News Article

In your opinion, has CRA stepped up audit activity on returns of average Canadian tax filers?

Comments

The number of audits and reviews has definitely increased.  What’s the most frustrating aspect of this?  Not being able to get a hold of CRA!  I’ve had review information sent in for 10 or more weeks with no answer, and the only agents I can get through to tell me they can’t tell me anything, I need to call another number… a number that has a brief recorded message, then transfers you to a busy line.  I have clients frustrated that they have waited months with no news, and I am unable to find answers for them!  So frustrating, and unbelievably time consuming!  If CRA wants to increase the number of reviews they need to have the resources in place to handle it!

By Jodi on November 15, 2017

Yes, there are more audits. CRA is trying to grab every last penny they can.  I haven’t confirmed these claims, but according to one article if they are trying to get information on a taxpayer they have suspicions about, they will check out the person’s Facebook page.  Today on MSN, it was reported that: ‘’The Federal Court of Canada has ordered U.S.-based PayPal to hand over details about its business account customers to Canadian tax authorities. The court order, obtained by the Canada Revenue Agency, forces the U.S.-based payment processing firm to release information about Canadians with PayPal business accounts who processed transactions between the start of 2014 and last Friday.’’  And, it does appear to be the young, the old, and the small business tax payers that CRA is clamping down on.  The ones with less knowledge and money, and who are more likely to pay up than large corporations or high net worth clients who can hire expensive attorneys – Donald Trump is a prime example.

By Martin on November 15, 2017

I completely agree with previous comments on inappropriate timing of assessments and re-assessments. I’m in this business for 20+ years and have in average 120+ clients each year. One of my clients received assessment for 2015 made by CRA itself. In May 2017 I’ve sent T1ADJ, my client received confirmation of that letter in August and we’re told over the phone that re-assessment will be done not earlier than January-February 2018. Such process is absolutely unacceptable.

By Valeri Kaushansky on November 15, 2017

Yes, more assessment reviews have come through this year, however, I don’t have an issue with them.  What I have an issue with is the results.  Quite legitimate deductions are disallowed, for some crazy reasons.  Some will now go to the objection stage, as the 90 days since the re-assessment is approaching.

By Tineke on November 15, 2017

The unfortunate thing is that yes, they have been stepped up and mainly computer generated reviews and audits based on parameters.  These parameters seems to be set to the “low hanging fruit” - Students and seniors.

The problem is that CRA doesn’t have the resources to review the information being requested and submitted and also seem to have adopted a “reject and let appeals deal with it.”

By Alan Rowell on November 15, 2017

Its good that CRA is doing reviews but taking 21 weeks to do a simple Eligible dependant review is ridiculous. 2ndly, despite sending in documents multiple times it is still being alleged that they are not receiving the documents. 3rdly, getting CRA to pay refund has become impossible.

By Diamond on November 13, 2017

We saw a definite increase in pre- and post-assessments on our clients. The ones we received the most often were proof for claiming the amount for an eligible dependent, medical expenses, and moving expenses.

By Mary Madsen on November 12, 2017

This has been the worst year yet.  I have been doing tax returns for nearly 50 years.  I do about 300 T1’s a year.  So far I have had over a dozen reviewed.  It seems they need to keep the new folk in Sudbury busy with busy work.  One fellow bought a house and claimed the house credit.  In June I called to see what the holdup on his return was, again in July, and August.  Always told “it is in the works.”  Finally in September I was told they had sent the client a letter the beginning of August wanting proof of the purchase and were upset that he had not yet replied.  When I asked where they sent it - it was his OLD address, even though they had his new address!  And why was the letter not sent to me, his authorized rep?  No answer.  Eventually I spoke with the author of the letter and he said “oops, my mistake” on the address and “I didn’t think it warranted an accountant” about not sending the letter to me.  His refund finally went out Nov 6! Ridiculous!

By Pat on November 09, 2017

As an honest taxpayer I appreciate the checks and balances that CRA is conducting.  If you have all the receipts, documents and necessary information on hand it should be no big deal if CRA asks for verification.

By Mariettte on November 09, 2017

I am a Canadian citizen and financial professional who moved to the US to work and then returned in 2015, filing my proper tax forms advising of the return to Canada (I use highly regarded major international tax experts to prepare my returns and give advice).  CRA has been killing me with single questions for the past 18 months and re-asking the same questions.  They confirmed in 3 phone calls that I am entitled to the TFSA contribution for the year of return, but have applied a large penalty until they can get their records straight.  Each time I send the answer to a single question they ask the same question again.  Yet I cannot talk to the actual person handling the file.  They also audited a couple of simple issues in the returning year and granted the full deductions.  I am meticulous about my tax reporting but am starting to feel that they are just hassling people?

By Barbara on November 08, 2017

I think the increase in CRA reviews and audits is quite simply because there are more do-it-yourselfers each year.  It is so easy with the tax programs that are available, and the ads that say how easy it is to file your own returns that people have the misguided notion that they have the knowledge and experience to file and claim what makes sense to them, maybe not what they can actually legally claim.  Of course in a self-assessment society there must be checks by the authorities, (CRA), to make sure these returns are filed correctly.

By Katherine on November 07, 2017

I have been preparing taxes for more than 30 years.  I can not understand the increase for addition information.  From public transit amount to eligible dependant.  We do 2,000 returns a year.
I am still having a problem with a client who lives in the UK, but he has ties here.
Why do they not go for the people who are hiding money off seas?  Because they have big money to afford big tax lawyers.  And that costs money.  But we “little” people are picked on mostly because we will comply.

By Elaine Keene on November 05, 2017

My son got a review for a 100 travel moving allowance. Probably refund is 40.00 My son is happy to get any refund considering he has to move to a far place. Brampton to Ottawa to get a job in his field. He has no intention to fraud. He has a lot of student loan debt to pay. He sent back a letter explaing his travel times that day when he moved and claim approx 100 expense. Also he sent them a letter from his new employer proving he got a new job there. But they wrote him back saying they wont honor the 100 and they will put it back. He is waiting for the bill and hopefully there is no penalty. In lieu of the expenses one can go to a justice of the peace and swear that you spend that much in.your travel expenses that one day of move. I think these agents are just happy to get money from.more vulnerable people in this case a worker who has to move away from home and has lots of student debts at 22?% interest annually. It is more a waste of money for a federal Govt to hire more workers who will get defined pension plan while ordinary people who wants extra reprieve or extra money is being scrutinized and may cause severe anxiety to some of these vulnerable people. These never happened in the last 4 decades of me working in Canada. Too much scrutiny of very minor things by CRA

By Zenaida on November 05, 2017

Yes, there are far more audits (sorry - Processing Reviews!) and the agents are getting to be very difficult to deal with. It would help if some of them spoke better English. I agree with Ken; there seems to be a move towards intimidation, and they go after the most vulnerable people, like single parents, year after year. We also have many claims for the Northern Resident’s Deduction, and an audit of every claim is just about guaranteed. I have the impression that the CRA agents are being trained and indoctrinated by the IRS. It used to be possible to have a reasonable and civilized conversation with them but they are now, more often than not, aggressive and unpleasant. Also, documents do seem to get lost and are not received all too frequently, possibly in the hope that the taxpayer will give up, as someone else has suggested. All in all, we are not impressed in this office by our experiences with the CRA over the past few years. They seem to be going downhill and will not improve while we have a “tax and destroy” government that is looking to squeeze every penny possible from the taxpayer by whatever means.

By Mitzi-Lynne Morgan on November 02, 2017

I am noticing a lot more reviews regarding Line 256 and 431.  Also before the foreign documents with a simple translation of the pertinent information was acceptable and now they are requesting fully notarized translations.  This is the first year ever that I have had Reviews denying the deductions. Then again this is the first year that our Reviews are going mostly to Sudbury instead of Newfoundland where they have been dealing with the German taxation since 2010.  CRA is definitely making a lot more work and aggravation for the compliant taxpayers and tax preparers.

By Siegfried Merten on November 01, 2017

Not more reviewing of regular taxpayers, but harassing the same clients year after year for Foreign Tax Credits or child claims.  Also some reviews of minor claims.

By Virginia on November 01, 2017

Yes reviews have increased significantly over the last couple of years, I think this is a good thing…It will educate taxpayers that they must have and keep the necessary receipts and records in order to be eligible for the claims they make. Should also help reduce the amount of fraud in filings.

By Johnathan on November 01, 2017

I have been doing taxes for 30 years and can certainly agree with all the above… an incredible increase for requests and for the most rediculous things ... looking for receipts for a small amount, or the opposite ... for one client asked for ALL charity, business expenses, employment expenses, medical exp. and tuition receipts.  Had to resubmit some twice again one because they said they didn’t get the T2200 (IT WAS included but the purposely lost it so they can reject the expenses).
I find more and more they are rejecting allowable expenses or SOMEHOW loosing the forms we send in because they think people will not bother resubmitting .  The can justify the staff they need because of all the money they are raking in from unfairly holding back on refunds.  They no longer care for the interest of the clients but for how good their department looks.

By Kathy Johnson on November 01, 2017

Every year we get more and more letters to clients requesting copies of receipts our clients.

By Bob K on November 01, 2017

Whoever answered NO, has no idea.
We are seeing reviews of $500 of foreign income, re[ported on T5s.
T5s are submitted to CRA, so they already have this information.
Line 221 - carrying charges and interest expense are also being tightly scrutinized.

By andrew on November 01, 2017

Overwhelming

By Burns on November 01, 2017

For 2015 and 2016, CRA has been questioning amounts claimed as income and deductions, which they already have on file. It seems they have taken on a policy of intimidation rather than verification. On one occasion, they would not accept a translation provided by a Company issuing an income slip, they required the taxpayer to get a Certified translation, meaning a $300.00 bill, to prove the Company was not lying. They are harassing individuals in nursing homes, even though the claims have been reviewed and substantiated, along with the disability tax credit , in previous years. We have clients that have not been assessed their 2016 T1 as of yet. The all mighty tax man can take as much time as it wants, however the taxpayer has 30 days maximum to answer any question the tax man wants answered. It is about time some of these tax ” supervisors” get knocked off their ivory perches, and go after the true tax cheats, protected and aided by CA firms, who themselves are exempt from CRA regulations. CRA has proven that already, with fraudulent tax schemes instigated by international CA firms. One client missed a $32.00 T3 and was penalized, large CA firms are told not to get caught again !!!!! Big money talks, and the poor middle classes, and below, are forced to bend over backwards to prove an ongoing claim. Government services, i.e. CRA, are definitely not transparent, and they will continue to disrespect the average taxpayer, as they are afraid of the actual tax cheats, and have no appetite to prove they no more about the Income Tax Act, than the sham artists.
I guess the question should distinguish between an audit and harassment.

By Ken on November 01, 2017

In our location we prepare 3000 personal and 150 corporate returns a year. We have been in tax preparation business for twenty years. Two years ago, we had one deep audit of one client.  This past year we have had 4 deep payroll/HST audits and six proprietorship audits.  In addition the amount of errors in level one pre and post assessments due to consolidation of tax centers is through the roof requiring excessive amounts of objections and tax court filings.

By Gerry Campbell on November 01, 2017