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Canada: Tax Ombudsman Investigated 532 Complaints In First Year

by Leroy Baker,, New York

24 December 2009

The Honorable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture and Agri-Food), has announced that the first annual report of the Canadian Taxpayers’ Ombudsman has been tabled in parliament.

The Taxpayers’ Ombudsman has been tasked with ensuring the CRA meets the requirements of the Taxpayer Bill of Rights, and independently reviews and conducts investigations into complaints lodged against the CRA by taxpayers, and identifies and reviews CRA procedures and policies. The current – and first – Taxpayers’ Ombudsman is Paul Dubé, who was appointed on February 21, 2008 for a three-year term.

The report states that the Ombudsman received 4,853 enquiries, requests and complaints; of these, 1,038 files were opened, and 532 individual complaints relating to the Canada Revenue Agency (CRA) were investigated. Of the 532 complaints, 281 reviews found in the CRA’s favor, and 84 files were carried over into the next fiscal year.

The report finds that, while the CRA “treats taxpayers fairly most of the time,” and “does many things very well,” there were shortcomings. The investigation into the complaints resulted in apologies to taxpayers by the CRA, the release of seized bank accounts, the payment of social benefits and refunds, and changes to CRA policies and procedures. The report also gives details of a number of case studies, including a single mother whose child benefit payments had been wrongly suspended by the CRA; unclear CRA correspondence with a taxpayer; business payments made to the CRA being applied to the wrong accounts; and the seizure by the CRA of a taxpayer’s shares as compensation for unpaid tax –after investigation, it was found the taxpayer was entitled to a CAD8,300 refund.

"The Taxpayers’ Ombudsman has demonstrated an understanding of the challenges faced by taxpayers when trying to settle disputes and a practical appreciation for the size and complexity of the task the CRA faces in processing some 24 million individual tax returns and approximately 1.6 million corporate returns each year," said Blackburn. "Already, the Office of the Taxpayers' Ombudsman has shown its potential to help the [CRA] improve its service to Canadians.”

In the introduction to the report, Dubé noted that “taxpayers, tax professionals, elected representatives, business people, associations, and interest groups we have spoken to have all expressed support for this office.” He also highlighted that “widespread trust in the [tax] system increases compliance levels, and reduces both litigation against the CRA and participation in the underground economy.”

The report states that the Ombudsman is to investigate CRA systemic issues without prior complaints; details of how to highlight such issues to the Ombudsman appear on the Taxpayers’ Ombudsman website.

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