Auditor General Finds CRA is Too Slow

On June 16, the Auditor General rapped CRA’s knuckles, stating that their response to income tax appeals and objections is too slow. And since 65% of them are settled in favor of the taxpayer, the CRA needs to work harder at finding ways to solve issues before they go the appeals route.

As a result of this review, the Auditor General identified nine recommendations, which were presented to the CRA. The CRA’s response is below in red:

That by September 1, 2017:

• The CRA provide a clear target for the planned reduction of its inventory of outstanding objections over the period of 31 March, 2016, to 31 March, 2018, and report the actual reduction achieved by 30 April, 2018. The CRA will provide a clear target requested and by April 30, 2018, the CRA will issue a report to the Committee confirming the actual reduction achieved.
• The CRA confirm in writing that it has published in its Departmental Results Report its updated performance indicators that take into account the entire time an objection is within the Agency’s control. The CRA is going beyond this recommendation by publishing two services standards, one for low-complexity and a second for medium-complexity objections.

That by April 30, 2018:

• The CRA confirm in writing that it has published a service standard for the resolution of low- and medium-complexity objections on its website, and provided the information on high-complexity objections that is available. The CRA confirmed that as of April 2017, it has established a service standard for low-complexity objections. Mid- to high-complexity objection processing standards will published on the CRA website by April 30, 2018.
• The CRA provide the key results of its review of the objection process, and clearly explain how it has used these results to improve the timely resolution of objections. Using the Lean methodology, the CRA is reviewing the key steps in its objections process and by April 30, 2018, will issue a report to the Committee informing it how the results of these reviews have been, and will be, applied to facilitate the timely resolution of objections.
• The CRA explain the rationale for its definition of the timely resolution of an objection based on the level of complexity, and how this definition compares with that of similar tax administrations in other countries. By April 30, 2018, the CRA will issue a report to the Committee explaining its rationale for determining its current definition of ”timely”.
• The CRA provide a report outlining the controls that it has added to its objections systems and processes, and the detailed instructions that it has provided to officers on data entry to ensure the accuracy of data. This report should also explain how the Agency will regularly monitor the effectiveness of these measures. The CRA will issue a report detailing all efforts to date on improving its data integrity through both systems and procedural changes.
• The CRA provide a report outlining the opportunities to resolve issues before an objection is filed, which the Agency has identified through its review of the reasons for which objections are decided in favour of taxpayers. This report should also explain how the Agency took full advantage of each of these opportunities to improve services to Canadians. As requested, the CRA will issue a report outlining the opportunities for taxpayers to resolve issues before filing an objection and the work that has been done to ensure that these opportunities are being implemented within, and promoted by, the Agency to improve services to Canadians.
• The CRA provide a report outlining the concrete measures that it has implemented to ensure that decisions on objections and appeals are shared within the Agency in such a way that those performing assessments can use that information to improve future assessments. The CRA will issue a report to demonstrate its advancement in the sharing of decisions on objections and appeals within the Agency, and concrete measures it has taken to improve processes for and service to Canadians in light of these results.
• The CRA develop a performance indicator that scientifically measures Canadians’ overall level of satisfaction with its services and customer experience, and report annually the results in its Departmental Results Report. As part of the Departmental Results Framework, the CRA has developed a performance indicator, the Public Perception Index (PPI), which will be publicly reported on in the 2017-18 Departmental Results Report.

To review the full statement from the Auditor General, click here. And to read the full response from the CRA, click here.

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