Ken Griffin and Marc Vanasse, “Income Tax Objection Process” Canadian Tax Highlights 25:3 (March 2017), summarizes the Auditor General’s report on the CRA objection process. Not surprisingly, the report found the process lacking in a number of ways. Objections take too long. The CRA does not learn effectively from the results of objections. In addition, the CRA does not have any standards for resolving objections in a timely manner.
On the latter point:
CRA response: To achieve the timely resolution of objections, the CRA will adopt the following measures in accordance with an objection’s degree of complexity:
1) Low complexity. A new service standard (to respond to taxpayers within 180 days, 80 percent of the time) will be implemented and publicly reported for the 2017-18 fiscal year.
2) Medium complexity. A measurement will be established by the end of the 2016-17 fiscal year and published in the 2017-18 fiscal year.
3) High complexity. The CRA will continue to monitor these objections. Also, the CRA will continue to look at comparable organizations with a view to improving its own timeliness.
One hopes that these standards won’t result in appeals officers making hasty decisions, to the detriment of taxpayers, simply to get a file off his or her desk and ensure that the “measure” is met.
On the “internal learning” point, the report noted that 65% of objections were resolved fully or partially in favour of taxpayers, which suggests that auditors could do a better job of issuing assessments in the first place.
