Harper Government Announced New Measures To Support Small Business Compliance… Still Waiting!

On January 17th, 2014, the Minister of National Revenue, The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P. announced a new three-point plan to support small and medium-sized businesses in Canada to comply with every increasing tax rules and regulations.

The intention of these proposed changes were to better help small and medium business meet their tax obligations without incurring penalties and / or interest, save time getting and remaining compliant without having to hire unnecessary outside organizations to do so.

These new measures were going to make it easier for small and medium-sized business to address the taxation side of their business so they could focus on making money!

It has not happened.

The Conservative’s three-point plan featured:

  1. Earlier support to businesses in their business cycle
  2. Better and earlier access to clear and comprehensive information, and
  3. Where required, focused interventions where the risks of non-compliance are highest.

The plan included 2 main initiatives:

The Liaison Officer Initiative: Currently a pilot project in Quebec and Ontario, in this initiative the CRA provides in-person information to small and medium enterprises at key points in their business cycle to help them get it “right from the start.”  Of concern to many business is the contract the CRA makes you sign to acknowledge that you understood what the Liaison Officer told you and that you will remain current.

The Registration of Tax Preparers Program (RTPP): The CRA scooped this right from the Internal Revenue Service (IRS) who require all their tax preparers to be registered.  The public consultation period ended May 31st, 2014.

This program proposes to register tax preparers so the Canada Revenue Agency (CRA) can better identify and address common and recurring errors with them before tax returns are filed. The RTPP signals real benefits for both tax preparers and taxpayers by helping them get it “right from the start,” and avoid costly and time-consuming interventions from the CRA after-the-fact.

Approximately 70% of individuals and small businesses use tax preparers to file their taxes. Research shows that there continues to be a significant incidence of errors in tax returns filed.

Under the proposed RTPP, the CRA would register tax preparers who are paid a fee for their services, so that the CRA can identify those who are preparing non-compliant tax returns and work with them, using a strategic compliance approach, to correct problems and avoid errors in the future before a tax return is filed.

So where is the help for small and medium-sized businesses who have multiple compliance issues – Payroll, HST, Corporate Tax, WSIB, and are subject to an audit, trust exam or who have their bank accounts frozen.  Being unable to operate for even one day can result in a small or medium-sized business being forced to shut down or find other ways to operate outside of the CRA’s framework.

Even the CRA understands that leaving a Requirement to Pay (RTP) on an account can do serious harm to a business, as would contact their receivables or suppliers.  The CRA constantly falls short in their efforts to support small and medium-sized businesses when collectors take days to respond to voice mail messages or have unreasonably long requests for information which they leave the accounts frozen while they wait for it.

Worse, is absolute lack of accountability the CRA has for accounts which have been moved around and are in a vacant inventory or out of collections status.  With the CRA’s recent crack-down on collectors accessing accounts not in their inventory – mainly to assist taxpayers – CRA management is telling staff not to touch accounts which are not assigned to them with a ten-foot pole.

If you have a problem and it’s old, or unassigned, forget about fixing it on your own.  Even if the CRA were 100% wrong, no one wants to deal with it at all.

It is the lack of regard for the small and medium-sized business owner which the CRA constantly displays when they administer the tax act, which leads to this sector of the economy having to hire firms, like the one I operate, in order to keep them operating, get them compliant and find ways to reduce expenses and resolve tax debts.  I touch all accounts with a ten-foot pole.

inTAXicating WILL touch all tax issues with a ten-foot pole.
inTAXicating WILL touch all tax issues with a ten-foot pole.

So it’s great that small and medium-sized businesses have the attention of the Prime Minister of Canada, but they need to act on it, much faster than they are right now.

The link to the original article is here;

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Author: Warren Orlans

Welcome to inTAXicating. My name is Warren Orlans and this is my blog. With over 17-years experience in the taxation industry, 11 of them working for the Canada Revenue Agency (CRA), and the rest working in the private sector at large financial institutions responsible for resolving tax issues for corporations and individuals and the Canadian lead for a large US bank on FATCA implementation. My tax career began pretty much out of university at the CRA, in Collections, where I moved up, across, over and up again through their division with stops in Enforcement, Taxpayer Relief (then Fairness), Audit, Directors Liability, Training, Mentoring, GST, GST/HST, Payroll, Corporate Tax, Personal tax, and probably much more. If you have a collections, compliance or audit issue with the CRA, MRQ, IRS or with the CRTC, WSIB or any aspect of those agencies, inTAXicating is the place you need to contact. inTAXicating has entered into a strategic partnership with Goldhar and Associates, to create Goldhar Tax Solutions. This partnership allows my team to include amazing tax lawyers, insolvency practitioners, mortgage brokers, debt counselling experts and much more. When dealing with governments, knowledge is power. We possess strong understanding of government so we know what the next step is before the government does. When you have a collections problem with the CRA, do you hire a graphic artist? No, you get a former collector who trained the staff, and who worked as a resource officer for 5 years. Then you know you are on the right track to resolving your tax problem(s). Others offer suggestions. We offer solutions! tax@goldhar.ca

2 thoughts on “Harper Government Announced New Measures To Support Small Business Compliance… Still Waiting!”

    1. Hi Paul,

      It’s unlikely if there are other sources in Canada or if the account is relatively new.

      The CRA and IRS have an agreement re: tax collection however the process is quite tedious and used mainly where there are large amounts.

      Of course with the right provocation and if the account is aged, the collector might have already submitted the paperwork.

      Like

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