Canadians who file their personal income taxes incorrectly after getting inaccurate information from the Canada Revenue Agency (CRA) have no legal recourse, says a tax lawyer.
After placing calls to the CRA’s contact centres over four months between February and May of this year, Auditor General Karen Hogan’s office reported that CRA staff answered just 17% of the tax questions accurately.
Her office’s report, released Tuesday, said the CRA seems more concerned with adhering to schedules for shifts and breaks than with the “accuracy and completeness of information they provided to callers.”
Lawyer David Rotfleisch says that under the Income Tax Act, Canadians are responsible for filing accurate tax returns and they “cannot and should not” rely on the CRA’s general information line, which he says is “notoriously wrong.”
Rotfleisch says taxpayers can appeal any interest or fees resulting from filing in error due to bad advice from the CRA, but they won’t be hit with gross negligence penalties. (Gross negligence penalties apply when a taxpayer knowingly, or, per case law, in a manner “tantamount to intentional acting,” makes a false statement or omission in their tax return, adding 50% to the amount of tax owing.)
Franco Terrazzano, federal director of the Canadian Taxpayers Federation, says the CRA’s performance is “horrendous” and that the government needs to simplify the tax code because “nobody understands the impossibly complicated rules.”
On Sept. 2, Finance Minister François-Philippe Champagne set a 100-day timeline for the CRA to address call centre delays, with a deadline of Dec. 11.
In a release on Wednesday, the Office of the Taxpayers’ Ombudsperson said it was concerned about the CRA’s ability to maintain improvements and to meet taxpayer expectations for service beyond the 100 days — and as tax season begins.
“With some processing delays far exceeding the CRA’s usual service standards, it is unlikely that the CRA will reduce the backlog to a sustainable level by the end of the 100-day period,” the release said. “A longer-term commitment and adequate resources will be necessary.”
The Office of the Taxpayers’ Ombudsperson said it will “encourage additional, tangible service improvements at the CRA.”