Principal Issues: [TaxInterpretations translation] How does the CRA ensure the integrity and reliability of the information submitted when filing information returns electronically?
Position: General comments provided.
January 25, 2010
Business Returns Directorate Headquarters Business Relations and Services Division Income Tax Rulings Directorate Attention: Paula Lepage 2009-033860
Electronic transmission of information slips
This is further to your email of August 27, 2009 regarding the above subject. You wish to know whether a corporation or business that is required to file its information returns electronically must also declare that the information provided is accurate and complete, and how the CRA can ensure the accuracy of such a return.
Unless otherwise indicated, all legislative references herein are to the provisions of the Income Tax Act (the "Act").
Our Comments
Subsection 162(7) imposes a penalty on every person, other than a registered charity, who fails to file an information return as and when required by the Act or the Income Tax Regulations (the "Regulations") in the prescribed manner. Therefore, this subsection applies to taxpayers who fail to file information returns or fail to comply with an obligation imposed by the Act or the Regulations, unless another provision of the Act provides for such a penalty (footnote 1).
Subsection 162(7.01), applicable to information returns required to be filed after 2009, is intended to penalize a person, other than a registered charity, who fails to file one or more of those returns within the time limits.
Subsection 162(7.02), which also applies to information returns required to be filed after 2009, deals with the filing of those returns. The current version of section 205.1 of the Regulations requires that information returns, if more than 500 are to be filed for the calendar year, are to be filed in electronic format. This section will be amended to reduce the number of a particular type of information return that a taxpayer may file before being required to file those returns electronically under an existing tax provision from 500 to 50.
If a person files a prescribed form and fails to provide the required information, the person may be liable to a penalty under subsection 162(5).
To ensure the reliability and accuracy of the information return submitted, the CRA conducts numerous audits each year to ensure compliance with the Act and the keeping of records, notwithstanding the formal acceptance of the filing when using our electronic services.
Finally, the CRA website informs the filers that before filing online, they must agree to certain terms and conditions. One of these terms and conditions requires the filer to certify that the electronic return submitted is accurate and complete. No electronic transmission of any return can be made without this formal acknowledgement by the filer. Our system is designed so that the declarant cannot override this commitment.
You also referred to Form T183 for individuals and Form T183CORP for corporations. These forms are required under subsection 150.1(4) if, and only if, the transmitter of the income tax return, not being an information return, is not the taxpayer or the taxpayer's authorized signing officer. Therefore, we cannot rely on this certification since it does not apply to the transmission of an information return.
Access to Information
For your information, unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, the electronic library version can be provided. Alternatively, the client may request a severed copy using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Ms. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.
We hope that these comments are of assistance.
François Bordeleau, LL.B.
Manager
Business and Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate.
ENDNOTES
1 With the exception of subsections 162(10) and (10.1) and of subsection 163(2.22).