Time to Clean up Canada Revenue Agency Abuses? :CCRA SOTW
Alan Baggett
COLUMN: It's up to the tax office to clean up its abuses
Vancouver Sun
Published: Thursday, November 29, 2007
VANCOUVER - First the auditor-general, then a Commons committee
scolded the Canada Revenue Agency last year for being lax about
collecting the money it is owed.
The implication was that the agency was letting scofflaws off too
easily. And the criticisms clearly stung.
In May 2006, auditor Jamie Hood found a whopping $18 billion in unpaid
assessments, and his boss, auditor-general Sheila Fraser, noted that
slipshod management and poor information on which to base decisions
had not improved in the decade since a previous critical audit.
Two months later, the Commons' Standing Committee on Public Accounts
accused the CRA of responding with mere lip service to the obvious
need to do better.
The agency fired back with a press release just four months later - a
lightning-quick response time for CRA's legendary foot-draggers.
"The Canada Revenue Agency (CRA) today took serious exception to
allegations that it treats some taxpayers unfairly," it thundered. And
it went on to outline its new, hard-nosed policy of fining miscreant
companies that dared to pay their income tax remittances in person at
CRA offices rather than at a bank.
The policy seems to have been intended to address an actual problem -
games played by some large-scale remitters who used cheque-cashing
delays to give themselves the use of the government's money for a few
extra days each year.
But the penalties are huge - 10 per cent of the usually-sizable
remittances. And the policy has proved to be not fair at all - in
fact, to be grossly unfair - because it is misapplied to punish
people, even those who pay early, if they make inconsequential, one-
time mistakes.
The apparent cause-and-effect link between the auditor's scolding and
the CRA's mindlessly inflexible policy has led a number of readers to
speculate that blame for the spate of tax horror stories I've been
telling should be laid, at least in part, at Fraser's door.
Navas Murji, for example, is one of several accountants who wrote to
say he believes a backlash has led to frequent instances of "CRA
taking a hard line on penalties they would have overlooked in the
past."
John Day, also an accountant, noted that former revenue minister
Perrin Beatty's "fairness rule" of 15 years ago had been "largely
gutted" over time.
"And Sheila Fraser ensured that whatever was left of the human face of
CRA was taken away."
So, I thought, why not ask Fraser herself? Is there room in her world
of ledgers and spreadsheets for compassion, common sense, and fair
play?
I never did get through to her in three weeks of trying. But I was
eventually put through to Jamie Hood - the auditor who started it all.
And he dismissed the notion that his audit - or the principle behind
auditing the performance of government departments - is to blame.
Indeed, he said, the examples of what I consider to be taxpayer abuse
tend to underline his concern that CRA managers don't have the
information they need to make good decisions.
I asked specifically about humanitarian concerns, the kind of thing
that was flouted when a physically and mentally frail Vancouver man
lost his entire pension to a garnishee order.
"We would expect CRA managers to have that kind of information [to
make an informed, compassionate decision]," he said. "They don't."
It was the same with pushing potentially viable firms - ones capable
of paying their tax debts if given a little leeway - to the point of
bankruptcy.
"I don't think an auditor would suggest for a moment that the agency
should be putting undue hardship on taxpayers," he said.
So portraying Sheila Fraser and her auditors as scapegoat won't do. To
the extent abuses are taking place - and that's a substantial extent,
judging from my mail on the issue - it's a CRA-made mess. And it's up
to them to clean it up.
***
CRA apparently no longer thinks that at least one of the two women I
wrote about last week is secretly living with her ex-husband and
cheating on her income tax. Naomi Beaupre wrote to me on the weekend
to say she has a vague letter saying CRA will no longer press an
assessment based on even vaguer allegations.
But, "There is no explanation as to why this happened (twice), what
the 'original information available' to them was, or why they once
again believe me when I have provided them with no more information
than has been already provided and has been readily available to them
all along.
"Nor is there any assurance that it will not happen again."
And, as you might guess, there's no apology for putting her through
the wringer on the basis of a nameless accuser's false charge.
© Vancouver Sun
-----------------------------------------------------------------------------------------------------
Miss a Tax Tale Miss a lot!
Click the link for the new, updated and revised CCRA SOTW index!
http://groups.google.com/group/can.taxes/browse_thread/thread/0650fd3969d59a17#
-------------------------------------------------------------------------------------------------------