Today the federal government’s “Fiscal Snapshot” provided insight into the costs of the Emergency Pandemic Benefits designed to provide financial relief to individuals and businesses struggling during these tough times. One of them was the extension of personal income tax filing deadlines, and the waived T1 late filing penalties until September 1, despite maintaining a formal deadline of June 1. What did tax pros think about this when we asked them in our June poll?
The answer wasn’t unanimous with 77% voting “yes” and 23% saying “no”. Here’s why:
“Yes, but it would have been a lot easier if they had simply extended the filing deadline to September 1. Keeping the filing deadline at June 1, but with no penalties assessed if you miss it and no payment of taxes required, has caused widespread confusion.” - Peter
“It gives business and those that support business the ability to ‘regroup and somewhat recover’ after this horrendous shock to the system, which allows for the systems to be operating in a flowing and effective manner as much as possible. Governments were also not ‘operational to capacity’ so to impose the existing deadlines for taxes and payments would have created a new chaos. Consideration also has to be given to the ‘added benefits offered’ and how these new processes affect the flow.” - Jacquie Johnston
“Absolutely! Penalties should be waived for 2019 as well. I spent so much time in March and April dealing with COVID income support questions that it put everything very behind. There was no way we could even meet the June 1 deadline. Also, most clients are paranoid about leaving home and most seniors are not internet savvy to deal with this electronically. Clients (both personal and corporate) for the most part very overwhelmed and confused.” - Geri Clark
“I was certainly grateful for the extra time. I am still working on some self-employed returns, but they have refunds, so I am not too concerned. With the isolation this year, there is a huge time gap between the client contacting me with the tax info, me preparing the return and sending it back to them for perusal, them going over it and sending me back their approval and on and on and on. Sure takes a lot longer than usual. CRA takes their own sweet time doing reviews, so I think we should get a little extra time too. After all, we used to have nearly 3 months starting in early February, now we have just a hair over two months.” - Pat Gamborg
“Absolutely not. Waiving penalties only results in procrastination and, at least in Ontario, Tax Services were an essential service. We quickly adapted to electronic services to meet recommended guidelines and continued to be able to serve out clients. For those who encountered difficulty or inability to file by June 1st there already is a Taxpayer Relief program that deals with exactly that. Blanket deferral was not the correct solution.” - Alan Rowell
“Given the way the Income Tax Act is worded, they didn’t really have a choice as late filing penalties are calculated based on the balance owing as at the filing due date. With the payment due date being September 1 and the filing due date being June 1, there is technically no balance owing as at the filing due date. However, it is nice to seem acknowledge this fact, if somewhat late.” - Alex
“People have had other things on their minds other than filing their income taxes.” - Bob Kelley
“It was nice to see that the government extended the payment till Sept 1, but it took them some time to come to this conclusion. However, for many business with NO revenues and paying their HST, Source Deductions, etc this may present a challenge and a longer deadline should have been suggested” – Joe Truscott
“Agreed, we were not nearly as effective with the office closed to clients; many clients were not ready to file by June 1; many were working from home and home schooling and taxes are their last priority. But we have been calling with reminders because we don’t want to be working 7 days a week in August! The self-employed June 15 deadline should have been moved to June 30 to give us extra time to complete those who will not pay in full by Sept 1.” - Anni Markmann
“Absolutely! CPA here. We spent so much time in March and April dealing with COVID income support questions that it put us very behind. There was no way we could even meet the June 1 deadline. Also some clients were delayed in bringing us their records because they were scared to leave home. Not everyone is able to send their records remotely. When we hit the June 1 mark, we were still working on personal returns that were received in March. Moving the penalty mark out to September 1, not only helps those taxpayers who are short of cash, it also helps the tax preparers get their work done by a reasonable deadline. The last thing we needed was clients being angry at us for not getting it done by June 1, which would have been an impossible task. Now we can go down to 6 days a week instead of 7…. maybe someday back down to 5!” - Catharine Williams
“I think penalties and interest should be waived for the whole 2020 tax year. I do agree with the government trying to have taxpayers file their tax returns as soon as possible so that the entitlements are not lost or overpaid. However, even tax preparation firms can only handle a client at a time which slows processing down considerably. I think the stats are that most Canadians have filed their taxes on time.” - Shirley
“Really the late filing penalties should be scrapped entirely this year, encourage refunds to be filed asap, encourage filing by giving no penalty but interest and lower interest or no interest with payment plans, unless they don’t file at all. Fair treatment is going to get a workout this year so make it easier to pay, or bank till next year as this year is probably a bust.” - Clare
“Of course, they would have to do that…there is no one to talk to at CRA if there are questions and as far as I know the income tax companies that do your taxes for you are closed for covid-19 as well.” - John Cavanagh
“I think the reduction in staff in accounting/bookkeeping firms and in a lot of businesses with tax filings due has hampered the ability to meet deadlines. There has also been a shift in priorities such as filing subsidy applications etc on top of the staff reductions.”- Laura L Sellars CERB
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