The Nos Have It: CRA Filing a Bad Idea

Beth Graddon

It’s a controversial subject that’s clearly lead to some divided results on our October poll. We asked: “Are government plans to introduce automatic free tax filing for the 12% of adults who don’t file tax returns to get benefits a good idea?” The results are in with 42% saying “yes” and 58% who shared some insightful thoughts and strong opinions with their “no’s”.

The 2020 tax season will be anything but simple for Canadians, but one potentially positive thing has come out of this. It’s led the federal government to reconsider how the tax system can best be simplified for those most affected. The most recent suggestion, presented with the recent throne speech may be missing the mark, however. At least according to more than half of our October Poll participants so far, who just aren’t sure that introducing automatic tax filing through the CRA Is the best approach.

This poll will remain open until the end of the month, so there’s still time to contribute your voice to the discussion!

Here's Why the “No’s” Have It:

“CRA has trouble answering the phone and providing consistent information.  Does anyone really want them preparing tax returns?” – Alan Rowell

“The non-profit organisation runs a year-round free tax clinic through CVITP. It is run by paid employees who receive additional training in tax preparation and access to benefits for low-income tax filers. While I agree in principle that anything allowing low-income individuals and families receive the benefits to which they are entitled is a good thing, I am concerned about taxes being prepared without sufficient information regarding children, rent/ property tax credits, medical expenses, etc. This may result in not receiving credits they are entitled to or, even worse, receiving credits they are not entitled to and having to repay them. CRA is also TERRIBLE at any provincial tax credits outside of Ontario (and sometimes Quebec), so people stand to lose refundable credits like the Manitoba Primary Caregiver Tax Credit.” – Aileen Krush

“Not a good idea as those not filing have their reasons.  Marital Status changes, kids no longer in custody, drugs, medical premiums owing etc.  CRA will not have the personal information and so often when taxpayers see a tax consultant, they have all the delinquent years filed and they have all the required documents filed to clean up their past. CRA will not do that!” – Pat Morton

“Not a good idea, as situations change annually. One who typically may only receive a T5007 each year, might be in a better position to get a job one day, maybe become self-employed. Having their taxes automatically filed would cause confusion in thinking they may not be required to report additional income.  There are also several benefits and tax credits that run the risk of incorrect calculation each year.  It’s a great idea to ensure those who need the assistance are getting benefits they may not be receiving, however investing more resources into free clinics might be the better solution for now until our tax system isn’t so complex.” – Amanda Zais

“Sure, why not.  and maybe while they are at it, CRA employees can replace doctors with medical diagnosis too and maybe fix the transmission in your car too.  CRA employees have no insight into the lives of those taxpayers.  And they don’t seem to care if the correct benefits are paid out or not.  I had a lady who received OAS and CPP survivor benefits, but no CPP of her own - for years- until she came to me and I asked her where her CPP was.  she didn’t know she was entitled even though she had worked for most of her life.  I think we can all recite multiple instances where CRA staff did the taxpayer no good service by the errors and omission CRA staff made.” – Pat Gamberg

“There is information that the government will not have, so the returns will be incomplete. CRA already offers the free tax clinics. These need to be advertised better, offered all year long, and the Government should direct individuals to these clinics rather than filing for them.” – Tami

“Community tax preparation is available in most regions of the country for those unable to do it themselves or pay for the service.  When questions are asked currently of CRA staff, they often result in contradictions and errors that require correction.  Staff hired to perform this task are less likely to make the right determinations, than the regular, full time employees do now.  It seems that this proposal will result in further errors and costs to the public as a whole.” – Marilyn Kenny

 “This is supposed to be a self-assessment system. Each taxpayer is responsible for filing his or her tax returns. If the government meddles, this foundation will be irretrievably broken.”   - Regina Peters

The “Yes’” Made Some Good Points, Too:

“Yes!!! As a volunteer who assists low-income Canadians in tax preparation, I have some knowledge of how much failure to file income tax is costing the most needy and vulnerable of our fellow Canadians.”    – Donna Wuschike

“Why not.  They deserve tax credits the same as everyone else.” – Frank Bird

“CRA in “My Account” seems to have all the information they need to determine a tax position and likely benefits they would be eligible for. For lower income Canadians up to a certain income level it is probably a good idea.  There would need to be some checks and balances to ensure individuals have not left the country, are deceased, etc.” – Donald Bieber

“Yes, if they aren’t going to teach about taxes in school then they should file taxes automatically ESPECIALLY as they have all the info anyways.  I can’t believe people would begrudge the poor and elderly benefits because of “this is supposed to be a self-assessment system”.  Why does it matter to you? Obviously, it’s not for everyone but for some people it’s an improvement and so it’s a good thing.” – Kenneth Dreger

 “Assuming there is a fundamental reason why certain individuals aren’t filing (living in remote locations, mental illness, old age), I can’t see offering free tax sessions to entice these individuals to seek it out.  On the one hand if those who have very simple returns are able to have their returns filed and thus receive benefits they would have otherwise been entitled to then I’m in agreement.  At the end of the day, if we assume it’s Canada’s most vulnerable who benefit then we should do it, at least as a trial.” – Laura Thompson

Additional educational resources: Help Canadians remain audit-proof and access the benefits and credits they need. Train your team and enhance your own credentials as a DFA-Tax Services Specialist™.