The Taxpayer Bill of Rights was introduced by the Canada Revenue Agency (CRA) in 2007.
The Bill is intended, in the words of the CRA, to “build on the CRA’s values of professionalism, respect, integrity, and cooperation”. Essentially, it should serve to protect the integrity of the tax system, and to protect taxpayers from inappropriate treatment. The idea was that increased accountability and transparency on the part of the CRA would, in turn, ensure greater compliance by taxpayers.
Taxpayer Rights
The Bill sets out 16 rights that all taxpayers have when the CRA is administering the Income Tax Act and when taxpayers are dealing with the CRA. In summary, these rights are as follows:
1) The right to receive entitlements and to pay no more and no less than what is required by law
Taxpayers can expect to receive the benefits, credits, and refunds to which they are entitled to under the law, and to pay no more and no less than the correct amount required under the law.
Taxpayers can speak with the CRA if they do not agree with a tax assessment, credit determination, benefit determination, or any other decision made by the CRA.
Taxpayers can also file for a formal review, and following that, an appeal.
2) The right to service in both official languages
Under the Official Languages Act, taxpayers have the right to communicate with the federal government (including the CRA) at designated bilingual offices.
Taxpayers who were not served in the official language of their choice can let the CRA know. Following an initial discussion, if the taxpayer still feels their concern was not appropriately addressed, they can send a complaint to the CRA Service Complaints Program, and, if necessary, to the Office of the Commissioner of Official Languages.
3) The Right to Privacy and Confidentiality
Taxpayers can expect the CRA to protect and manage the confidentiality of their personal and financial information.
Where a taxpayer believes the confidentiality of their information has been compromised or shared with someone who was not authorized to represent them, the taxpayer should contact the CRA. A complaint can also be filed with the CRA Service Complaints Program, and, if needed, the Office of the Information Commissioner of Canada or the Office of the Privacy Commissioner of Canada.
4) The Right to a Formal Review and Subsequent Appeal
Taxpayers have the right a formal review of their file where they believe they have not received the full amount of what they are entitled to under the law, or if they have not been able to reach an agreement with the CRA.
Before an objection or appeal is filed, taxpayers are encouraged to contact the CRA to obtain an explanation. Speaking with the CRA will not delay the deadline for sending an objection or filing an appeal. However, taxpayers should note that interest will accumulate during this period of time, and the CRA can take collection action even where an objection or an appeal has been sent.
Objections and appeals can be filed with respect to:
- Tax assessments and reassessments;
- CPP and EI assessments and rulings;
- GST/HST assessments and reassessments;
- Taxpayer relief requests;
- Voluntary disclosures.
The CRA works to ensure the review process is impartial.
5) The Right to be Treated Professionally, Courteously, and Fairly
Taxpayers can expect to be treated with courtesy and consideration at all times when dealing with the CRA. Integrity, professionalism, respect, and collaboration are the core values of the CRA.
Where a taxpayer feels that this has not been the case, they can contact the CRA Service Complaints Program.
6) The Right to Complete, Accurate, Clear, and Timely Information
Taxpayers can expect the CRA to provide them with complete, accurate, and timely information in plan language, and explaining any laws and policies that apply in the circumstances.
The CRA provides information in a wide range of electronic and print formats. CRA enquiries agents have training that allows them to respond to taxpayer inquiries.
7) The Right Not to Pay Income Tax Amounts in Dispute Before There is an Impartial Review
Taxpayers have the right not to pay any personal tax amounts that are in dispute until they have had a chance to have an impartial review by the CRA, or, where an appeal has been sent to the Tax Court of Canada, until the court has issued its decision. Taxpayers should note that interest charges will continue to accumulate during this period.
In specific circumstances, the CRA can take collection action even if there is an objection or appeal.
Where a taxpayer disagrees with or would like further information about an assessment or reassessment, they should contact the CRA for an explanation. If evidence that an assessment is not correct is provided, the CRA will suspend collection actions on the questioned amounts until the matter is reviewed and resolved. Amounts not in dispute/being questioned must still be paid.
8) The Right to Have the Law Applied Consistently
Taxpayers have the right to have the CRA apply the law consistently so that all taxpayers receive their entitlements and pay the appropriate amount. The CRA will take each taxpayer’s specific circumstances into account.
Per Right #4, taxpayers have the right to a formal review of their file, and the right to an appeal.
9) The Right to Lodge a Service Complaint and to Be Provided with an Explanation of the CRA’s Findings
Taxpayers can expect that, where they make a service-related complaint (i.e. one related to staff behaviour, mistakes, and undue delays), they will be listened to and given the chance to explain their situation. The CRA will address their complaint promptly and confidentially and will explain its findings.
10) The Right to Have the Costs of Compliance Taken into Account When Administering Tax Legislation
The CRA promotes voluntary compliance by making dealing with the Agency as straightforward and convenient as possible.
11) The Right to Expect the CRA to be Accountable
The CRA is accountable to both taxpayers at to Parliament (to which it reports).
The CRA is accountable to taxpayers through the decisions it makes. Taxpayers have the right to accurate and understandable information in both official languages. Where a decision is made about a taxpayer’s taxes or benefits, that decision will be explained to the taxpayer.
The CRA is also accountable to Parliament for the programs and legislation it administers.
12) The Right to Relief from Penalties and Interest Under Tax Legislation Due to Extraordinary Circumstances
The CRA will consider a taxpayer’s request to waive or cancel all or part of any penalty and interest charges if that taxpayer was prevented from complying with their tax obligations due to circumstances beyond their control.
The CRA will only consider requests where they relate to a tax year or fiscal period ending in any of the 10 previous calendar years. For interest owing for any tax year or fiscal period, the CRA will consider only those amounts accumulated during the 10 calendar years prior to the year in which the request was made.
13) The Right to Expect the CRA to Publish Their Service Standards and Report Annually
The CRA sets targets to achieve service standards based on operational realities, available resources, degree of complexity of a matter, and similar other factors. These standards are regularly revised to ensure they are up to date and relevant.
Where service standards are not met, taxpayers can contact the CRA Service Complaint process.
14) The Right to Expect the CRA to Warn Taxpayers About Questionable Tax Schemes in a Timely Manner
Taxpayers can expect the CRA to provide them with timely information about schemes that are under scrutiny by the CRA. This information is intended to help taxpayers protect themselves from questionable schemes and the consequences of participating in them.
15) The Right to be Represented by a Person of Your Choice
Taxpayers can choose a person to represent them and obtain advice about their tax and benefit affairs. Once that person is authorized by the taxpayer, the CRA can discuss the taxpayer’s situation with that individual. The taxpayer remains responsible for their own tax and benefit affairs, even if they choose to have someone act for them.
17) The Right to Lodge a Service Complaint or Request a Formal Review Without Fear of Reprisal
Taxpayers can be sure that the CRA will treat them impartially, and that they will receive the benefits, credits, and refunds to which they are entitled, and to pay no more or no less than what is required by law. They need not fear reprisal.
How Can a Tax Lawyer Help?
Despite these seemingly clear guidelines provided by the CRA intended to help protect taxpayers, it is likely that if you have received correspondence from the CRA about an audit, an assessment, or a reassessment, you may have many questions and may require guidance. In practice, many of the principles described in the Bill of Rights are inconsistently applied, and CRA representatives will pursue matters despite the rights described unless they encounter resistance which comes with legal authority to support it.
Before you take any action in response to a notification from the CRA, it would be wise to consult with a knowledgeable tax lawyer as soon as possible.
At Duncan, Linton LLP we have served our community for more than 150 years. Our lawyers are dedicated to building strong and lasting relationships with our clients and helping them navigate their most challenging legal and tax issues. The lawyers in our Tax Law Group work closely with external accountants as well as lawyers across our other practice groups to provide thorough, in-depth risk management advice. Call us at (519) 886-3340 or contact us online to speak to a member of our Tax Group.