar, be sure to watch the replay.

Coming January 31, 2018 (English) and February 1, 2018 (French), CPA Canada and the CRA will co-host a new joint webinar on enhancements to the CRA’s electronic services for the coming personal tax season, along with an overview of upcoming improvements under the CRA’s e-modernization initiative.

T1 VERIFICATION PROCESSES FOR FOREIGN TAX CREDITS AND OTHER CLAIMS

Over the past few years, CPA Canada has periodically gathered members of the CPA Canada Small and Medium Practitioners (SMP) Tax Committee, representatives of national CPA firms and other stakeholders to discuss issues and solutions related to the CRA’s initial risk assessment and examination processes for filed returns.

As noted in an earlier post, tax practitioners have been urging the CRA to streamline its verification processes by, for example, reducing apparently excessive information requests and allowing enough time to respond. Among other credits, requests to verify foreign tax credit claims are especially difficult to satisfy, given the tight deadlines generally allowed to gather proof of foreign taxes paid to foreign tax authorities.

The T1 Verification Working Group met in October 2017 to discuss recent experiences and determine whether things have improved. CPA Canada later raised a number of the group’s ideas with the CRA’s Collections and Verification Branch, which may result in some improvements. In the area of foreign tax credits, these include:

  • the possibility that the CRA may allow more reasonable extensions of time for the provision of supporting documentation
  • the possibility that other forms of proof of foreign taxes paid (e.g., in place of foreign transcripts) could be accepted by the CRA
  • the possibility that the CRA may ease translation requirements for foreign tax documentation

COMPLYING WITH REVISED SUBSECTION 55(2)

Recent amendments to anti-avoidance rules in subsection 55(2) of the Income Tax Act—which aim to stop the conversion of taxable capital gains to tax-free intercorporate dividends—are so complex, taxpayers and tax practitioners are having difficulty determining how best to comply. In an earlier meeting, CPA Canada raised some of these concerns with Finance Canada. At the latter’s request, the Joint Committee on Taxation of the Canadian Bar Association and CPA Canada (JTC) met with the CRA to discuss administrative solutions that could help taxpayers meet their obligations under these complex amendments. Some of the issues submitted earlier in the year and discussed in the meeting were addressed at the CRA Roundtable at the Canadian Tax Foundation’s annual conference. The CRA’s written responses were issued to conference attendees in early December 2017.

The JTC has also been extremely active in other areas in the past while, developing detailed submissions on the CRA’s advance tax rulings process, the CRA’s voluntary disclosure program and, of course, the taxation of private corporations. Visit the Joint Tax Committee’s webpage to view these and other submissions.

MORE TAX COMMITTEE WORK

Other CPA Canada tax committees have been equally active in their specialty areas. For example:

  • The joint CRA-CPA Canada Compliance Committee, established under the Framework Agreement for collaboration (see this recent post), discussed improvements in dispute resolution arising from audits, the new CRA audit survey and other audit issues.
  • The Industry Tax Committee has had discussions with the CRA toward clarifying the CRA’s policy on tax working papers in light of the recent decision in the BP Canada case (discussed in a recent post). Other topics include CRA quality control over notices of assessment and best practices in dispute resolution.
  • The Commodity Tax Committee (CTC) offered advice to the CRA toward resolving issues related to the CRA’s Refund Integrity Group (e.g., related to new housing rebates on multi-unit residential complexes) and filing issues for selected listed financial institutions. The CTC also provided suggestions for service enhancements in the CRA’s approach to administration and enforcement. In addition, the CTC made recommendations to the CPA Competency Map Committee for greater coverage of GST topics within the CPA Competency Map.
  • The Scientific Research and Experimental Development (SRED) Committee had discussions with the CRA on the objections process, the CRA’s approach to SRED claim audits (e.g., timelines, documentation, reviewers’ decision-making discretion) and other administrative issues.

These initiatives are just some of the ongoing work benefiting from the cooperation and trust that continues to grow between CPA Canada’s tax committees and officials across the CRA. The insights and advice of our tax volunteers help CPA Canada bring depth and scope to its tax policy work that would be impossible without them. From dealing with new tax changes to enhancing tax return filing and verification processes to streamlining objections and appeals processes, I look forward to working with my fellow CPAs to help the CRA build a truly world-class tax system for the benefit of Canadians, their businesses and the economy overall.

KEEP THE CONVERSATION GOING

If you have ideas for issues that CPA Canada’s tax committees can tackle, I’d like to hear from you. Tell us your ideas for making Canada’s tax system simpler and more efficient for taxpayers, practitioners and the CRA alike.

CPA Canada’s Tax Blog is designed to create an exchange of ideas on tax policy and practice issues, and their impact on those who practice tax. Your comments can provide helpful input into the public interest advocacy positions developed by CPA Canada.

Disclaimer

The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Bruce Ball, FCPA, FCA, CFP

Vice-president, Taxation, CPA Canada