Accelerating tax dispute resolution: What’s next for Canada?

The Canada Revenue Agency is working to streamline its processes for resolving tax disputes. Learn about the latest updates so you can successfully navigate tax audits, assessments and appeals in 2018.

The Auditor General of Canada recently examined the Canada Revenue Agency’s (CRA) objections and appeals process to help speed up tax dispute resolution. The study revealed that the number of outstanding tax objections had increased by 171 per cent since 2006, while the number of staff working on objections only rose by 14 per cent.

These findings offer us insight on the persistent backlogs that apply to low-complexity issues, such as personal tax credits and deductions, the Canada child benefit or disability tax credits. Meanwhile, more complex cases, like business expenses and other issues for small and medium corporations, could take upwards of 233 days to assign and 198 days to resolve.

NEW SERVICE STANDARDS FOR RESOLVING DISPUTES

To remedy these challenges, the CRA introduced a new service standard for low-complexity objections: resolution within 180 days from the date submitted, 80 per cent of the time. As of December 2017, this standard is being met in 78 per cent of income tax cases and 92 per cent of GST/HST cases. Steps taken by the CRA to achieve these improvements include:

  • updating complaints and dispute-related web pages to provide better information about the different levels of complexity for objections and their processing times
  • enhancing internal processes and hiring more employees to reduce delays for the objections inventory
  • communicating with most taxpayers within 30 days of receiving an objection to ensure their file is complete and ready to be worked on

Starting in April 2018, the CRA will set a new service standard for resolving medium-complexity objections within 365 days, 80 per cent of the time. As a CPA, you can help the CRA meet its new targets by fully communicating your client's facts, including any new information, early in the review or audit stages.

You can also do your due diligence by ensuring your client’s objections are valid and, in some cases, by requesting tax return adjustments instead. We encourage you to familiarize yourself with some of the most common myths that prolong the resolution of tax disputes.

Providing timely, client-focused service to Canadians is a top priority for the Canada Revenue Agency. We look forward to continuing our work with the CRA to improve the objections process for all parties, including the public and members who work as tax practitioners.

BUILD YOUR TAX DISPUTE RESOLUTION SKILLS

If you’re looking for a comprehensive primer on practical strategies for resolving tax disputes, consider registering for In-Depth Tax Dispute Resolution from March 6-7, 2018. This CPA Canada in-person course will help you navigate the key features of the audit, assessment and appeals process so you can better manage tax controversies and achieve early resolution where possible.