PACP Committee News Release
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Standing Committee on Public Accounts
Comité permanent des comptes publics
For immediate release
The Canada Revenue Agency Did Not Consistently Apply Tax Rules When Auditing or Reviewing Taxpayers’ Files
Ottawa, February 06, 2019 -
As Canada’s income tax system is based on a self-assessment model, part of the Canada Revenue Agency’s (CRA) mandate is to ensure that taxpayers comply with the income reporting requirements of the Income Tax Act. However, the Agency did not apply the law consistently during its compliance activities and treated taxpayers in similar situations in different ways, according to a report of the Standing Committee on Public Accounts presented today in the House of Commons by the Hon. Kevin Sorenson, Chair of the Committee.
In the spring of 2018, the Office of the Auditor General of Canada released a performance audit whose objective was to determine whether the CRA applied the Income Tax Act consistently during compliance activities for various types of taxpayers across Canada, and accurately reported the results of its compliance activities to Parliament.
The audit found that the CRA did not consistently apply tax rules when reviewing or auditing tax files, and that these inconsistencies stemmed from multiple factors, such as the judgment of Agency staff, the region where the file was reassessed, or the type of taxpayer (e.g., a small business or a large corporation). Also, the CRA did not accurately report the results of its compliance activities, and its reporting was incomplete.
As part of its report on this audit, the Committee has made 10 recommendations to help ensure that the Agency improves its compliance activities.
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