Form T1135 creates significant challenges for taxpayers, tax preparers and members of the investment community. Although the Canada Revenue Agency (CRA) has made progress in relieving some of the filing burden, more needs to be done. This message is central to Chartered Professional Accountants of Canada (CPA Canada)’s December 2014 letter to the federal ministers of National Revenue and Finance.\nIn her reply, Minister of National Revenue Kerry-Lynne D. Findlay says the CRA recognizes the challenges some taxpayers and tax preparers may face in meeting T1135 obligations. She also replied to three key recommendations:\nRESTORE AND EXPAND THE EXCEPTION FROM FORM T1135 REPORTING FOR SECURITIES HELD IN CANADIAN BROKERAGE ACCOUNTS.\nThe minister says that the CRA does not receive key information about the value and location of assets on other reporting forms (e.g., T3, T5, T5013, T5008). The additional information “strengthens the CRA’s ability to assess risks and identify potentially abusive tax avoidance strategies.”\nELIMINATE FORM T1135 REPORTING OBLIGATIONS FOR TAXPAYERS WITH FOREIGN PROPERTY HAVING A COST OF UP TO AT LEAST $250,000. \nThe minister notes the federal government’s Budget 2015 alternative action of simplifying the reporting of specified foreign property between $100,000 and $250,000, for 2015 and after.\nEXTEND THE FILING DEADLINE FOR FORM T1135 REPORTING TO JULY 31 FOR INDIVIDUALS (INCLUDING TRUSTS). \nGiven other simplification measures that are or will be put in place, the Minister says this would be an “extraordinarily long delay,” but she will consider the request for a potential extension for future years.\nFinally, the letter has good news for taxpayers who make diligent efforts to comply with Form T1135. The minister clarifies that the CRA aims to be reasonable in applying penalties. For T1135, penalties will only be assessed where the taxpayer both:\n\n did not file the required form and provide the information it requires \n\n\n did not report income from a specified property on their tax return\n\nWhile the minister’s responses are helpful, there is still considerable scope for streamlining T1135 reporting. CPA Canada will continue to work with the CRA to find ways to reduce the red tape that the current system creates while ensuring the CRA can get the information it needs to enforce compliance.