Poll Results: CRA Should Cut People Some Slack

Given the financial stress people are under during the second wave, should governments suspend audit activities and waive penalties and interest in 2021”? That was last month’s poll question and an overwhelming 75% said yes. However, of those who said no, there were some strong words of disapproval:

 “Absolutely not. People know that they must pay by the deadline or suffer the consequences. Many people have paid their taxes on time and by waiving penalties and interest only encourages the entitlement mentality society has come to expect. This is my opinion.” - Tony

 “They should continue to let people know that they have a debt. It won't make much difference. Far too many people have no intention of ever paying back a government debt anyway. Their attitude is that "the government has more money than I do. They can afford it." The fact that they are basically stealing it from the rest of the tax-paying public doesn't register with them or keep them awake at night.” - Mitzi-Lynne

“Just go easy. Suspending activities and waiving  any penalties/ interest will be used as an excuse  by a lot of people who have no interest n being compliant.” – Enzo Galano

“I suggest the CRA continue to work as usual and waive penalties at the end of the process if deemed appropriate.  Otherwise, I believe there would be too much room for fraud!!” – Ron McPhail

“The media, as is often the case, do not know tax law and are blowing some issues out of proportion to what the issue really is. The various support programs were rolled out with few parameters and some took advantage of that. CRA needs as always to enforce with SOME COMMON SENSE. The common sense part is the tough part for CRA.” – Terry

“Compassion on collections should be applied. However, Fairness Applications can handle whether interest and penalties should be waived.  There is no reason why filing deadlines cannot be met, even if the financial requirements cannot.  If CRA wants to suspend audits, that's up to them, but the clock on the three year window for audit/review should continue to run.” – Alan Rowell

But most people felt the government should be more forgiving.  Here were the highlights from the “yes” crowd:

“The government should definitely use some compassion!  These are unprecedented times.  The fact is that the government should have either withheld tax at the source on these COVID payments or made them a non-taxable income similar to WCB, after all, they were a wage loss benefit.” – Candi Hallstrom

“People are under big stresses in this pandemic wave.  It would be a great relief if the government can waive all penalties and interests for tax years 2019 and 2020.” – Maria Cheng

“We need all the help we can get at this time. Maybe give us a few months to pay our CRA debt in equal payment over a set amount of months without interest penalties. I also feel the credit card companies should bring down the interest percentages. People are not making progress but are going deeper in debt.” – Karen Kasian

“Yes. For now, CRA should take it easy on tax filers. I have been preparing T1s for at least 30 years; I learned that CRA always gets what is legally theirs. Canadian Tax filers are not going anywhere, neither are the tax authority or agency. There's a reason why tax filers can amend/adjust their tax returns 3-10 years back; it gives both parties a chance to make it right, in time.” – Earla Ropel

“Many individuals, small and medium businesses, are holding on by the skin of their teeth, do they really need the headache a government audit?”- Patrick Souliere

“A lot of my clients are financially 'stressed out' from the Ontario lockdowns, and are worried about being audited by the CRA.  Many are unsure if they did anything 'wrong' from applying for and benefitting from the governmental programs and found information provided by our government agencies, about their eligibility for the available programs, confusing As a humanitarian, I believe that the CRA should waive penalties and interest for taxpayers for 2020 and 2021.   This would go a long way in demonstrating that our governments actually care for their constituents.” – Gaetan Ladouceur

“Small unincorporated businesses need the help so badly.” – Gerry Campbell

“Having to deal with audits and paying penalties and interest is something that we can do without at this time. Some of the reviews being done end in no changes at all, but have just increased the stress level of the taxpayer. Errors being made when doing T-4 matching to T-1 returns by the reviewing section cause needless work on both ends. And add to the stress of the taxpayer. Canadians do not need more stress added to their lives at this time.” – Alice Manderson

“Some audits are being processed with positive results for clients. For instance the BC Mining Tax Credit has been an issue.  CRA decided the credit was to be included in income and reassessed 2016 and 17 for some of my clients.  Received a letter for one stating everything I requested was approved.  Not income!

CRA is putting auditors in positions that have no experience...probably nothing new but is delaying so many situations.”  – Pat Morton

“Less pressure for audit and review activities would be great, but it only delays them.  They really need to give more time though.  Expecting a response 30 days from the date of the letter, at this time, is completely unreasonable.  Give us more time to respond, ease the penalties and interest, and focus the audits and reviews where they make sense. “ – Jodi

“Yes, because people are under enough stress paying for their essential living expenses such as rent and food etc. with limited resources.  Once the country is back at full working potential then begin charging interest and penalties for late payments.  Hopefully this can begin with the 2021 tax reporting.” – John Frank Bird

“At least for 2019 and 2020 returns CRA should skip the penalty and reduce the interest rate.” Marion Menzies

“Auditing may be hard when resumed later, but it is hard now to get any missing documents such as moving company receipts, since company workers are at home, and the enforced change from Windows 7 may make things harder to access.  Waiving penalties and interest may not help much if people are in such bad shape they have no tax to pay.”  – Virginia Hoover

“Many banks are waiving penalties on mortgages and loans at this time.  That does not mean that interest is being waived as well.  Why shouldn't the government do the same? Suspending audit activity does not mean the government can't resume it at a future date.”– Rosalind Kemp Gleave

“Many people are struggling to keep their heads above water at this time so penalties and/or interest charges are sometimes more than they can handle.  If the government is trying to help people, they would do this.  They will eventually get any taxes owed to them anyway (for the most part), so they do not lose much by being more compassionate.” – Robert Litschel

“Suspend audit activities for now, however only waive penalties & interest for those who have been financially impacted by COVID-19. No audit induced penalties or interest should ever be waived as a result of an audit in which fraud is determined.” – Amanda Zais

“Everyone is being hit hard this year, all Business's are trying their utmost ability to stay afloat. Their only hope is to have less pressure on bills ,interest ,audit procedures at least until we are back to some what normalcy.” – Susan Mackie

We thank the 550 people who responded to this poll representing tax, accounting, bookkeeping and financial advisors from across Canada.  Please weigh in again for our February poll: “It’s RRSP Season.  In your opinion, do Canadians feel they have to revise their retirement savings plans as a result of the pandemic?“