Tax Pros Endorse Paper-Filing Tax ReturnsPosted: February 05, 2019
Posted in: Strategic Thinking, tax preparation, tax returns, poll results, income tax act, efiling, Netfile, paper-filing
Between February 12, 2018 and January 6, 2019, only 13.1% of all tax returns (totaling 3.9 million) were paper-filed. With the vast majority of Canadians now filing electronically, we asked Knowledge Bureau Report readers whether paper-filing should be continued. A resounding 89% of respondents said “yes.” Here’s why:
The general consensus was that moving towards electronic filing options exclusively could be positive – but only if the CRA improves filing processes and service standards first. Here are some of the comments that shed light on why the majority of tax and financial pros want the option of paper-filing tax returns continued – at least for now:
Connie identified the taxpayer profiles that need paper-filing options: “Paper returns are necessary for first-time filers, final-returns filers, the older generation who are traditional and less technically savvy, those in remote geographical areas where internet may not be available locally, and when filing dual income tax statements for CRA and IRS.”
Picki mentioned concerns about data privacy, based on the current lack of technology at the CRA: “Yes, we should keep the paper option as long as the CRA does not provide a direct link to file taxes electronically. Why should anyone hand such information to a third party tax software provider in these times when hacking is a common practice? Why should anyone be forced to pay for a tax-filing software, paying for paying taxes? Isn’t it enough that we pay our taxes? Sending paper by mail is still cheaper and safer, or even dropping my returns personally at the CRA. Keep all the traditional options on the table and let’s hope that tax returns will not be privatized.”
Mike weighed in, agreeing that paper-filing is necessary, as long as it’s the only free filing option: “Absolutely, not everyone has internet or knows how to use a computer to fill out their income tax or how to use the internet to file. I’m sure this would account for a very large number of people. It shouldn’t cost anyone to file a tax return, which it might if people have to go somewhere to get their tax return filled out and submitted online. It really doesn’t matter how many people file paper returns; as long as there is one, it should remain available unless the CRA is willing to provide someone to do their tax return at no charge.”
Martin outlined a complicated circumstance that is simplified by paper-filing: “Paper returns should remain an option. Many seniors do not have great computer skills. Some do not have computers or the internet. Most simple returns may be done electronically, especially by younger people who grew up using computers. Then there are the more complicated returns. One example: a person, an individual, who has to file both a Canadian and U.S. return, and is required to send in one page of the return on paper. That one page and a copy of the U.S. return have to be sent in on paper. So, why not send the whole Canadian return in on paper, and one does not have to hope that CRA can find both the electronic and paper parts and match them up. There are always a few exceptions that make more sense on paper.”
Vincent agreed, and provided additional examples: “As requests are being made in September for tax receipts/charitable giving receipts and medical receipts, this is onerous on the tax filer. This leaves room for error and more than one step on filing returns. I work with retirees and also do a fair amount of charitable giving myself and am requested every fall for these receipts. Many of my clients, especially for medical expenses and charitable gifting receipts, have to send in information. I would rather recommend everyone with these types of situations send in one filing and save issues and more steps for everyone involved, including CRA.”
Maria pointed out how the CRA doesn’t offer an electronic service that allows taxpayers to provide documents that support their deductions, or submit additional documentation requested by the CRA: “Absolutely! First of all, not all taxpayers have secured internet. Some people like to attach proof for their deductions so that the government will not hassle them months, or even years, later, adding penalties and interests; and lastly, it is a burden off their back.”
Gary outlined his challenges with filing electronically, which speak to CRA service standards: “I have tried the electronic procedure but every time I have a question I can’t get anyone to solve the problem, so just do it manually. Will probably try the electronic version again this year but don’t expect much help again.”
E. Pearse put in a final word, stating why paper-filing is necessary even for tax pros: “Paper is essential. My clients are 95% over 80 years of age—and I keep getting more of them, because others won’t take this sort of person. They often require extra time, patience and extra guidance/explanations. Many of these people do not want e-filed returns, and insist on paper—not only for their copy, but to be submitted as well. As a person who specializes in dealing with the elderly and/or handicapped, I have absolutely no trouble obliging this desire. I do not charge extra for it, and it has never been rejected. Eventually attrition will remove the remaining paper filers, but until then, paper must remain an option. In fact, I’m only in my fifties, and I also always paper-file my own return. Experience has shown me that paper-filed returns, with all documents attached, have a consistently better track record for not being questioned, reviewed or otherwise causing a snag. One of the major problems with e-filing (or NetFile for those who do their own taxes) is the lack of supporting documents immediately alongside the tax return submission. Until such time as the governments allow submission of PDF copies of all paperwork (other than what is in their own records), WITH the form, online, the system has a major flaw. So, yes, not only should paper remain, but there should be no penalty to preparers who use it. Pointe finale.”
Thanks to everyone who participated in our January poll! Our poll question for February asks: “Last tax season, the average tax refund was $1,765. Should tax withholdings be reduced to help Canadians with debt and savings?” Weigh in today!
Additional educational resources: Enhance your knowledge in preparation for the upcoming tax season, and get your credentials as a DFA – Tax Services Specialist. Until February 8, you can purchase a copy of the Knowledge Journal that attendees received at the CE Summits for $395, including taxes and shipping! This comprehensive resource contains an incredibly valuable 355 pages of information to help you navigate through the 2018 tax year and beyond! Call 1-866-953-4769 to order!
The next CE Summit tour takes place in May and June, when you’ll learn post-budget action strategies to apply to your practice.
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