From: AlanBaggett@volcanomail.com   
      
   Auditor general says Canada Revenue Agency takes too long to respond to tax   
   complaints — and it’s costing us  :CRA SOTW    
      
   Jason Fekete, Ottawa Citizen    
      
   OTTAWA – The Canada Revenue Agency is taking far too long to process   
   billions of dollars worth of income-tax objections – ranging from several   
   months to more than a decade – as the increase in grievances dramatically   
   outpaces staff available to    
   review them, says the federal auditor general.   
      
   In his fall 2016 report released Tuesday, Auditor General Michael Ferguson   
   concludes the Canada Revenue Agency is failing to deal with income tax   
   objections from hundreds of thousands of Canadians in a timely manner and that   
   taxpayers are never told how    
   long it will take to make a decision on their file.   
      
   All Canadians, through the CRA’s Taxpayer Bill of Rights, have a right to an   
   impartial and timely review of their tax return. The delays are costing   
   taxpayers significant sums of money, as they have to pay interest on the   
   amounts in dispute.   
      
   The auditor general’s report says that over the past five fiscal years, 65   
   per cent of the income tax objections accepted and processed by the CRA were   
   decided in favour of the taxpayers for either all or part of the disputed   
   amounts – which may    
   signal inconsistencies in how tax grievances are resolved.   
      
   As well, the CRA’s own performance results are flawed. What the agency has   
   been reporting as the time to process a tax objection has been shorter than   
   the length of time taxpayers have actually been waiting, because the CRA   
   excluded certain steps in    
   how it measures its own performance.   
      
   “In an age of instant communications, Canadians expect quick results, while   
   governments are often stuck using old, slow approaches that fail to meet   
   expectations,” Ferguson says in his report.   
      
   “The (CRA) does not consider timeliness from the point of view of the   
   taxpayer. For example, the Agency does not count the days when a file is not   
   yet assigned to an appeals officer, and it does not report on the overall time   
   that taxpayers spend    
   waiting for a decision. Objectors are never told how long they can expect to   
   wait for a decision from the Agency.”   
      
   The Canada Revenue Agency has accepted eight recommendations from the auditor   
   general and is vowing to improve how it processes taxpayer objections,   
   measures results, and communicates with Canadians on the files.   
      
   Over the past 10 fiscal years, the number of outstanding income tax objections   
   increased 171 per cent (from 63,384 to 171,744), but the number of employees   
   dedicated to resolving the tax complaints increased only 14 per cent, from 998   
   to 1,138.   
      
   During that time, the amount of federal tax dollars in dispute tripled to $18   
   billion in 2015-16 from about $6 billion a decade earlier.   
      
   “We found that this large increase in the number of outstanding objections   
   challenged the Agency’s ability to process the objections in a timely   
   manner,” the report says.   
      
   Objectors are never told how long they can expect to wait for a decision from   
   the Agency   
   Between the 2011-12 and 2015-16 fiscal years, it took the CRA, on average, 150   
   days just to assign an objection to an appeals officer after the taxpayer had   
   mailed the notice.   
      
   Over those five fiscal years, the CRA took, on average, 143 days to resolve   
   “low-complexity” objections from the time they were filed by taxpayers.   
   Low complexity cases accounted for about 60 per cent of the income-tax   
   objections.   
      
   It took, on average, 431 days for medium-complexity objections (about 37 per   
   cent of cases) and 896 days for high-complexity objections (about two per cent   
   of objections), the report says.   
      
   On files that required technical assistance and needed to be referred to other   
   areas of the CRA (about six per cent of objections reviewed), appeals officers   
   waited months or years just to get a response to their referral.   
      
   Among all of the resolved files, approximately 79,000 objections took the CRA   
   five or more years to decide, worth about $3.8 billion worth of taxes in   
   dispute. Of those, 7,800 objections took the agency 10 or more years to   
   resolve.   
      
   Most of the 79,000 objections that were resolved involved potential “tax   
   avoidance groups” that include objections to the same or similar claims, as   
   individuals or corporations try to exploit tax loopholes.   
      
   “In our view, the agency did not meet its mandate to provide a timely review   
   of income tax objections,” the report says.   
      
   As part of its promised changes stemming from the audit, the CRA says it will,   
   by March 2017, start providing more accurate estimates of the time it will   
   take to receive a final response on tax objections.   
      
   The agency says it will also develop a strategy to reduce the backlog of   
   unresolved objections.   
      
   For 2017-18, the CRA says it will implement and publicly report a new service   
   standard for resolving low-complexity objections (the majority of grievances   
   received), with a goal of responding to taxpayers within 180 days, 80 percent   
   of the time.   
      
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