Poll Results:  60% Say Subsidized Tax Returns Not the Answer

In May we asked tax and financial professionals to weigh in on the following question: “Do you think that the government should subsidize tax return filing fees so people can get more accurate results and benefits for free?” The verdict is in and 60% of tax and financial advisors who participated answered “no”.  They share why in their insightful comments and offer alternative solutions that recognize it’s a system that requires reformation to help more low-income and vulnerable Canadians access their benefits.

Thank you to all who participate in our May poll, this month we invite you to weigh in on the following: “Careers in tax, accounting and financial services are tremendously rewarding. Have you been able to attract and engage new entrants?”

Now check out the comments:

No subsidizing of tax returns!  Yes, tax preparers should provide seniors & students with reduced rates when preparing their tax returns.  CRA should NOT prepare tax returns for anyone.  No ifs, ands, or buts.  Their track record is horrid.  Anyone who uses them, or pays nothing for a tax return, gets what they pay for.  Nothing (or probably wrong).  Also, what’s with not having some personal responsibility?  We are all/mostly such entitled people.

By Sandra Clark on June 01, 2023

Do not subsidize tax preparers.

In the past year or so I have offered to help about 5 members of my extended family catch up on 6 or 7 years of unfiled tax returns. They are happy when they get refunds. I never asked them for payment because they are family. I will keep doing their returns. I can file the returns late without penalty since they seem to only get refunds.

I also have family who live in the UK where it seems hardly anybody files tax returns. I think the UK has a better tax filing system than we do.

Most employees working in the UK pay all their tax through the PAYE system and are not required to submit a tax return. Some may, however, need to complete a tax return because their tax affairs are complicated in some way, for example by having a source of untaxed income, in addition to employment income.

By Terry on May 31, 2023

As a citizen or resident you have the responsibility to submit your tax return.  We seem to continually be chipping away at the principle of personal responsibility.  Nothing is free in this world.  If you find something that is free, it is generally worth what you paid for it.

By Clint Wormsbecker on May 25, 2023

No, CRA should not subsidize tax preparation for individuals as it would produce even more false claims. They are to file in order to get benefits and rebates, not to be credited further.
If anything, CRA should subsidize professional preparers so we can keep educating ourselves, and continue adjusting past incorrect returns prepared by non-educated and/or dishonest individuals.
We also represent our clients in disputing CRA errors, which the CRA employee got paid for.

By Val Nesland on May 24, 2023

I feel the tax return filing fee should be a deductible expense.

By Pat Morton on May 24, 2023

What should be happening is that Tax Planning and Tax Preparation fees should be Tax Deductible, in full, regardless.

Canada runs a self-assessing tax system.  If the taxpayer is responsible, the Government should not be subsidizing and potentially “controlling” how or where individuals choose to have their taxes prepared, nor should they be in the “we’ll do it for you business”.  I can hear it now ... we’re subsidizing the fees so we can download more of our jobs on you!

By ALAN ROWELL on May 24, 2023

Doing taxes for over 30 years, I use to prepare senior taxes for free as I wanted them to get the best results they could. However, over the years the price of running a business has increased drastically. So I still do students and seniors at a discounted rate, and I personally feel anyone who is in the tax field should pay it forward and do them at a discount as well, that way we all know for sure that students, seniors and the disabled are getting their taxes completed maybe not for free, but not for regular prices and by a professional.

By SUSAN Y MACKIE on May 17, 2023

As many have commented already, free clinics have a poor record of correctly preparing returns.  The concept of preparing any tax return (simple or complex) requires a seasoned and well trained tax preparer.  Similarly, may errors are made by CRA agents that require either a T1Adj or Objection to resolve.
CRA should crack down on net and e-filers who have bad records of returns requiring T1Adj’s.
Having CRA process tax returns on behalf of clients is fraught with issues.  One only needs to look at CRA history with arbitrarily processed returns, yes they force taxpayers to file, only in most cases to have a refund.  Just imagine what will happen if CRA processes tax returns automatically.
Would providing a subsidy to tax preparers help, maybe.  But unless CRA cleans up who can file, it will be a large make work situation for an agency who is unable to process changes on time.
It would be more effective tax action to expand the income slip program to include proof of all supplier payments similar to 1099 program in the US.

By Gerald Ian Campbell on May 17, 2023

Definitely there are way too many free clinics who have no idea how to prepare taxes they learned many years ago how to? They  do taxes and have not updated their knowledge as to the new issues thus have no clue CRA said 90% if the errors are made by free clinics so why allow it   subsidies would be far less costly for CRA and the returns would be done by professionals  BUT only give those who have a good record of very few errors the subsidies.

By WAYNE MCCARTNEY on May 11, 2023

Do you think that the government should subsidize tax return filing fees so people can get more accurate results and benefits for free? I agree that reasonable fees charged for preparing the tax return should be deductible even without investment income however I don’t agree with this part of the statement “so people can get more accurate results and benefits for free?” that should be handled appropriately by any tax preparer automatically. Not only when fees are deductible.

By Exact Tax Service on May 10, 2023

Based on more than 40 years of tax prep this is what I would do. Simplify the tax system. Double or triple penalties for failing to report income. Charge fees or taxpayers who file more than a year late (who do not have a legitimate reason.) Reduce taxes on employment income by implementing a 25% employment expense deduction on T4 incomes under $100,000. (maximum credit at 25% of $100,000.00) This would provide a financial incentive to enter the workforce and stay in workforce. For T4 earners trying to move up from $40K per year to about 75K is like climbing a ladder in quicksand.  By the way, no refund or credit for tax prep fees.

By Bill Johnson on May 10, 2023

I think we need to be responsible for ourselves.

By Mare on May 10, 2023

The public tends to be poorly served by some “tax professionals”. Even if the government subsidized this return, would the client have been better served? I don’t think so. We really need two solutions: a simpler tax return and better trained tax preparers (and managers). I’d much rather see the government focusing on these two areas, rather than subsidizing questionable returns.

By Michael on May 03, 2023

This is a great question and a tough one!
Who would qualify for a free tax service? There are very few returns that are just a basic tax prep now; they come in different shape and sizes!  And in my filing tax years since 2008 I come across more and more taxpayers that need a better more qualified tax service than a free service!
Filing a tax return and having a professional trained in tax preparation will make sure the information from Autofill is enter in and downloaded properly on the tax return, the return is reviewed and communicated to the tax payer!  Offering a free service opens a whole new can of worms with many questions, of who, how, and when? 

By Ann Laurin on May 03, 2023

Provided the “freebie” would be actually a payment to the tax preparer rather than the government trying to file the tax returns themselves. I had a client for whom the CRA filed his taxes for years.  When he came to me, we found he had been filed incorrectly all that time and I literally got him thousands of dollars of refunds that were owed to him.  I like the previous comment that people should pay a little for their own tax returns.  We already have a society full of “entitled” persons that think everyone owes them for every little thing they do or want.  You should have to pay something to get your benefits.

By Robert A Litschel on May 03, 2023

If anything, we need an overhaul of the taxation system and forms to simplify things.  My father said (in the 1970s / 1980s) that he could design a one page T1.  That may very well have been an oversimplification, but the logic stands.  Make it easier for people to file by simplifying things, not by adding another layer of public employees for us to pay.

By Derek T on May 03, 2023

It is important that individuals understand that there are costs related to their ability to live in our country.  Providing tax prepartation for free sends the wrong message to those who have to pay for the service.  Let taxpayers pay for their filing to receive Benefits.
Studies in other countries that have provided taxes for their citizens have shown a very high error rate in favour of the state over the individual.

By Gerald Ian Campbell on May 03, 2023

I would prefer this approach over automatic filing.
No matter how low a person’s income is, the right questions need to be asked to encompass changes in a person’s life.

By Sandra Gibbs on May 03, 2023