Principal Issues: Update on CRA commitments regarding the appeal process following the December 2016 AG report.
Position: Update Provided.
Reasons: Update provided by the Appeals Branch.
2018 CTF Annual Conference
CRA Roundtable
Question 6 – Appeal Process Update
CRA published several commitments to improve the appeal process as part of the December 2016 Auditor General Report. Now that 2 years have passed since CRA made these commitments, can the CRA comment on the progress to date?
CRA’s Response:
Following the release of the Auditor General’s Fall 2016 Report on Income Tax Objections, the CRA implemented action plans to address the recommendations made by the Auditor General and Parliament’s Standing Committee on Public Accounts; these action plans have resulted in:
- The implementation on April 1, 2017 of a service standard aiming to resolve low-complexity tax objections within 180 calendar days, 80% of the time. This service standard was met over 90% of the time at the end of the second quarter (Q2), of the 2018-2019 fiscal year.
- The implementation on April 1, 2018 of a service standard aiming to resolve medium-complexity tax objections within 365 calendar days, 80% of the time, with the expectation of attaining this target in 2020-2021. This target is currently being met 73% of the time, which exceeds forecasted results.
- The inventory of regular objections (i.e., non-national-group objections) has been reduced by 25% since Q2, 2016-2017 (from 55,076 to 41,428 at the end of Q2, 2018-2019).
- Improvements have been made to the CRA’s website in order to better inform taxpayer expectations, such as adding average timelines for assignment and resolution of low- and medium-complexity objections, as well as a decision tree to identify the best channels to address income tax issues. A decision tree for GST issues will be implemented by early 2019.
- The Agency has collaborated with the Chartered Professional Accountants of Canada on three blog posts on the objection process and how to accelerate dispute resolution.
- The OAG’s report showed that 84% of decisions fully or partly in favour of taxpayers were due to new facts presented at the objection stage. To improve these results, the Agency implemented the Feedback Loop process to foster and strengthen collaboration between its program branches in order to learn from objection decisions. The Feedback Loop process is breaking down silos within the Agency and facilitating a more client-centric approach within all programs; it provides meaningful information to assessing, verification, and audit programs through regular communication between the Appeals Branch and these programs, the distribution of national-, regional-, office-, and case-level objection decision reports, as well as research and analysis of objection decisions. These processes have been initiated to improve program policies and procedures, as well as train staff.
- A review of all key processes related to the processing of objections was conducted, resulting in the identification of a number of opportunities for efficiencies. Examples of initiatives already implemented include the automation of some data collection and data-entry steps, updated forms and procedures, the elimination of unnecessary data captures, and the introduction of a triage function for low-complexity and some medium-complexity objections. In many cases, this triage function has resulted in taxpayers being contacted within 30 days to request supporting documentation, over 100 days earlier in the process.
- The Agency has added resources to address the workload of high-complexity objections.
- The Objections Program has improved its data integrity and performance reporting; timeliness reporting includes all the time an objection’s resolution falls within the control of the Government of Canada and excludes time spent awaiting supporting information from the objector.
Going forward, the CRA will continue to improve the Objections Program’s timeliness and efficiency, and target the resolution of group objections.
Prepared by:
Paul C. Jané
Appeals Branch
2018-077990
November 27, 2018