Improvements coming to income tax Notice of Objection process - Canadian Tax Lawyer Analysis
In this 2 part article on the CRA review by the Auditor General of Canada our expert Canadian tax lawyers analyze the report and explain changes to the tax Notice of Objection process that CRA has agreed to implement.
The Auditor General of Canada went through the settlements of objections to assessments of personal and corporate income tax returns in the five years ending March, 2016, and examined :
- Time taken by the CRA to provide taxpayers with decisions on their income tax objections
- Delays occurred at various stages in the processing of objections
- Usage and communication of information on tax court decisions
The Auditor General came up with eight recommendations in two broad headings which the CRA agreed with :
- Processing of objections and measures taken thereof
- Communication of measures within the CRA
Processing of Objections and Measures Taken Thereof
The Auditor General concluded that the CRA did not fare well in processing income tax objections timely and adequately. It inaccurately reported the time taken to process such objections.
Inefficacious dealing by the CRA caused delays in settlements of tax objections.
Depending on the intricacy of objection, the CRA should make known to a taxpayer the expected time required to settle it.
By the end of 2016-17 fiscal year, the website of the CRA will contain:
- Expected and actual times with respect to each settlement of objection
- Steps to be taken to settle tax disputes
- Action plan with targets and its implementation with a view to reduce backlog of tax disputes to a reasonable level
The CRA is required to develop an action plan with targets and its implementation with a view to reduce backlog of income tax disputes to a reasonable level.
The CRA has already identified some areas causing delays in settlements of tax notices of objections. It is about to come up with a strategy to overcome them. It is going to finalize it in early 2017.
On review of its overall process of settlements of objections, the CRA should bring in suitable modifications in the process so as to reduce backlog of disputes to a reasonable level.
By the end of 2016, the CRA will review its overall process of settlements of objections. In early 2017, it will approach the taxpayers, if needed, for providing missing information required to make their filing exhaustive for settlement.
The Auditor General came up with a few more recommendations with a view to improving functional efficacy of the CRA. In Part 2 of this article about CRA improving the Notices of Objection process , our top Canadian tax lawyers will discuss them at length.
Continue reading Part to of the Improvements coming to income tax Notice of Objection process article.
"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."