Principal Issues: Registration style system for tax preparers.
Position: General comments
Reasons: See below
2013 STEP CANADA ROUNDTABLE, June 10 & 11, 2013
QUESTION 15. Tax Preparer Registration
At the 2012 Canadian Tax Foundation National Conference, the CRA hinted that it was exploring a registration style system for tax preparers. Can the CRA shed further light on this statement?
CRA Response
Like tax administrations throughout the world, the CRA is looking for better ways to make compliance easier and non-compliance more difficult. As mentioned in Budget 2013, the CRA is moving toward a new compliance approach that emphasizes helping taxpayers to avoid costly and time-consuming audits by getting it "right from the start." (endnote 1) This compliance approach is being used by tax administrations worldwide and is largely based on the Organization for Economic Co-operation and Development work entitled "Right from the Start: Influencing the Compliance Environment for Small and Medium Enterprises." (endnote 2)
Tax intermediaries are critical links between the CRA and the taxpayer. In fact, the majority of tax returns are prepared by tax intermediaries. In Budget 2012, (endnote 3) it was announced that the CRA would be leveraging the expertise of tax professionals in order to improve the effectiveness of its operations. Consistent with Budget 2012 and as part of developing its new compliance approach, the CRA is looking at what other countries are doing to recognize and build on the important role played by tax intermediaries in the tax system.
Leading tax administrations such as the United States' Internal Revenue Service and the Australian Taxation Office have recently implemented registration programs for tax intermediaries, which require certain minimum standards of suitability, conduct and tax competency. Other countries are also consulting about or implementing programs relating to tax intermediaries, including the United Kingdom, South Africa and the Netherlands.
2013-048040
Eliza Erskine
ENDNOTES
1 Budget 2013 Chapter 3.2 and 4.1:
"The CRA is also expanding its small business focus across all operations, and is moving towards a "tell us once" approach, so that small businesses will not have to submit the same information several times. The CRA is helping small business owners avoid costly and time consuming audits by raising awareness of their tax obligations in order to help them to get it right from the start."
"In addition, Economic Action Plan 2013 confirms that the Canada Revenue Agency will implement transformational changes to its compliance programs that will improve effectiveness and help to preserve the integrity of the tax system through targeting non-compliance in the highest-risk areas."
2 Organisation for Economic Co-operation and Development, Forum on Tax Administration SME Compliance Sub-Group, January 2012.
3 Budget 2012: "The Canada Revenue Agency continues to modernize its operations and reduce red tape to enhance services to Canadians while reducing its overall costs. In addition, the Agency will leverage the expertise of tax professionals to improve the effectiveness of its operations."