The federal government is proposing to eliminate written signatures on a number of key tax forms and to allow the Canada Revenue Agency (CRA) to automatically issue electronic copies of the notice of assessment when returns are filed electronically.
These as well as other tax administration measures proposed in the federal budget tabled on Monday are meant “to improve the CRA’s ability to operate digitally, resulting in faster, more convenient and accurate service, while also enhancing security,” the government indicated.
The federal government proposed to eliminate the requirement that signatures be in writing on these forms:
- T183, Information Return for Electronic Filing of an Individual’s Income Tax and Benefit Return;
- T2200, Declaration of Conditions of Employment;
- T183CORP, Information Return for Corporations Filing Electronically;
- RC71, Statement of Discounting Transaction; and
- RC72, Notice of the Actual Amount of the Refund of Tax.
Allowing electronic signatures for commonly used tax forms such as the T183 and the T2200 would be helpful to taxpayers, tax preparers and businesses, said Jamie Golombek, managing director of tax and estate planning for CIBC Private Wealth Management.
“Given Covid-19 and physical distancing [directives], it’s just not practical to require a physical signature,” Golombek said.
The government is also proposing to allow the CRA to send notices of assessment electronically — without having to secure a taxpayer’s authorization — to individuals who file their income tax return electronically and to those whose tax preparers file electronically on their behalf. Taxpayers who file a return in paper format would still be sent a hard copy of the notice of assessment.
The CRA would also switch its default method of correspondence for businesses that use the CRA’s My Business Account service to electronic, though businesses could still choose to receive paper correspondence, the buget said.
The proposed measures need to be passed in legislation before coming into force.
The government also proposed amending the Income Tax Regulations to allow issuers of T4A (Statement of Pension, Retirement, Annuity and Other Income) and T5 (Statement of Investment Income) information returns to provide the documents electronically without having to also issue a paper copy. Issuers wouldn’t require the taxpayer’s authorization to switch to electronic documents only. This measure would apply to information returns sent after 2021.
The federal government did not address the issue of automatic tax filing in Budget 2021. In its speech from the throne in September, the government indicated it would “work to introduce free, automatic tax filing for simple returns to ensure citizens receive the benefits they need.”