RTPP: Not Without Competency Standards

Knowledge Bureau’s February Poll asked tax practitioners whether CRA should implement the Registration of Tax Preparers Program (RTPP) to track and address recurring errors in professional tax preparation without setting minimum knowledge standards for both auditors and professionals. 

The majority – 55% – said no, but a thoughtful discussion by over 300 respondents spoke to the need for higher standards for both the industry and CRA.  

On the "no" side, the following comments stood out:

From Alex: “Once CRA upgrades its own performance then I would agree. Over the years I have seen and had to deal with some very stupid errors and requests from their end. Canada’s income tax system (described by some as “Byzantine”) could also use a major overhaul to simplify it and make it more efficient. Also, to receive a slap for missing T-slips, usually the fault of the issuer, is a major injustice for both client and preparer.”

Dan noted: “As an independent tax practitioner to individuals and small-to-medium businesses, charities and others over the past forty years, and as an ex-CRA auditor in my “early days”, I’ve seen a LOT of tax returns.

I see little difference, frankly, in those prepared by designated accountants and those not. One of CRA’s reasons and their stated “error rates” seem to derive mostly from missed slips (matching program) which is generally not the preparer’s fault or responsibility.

On the other hand, the error rate and the (I’m sorry to say this) carelessness applied by some designated professionals is appalling for the fees paid. I can’t even begin to count the cost of correcting those returns. Given that the various accounting programs focus little on tax, that’s not a surprise.

Overall, I see this as a poor idea, poorly conceived and poorly executed. It’s a “nice idea” that CRA consult with us on this, but those of us who reside outside rural areas might appreciate a phone/webinar style consultation too, not just a write-in opportunity.”

Ron was insightful on standards: “I really believe that standardizing tax prep is a great idea and if this registry does that, great. However, it has to be set with minimum standards of education and experience. Overall there are too many people in Canada calling themselves “accountants” without any credentials to make that claim.”

Allen agrees and zeros in on recent professional organization: “I find it incredible that the three accounting bodies now merging into one . . .have not sought to have exclusivity to the term “accountant”. . .”

For those in favor, Alan makes the following point: “While I’m generally in favour of registration and qualifications, one of the items to remember here is the impact that regulation and compliance may have on the industry, both in time and dollars.  Government intervention in the industry is not something that anyone really wants. Nowhere within the documentation supplied by CRA is mention of competency requirements even though it is the unwritten word throughout the document.

The solution maybe a preemptive strike through public education. For example, if the public is looking for a DFA-Tax Services Specialist, it is up to us to make sure they can find one.”

From Chris: “Tracking errors is a great idea, but not only for preparers but for CRA as well. When the matching program makes a mistake and the client is told to submit a reassessment to undo the CRA error, that cost should be borne by CRA, not the client.”

And Jim: “Having minimum standards for tax preparers preparing tax returns for a fee is desirable. I believe clients would like to know that we didn’t just buy a software package and become tax experts. We are in an industry where people value our knowledge, and we should stay current. As for the auditors, they too should be educated so we don’t have to go through the pain of training them.”

Ross agrees: “Far too many tax preparers quite simply don’t know what they are doing. A weekend tax prep course once a year doesn’t cut it. While not the perfect solution, at least a registry, combined with some form of qualification criteria, is a step in the right direction.”

The last word goes to Julie, who attended the CRA consultation on the matter in Winnipeg. She observed: “It is very hard not to view this new registration programme as a method of turning preparers into compliance enforcers. We will be caught in the middle even more than we are now.

If the goal is really improved compliance by tax preparers, all CRA has to do is simplify the tax system and improve access for both taxpayers and preparers. It might put a few accountants, lawyers, and bureaucrats out of work but there would definitely be better compliance.”

Thank you to all who contributed. Please join us for our March Poll. Knowledge Bureau has declared March Tax Literacy month and we want to know: Should Canadian taxpayers take more responsibility for their tax literacy in order to pay less tax over their lifetimes?