In an update posted on 28 May 2020, the Canada Revenue Agency (CRA) announced changes to collections, audits, objections, and appeals due to COVID-19. In this post, we will summarize those changes. At this time these changes do not directly impact SR&ED claims, but the changes could be expanded at a later date.
Collection on new debts
The CRA announced, “Collections activities on new debts will be suspended until further notice, and flexible payment arrangements will be available.” Additionally, they announced that payment arrangements are available for those unable to pay taxes, child and family benefit overpayments, Canada Student Loans, or other government program overpayments. The collections staff will examine pre-existing situations and reasons for financial hardships on a case-by-case basis. The Debt Management Call Centre service is not currently available.
The site posted, “If you need to contact a Collections Officer, please call our toll free number at 1-800-675-6184 between 8 am and 4 pm your local time.”
The CRA also announced it was resuming a full range of audit work, as well as, adapting their practices to reflect the health and economic impacts of COVID-19. They stated:
We are prioritizing actions that are beneficial to the taxpayer or where taxpayers have indicated there is an urgency to advancing their audit. In prioritizing our resumption, we are also focusing on higher dollar audits first, audits close to completion, and those with a strategic importance to the Government of Canada, provinces and territories, or our tax treaty partners. In addition, efforts to combat suspected fraud and other criminal activity are advancing.
Additionally, the CRA announced:
New methods of taxpayer and registrant interaction will be required, and the CRA is working to develop procedures and protocols to adapt these to the current reality. For example, we are providing taxpayers with the option to send us information via e-mail. Some key changes will relate to offering additional time and upfront consultation on requests to provide the CRA with information and access. Public Health directives will be respected, and additional reasonable measures will be extended both in terms of timing or another other aspect of a CRA request.
In addition, Requirements for Information (RFIs) issued prior to March 16 and due after that date will be reviewed and taxpayers and third parties, including financial institutions, will be contacted where the CRA continues to require the information in the RFI.
Objections, appeals and taxpayer relief
Next, the CRA explained:
Objections related to Canadians’ entitlement to benefits and credits have been identified as a critical service and will continue to be delivered during COVID-19. There should not be any delays with the processing of these objections.
For objections related to other tax matters filed by individuals and businesses, the CRA is currently holding these accounts in abeyance. No collection action will be taken with respect to these accounts at this time.
For objections that are due between March 18, 2020 and June 30, 2020, we are effectively extending the deadline to June 30, 2020.
The Tax Court of Canada is currently closed. For more information, go to the Tax Court of Canada.
The CRA also stated, “Taxpayers who are unable to file a return or make a payment by the tax-filing and payment deadlines because of COVID-19 can request the cancellation of penalty and interest charged to their account.” They explained that penalties and interest will not be charged if the new deadlines that the government has announced to tax-filing and payments are met.
The CRA also explained that “Once business operations resume, the Taxpayer Relief Program will review requests related to COVID-19 on a priority basis.”
Suspending individual (T1) validation and review activities
The CRA stated that:
Some review and verification activities were initiated prior to the COVID-19 pandemic and clients may have been contacted to provide supporting information in relation to amounts claimed on their individual tax and benefit returns. If Canadians have received any CRA correspondence that includes dates for response or provision of documents for validation and verification programs, no action is required from them at this time.
The CRA also explained that due measures undertaken for the COVID-19 virus, their telephone services are not available.
Finally, the CRA stated:
It is important to note that, although reviews have been postponed, it does not prevent future actions or reviews from being completed. Taxpayers will need to keep their supporting documents, in case they are selected for review in the future.
These announcements made by the CRA regarding collections, audits, objections and appeals surrounding the COVID-19 crisis are important for all tax payers to be aware. Many of these actions will help taxpayers during this difficult time. The post on the CRA’s page can be found here: Collections, audits, objections and appeals: CRA and COVID-19.