The government has come under fire this week after Michael Ferguson, the federal auditor general, released his findings following the conclusion of an audit of the Canada Revenue Agency. According to his audit, CRA auditors are taking far too long to resolve issues relating to objections and reassessments. Canadians are having to wait months to hear back from agents after formally objecting to assessments, while appeals officers themselves can be left waiting even longer when they request help from other areas of the agency.
According to the National Post, “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.” This backlog of cases as yet unresolved as of March 31 represents more than $18 billion in federal taxes.
How long are Canadians waiting? The auditor general notes that it takes, on average, 263 days for the CRA to process an objection from an individual taxpayer or a corporation, and on average 1503 days if the case involves a group. Complexity also plays a role: the report notes that it took, on average, 431 days for medium-complexity objections and 896 days for high-complexity objections.
Why is it taking so long? Part of the problem rests with the growing number of cases on the CRA’s plate. Over the past 10 years, the inventory of outstanding cases has grown by 171%. The other problem lies with the fact that although the number of active cases has jumped, the number of employees has climbed by only 14% – not nearly enough individuals have been added to oversee and deal with the increase in cases.
So what does this mean for the average Canadian who has submitted an objection? While interest and penalties will halt while an objection is in process, if the matter is not resolved in your favour, the penalties and interest will be applied retroactively. That is a significant amount of money spent to wait.
If you are currently sitting with a CRA tax debt, are concerned about a CRA tax audit, or are considering filing a notice of objection, call us first. We can help you deal with the stress and the paperwork. Tax Solutions Canada is here for you.