New! The Knowledge Bureau Network: Getting the Right Outcomes

From the Desk of Evelyn Jacks, President, Knowledge Bureau

Hello and Happy New Year! Welcome to a new column, which I am excited to share with you.  The purpose is to think about the practical applications arising from tax and economic issues of the day and what impact they have on the lives of your clients.  Today, my musing are about Getting the Right Outcomes.

It all started with a Facebook post, but then drifted into something a bit more profound. Have you ever thought about how tax-aware different members of society must be  in order to get your clients’ relationship right with CRA?  It’s a big expectation and it may well be unreasonable under the current circumstances.  Here’s the story:

Social media posts can be amusing, distracting,  and occasionally thought-provoking.  This morning one of them caught my attention, as we put the finishing touches on a complex project, the annual Advanced T1 Update for CE Summit being held January 19.  It read: 

“Teachers don’t teach for the income. Teacher Teach for the Outcome.”

How true! It’s exactly that passion that motivates all of us at Knowledge Bureau to work the late nights to get it all done for you, and this year has been especially challenging. Consider:

• The federal tax return itself, including the T1, the schedules and the accompanying worksheet are well over 40 pages long.
• Then there are multiple-page provincial forms and instructions to know to find out what is new.
• It doesn’t stop there.The auxiliary forms – and there are many of them – provide detailed instructions and they are a big job to get through.Professionals know of many great examples: Form T1206 Tax on Split Income, T1M Moving Expenses or form T778 Child Care Expenses and certainly one of the most commonly missed, the T2201 Disability.

  It’s a lot to know.  But it is the Disability Tax Credit form, that caused me to pause and reflect. For 2021 tax filings, eligibility for the tax credit contains a host of new afflictions.  Yet none of this new information yet appears on the current form, a 16-page endeavor. 

  Twelve of those pages must be completed by often-overwhelmed medical professionals, made worse, given the rage of the pandemic these days.  Either a medical doctor or nurse practitioner who can complete any of the sections;  specialists like Optometrists or Occupational Speech Language therapists need to complete the form based on those specific afflictions.

  CRA suggests that Form T2201 should be completed in advance of filing a tax return in order for the client to mitigate delays in receiving the large refund associated with this provision. 

  But, how reasonable is it to expect these very busy, front-line medical professionals to have the time to complete this lengthy form correctly, let alone take the time to learn the new rules and then apply them retroactively to conditions that began in 2021?  It is a tall order. It takes a special kind of passion and commitment to find the time to do that. 

  From a client’s perspective, it can also require a fee to get the job done (this, by the way, qualifies for a medical expense tax credit, so it’s important to get and keep receipts for the costs), plus a visit to a medical office which may not be ideal, as omicron rages.

  The fact that most of this work can now be done digitally, including the completion of the form by medical practitioners – seems like a better option . However, the devil is in the details: the digital information will not be stored for example, so it’s important for the medical practitioner not to make mistakes in completing the form and communicate the outcomes to the client. 

  But there is another wrinkle:  if your client has any of the new qualifying conditions – certain mental health conditions for example – it is quite possible additional details that may not appear on the current form may be required.  A post-assessment audit or adjustment may be required.

  Complying with tax law that is this onerous – whether you are a medical practitioner, a tax or financial advisor or the taxpayer – is a big burden, especially when it’s something you do only once a year.  Could there be a better way?

  What’s Your Take?  Teaching tax law and its applications is all about the right outcomes, and we are proud to do this with you.  Your role in the community may well be to do more of it, too, in order to help your clients and other non-financial professionals, to get tax compliance right.  What’s your take on the matter?