Taxes: the end of the paper notice of assessment?

The Canada Revenue Agency (CRA) wants to get up to speed by changing the way it communicates with taxpayers, and accountants are concerned.

Taxes: the end of the paper notice of assessment?

The Canada Revenue Agency (CRA) wants to get up to speed by changing the way it communicates with taxpayers, and accountants are concerned.

Accustomed to receiving our notices of assessment from the CRA by mail, we will soon have to consult our electronic file on the Agency's website to take note of them.

What are accountants afraid of?

A change announced in 2021

The intention is not bad. The tax authorities want to make a transition to electronic communication, which reduces the use of paper and lowers costs. You will tell me that this saving of stamps and envelopes is insignificant in the torrential flood of sometimes questionable expenses of the federal government. That's another subject...

The change was announced in the 2021 budget and was to be introduced in 2022. Ottawa has postponed its implementation until January 1, 2023, so until the next tax season.

The problem, according to CPAs, is that taxpayers will not have much choice. The electronic notice of assessment will be sent to them by default, presumably without any other option, after their tax return has been sent online. A small minority of individuals still file their returns on paper. As for accountants, they all do it electronically.

The document will not be sent directly by email, but will be deposited in "My file", on the CRA website. The individual will be informed of the issuance of the notice by email.

Remember that the notice of assessment contains information of primary importance; it indicates tax debts or overpayments, RRSP contribution room, HBP balance, among others.

Potential Hazards

What does it mean ?

If you haven't already done so, you will need to register for "My Account", which now requires an email address. (You will need to provide your SIN. Have your last two tax returns handy, information about them will be requested.)

Éric Brazeau, of Saint-Jean-sur-Richelieu, is one of the many professionals who denounce these changes. In a letter sent to its MP, Bloc Québécois Christine Normandin, the CPA argues that the majority of its clients (more than 4,000) do not use the CRA's "My Account" online services.

He also points out that a number of individuals do not even have an email address, most of them seniors who live in CHSLDs. For an individual in this situation, he observes, it will be up to the tax preparer to do the follow-up, to get the notice of assessment from the client's file, to print it and send it to him.

For anyone with an email address, the electronic approach increases potential oversights. In the mass of messages that sometimes land in our inbox, the risk of missing or inadvertently discarding an email from the CRA is high. It's harder to miss a tax envelope in your mailbox.

Additional burden

Ultimately, more taxpayers could miss a deadline because of this approach. Accountants also worry about being overwhelmed with requests for assistance from their clients.

The professional order CPA Québec and the national body CPA Canada confirm that this modification represents an issue. CPA Canada appears to be continuing discussions with the CRA. “We are pleased that the CRA has chosen to defer this change to 2023, which we have recommended,” Perry Jensen of CPA Canada said by email.

According to a CPA who does not want to be identified here, the additional burden caused by the electronic notice of assessment may lead some of her colleagues to abandon the personal market.

This is certainly not an incentive to take on more clients as more and more taxpayers struggle to find an accountant.

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