Systemic examination finds agency’s target timeframes lack transparency and fail to track performance
The Canada Revenue Agency (CRA) needs to provide better clarity to Canadians whose income tax and benefit returns and adjustment requests have been delayed, according to a new report from the Taxpayers’ Ombudsman.
In the report titled Sub-Standard, the Office of the Taxpayers’ Ombudsman (OTO) shared the results of a systemic review of the CRA’s processes that launched in March 2019. The review looked into the agency’s published service standards, how it reports against those standards, and service issues that emerge because delays in processing individual returns and adjustment requests.
“Despite the CRA reporting that it mostly meets or exceeds its published service standards … this does not necessarily align with peoples' experience,“ the OTO said in a statement, noting that delays are among the top issues cited in complaints it receives.
“Lack of clarity in the CRA's published information leaves many filers unaware their returns and adjustment requests may be excluded from or processed outside of the CRA's published service standard timeframes,” it added.
The OTO noted that in both processing returns and adjustment requests, the CRA’s published standards estimate a timeframe of two weeks for those filed digitally, and eight weeks for paper-filed cases. The time starts from the date of receipt by the CRA, which expects to meet the service standard 95% of the time.
But for the fiscal year 2019-2020, the CRA added that those standards do not apply to several types of cases, including:
- Returns for deceased persons;
- Returns for bankrupt persons;
- Returns for international and non-resident individuals;
- Returns for emigrants;
- Multiple tax years filed at the same time; and
- Returns where the CRA must contact an individual for more information.
The newly clarified standards, the OTO noted, result in a lower level of expected service for many tax filers. The exclusions also beg the question of how filers who fall within those categories will have to wait for their returns.
As for adjustment requests, the CRA’s latest published standards indicate that some cases are “considered complex and will take longer to process.” Examples listed by the agency include cases where:
- The CRA has to contact the filer or their authorized representative for more information or documentation;
- The request is to adjust multiple tax returns, or tax years beyond the normal 3 years reassessment period;
- The request is for a bankruptcy return;
- The request is related to a deceased person;
- The filer requests a carry-back amount such as capital or non-capital losses;
- The request is related to an international or non-resident person; or
- The request is for the elected split-pension amount.
Acknowledging that the list does more to explain what is and is not excluded from the standard, the OTO said that it does not go far enough to state what actions cause an adjustment request to be excluded. Filers whose requests have been excluded are also not informed about how long they should expect to wait.
“The CRA needs to find ways to reduce delays of the processing of returns and adjustment requests and do a better job of letting filers know how long it will actually take to process their return or adjustment request,” Taxpayers’ Ombudsman Sherra Profit said in a statement. “The delays and lack of clear and accurate information from the CRA about expected processing timeframes is frustrating to filers and can lead to personal and financial hardship.”
The CRA does not recommend filing paper returns on or close to the April 30 filing deadline, it told the OTO, particularly “if the filer is relying on their benefit payments for their day-to-day living costs,” as it increases the likelihood of returns not being processed on time to accurately reflect benefits.
