On January 17th, the Canada Revenue Agency finally issued its proposal for the registration of tax preparers that file personal and corporate tax returns for a fee. Although there are legitimate concerns regarding the introduction of such a program (such as the potential shift of responsibility for accurate returns from the taxpayer to the tax preparer), on the whole, I think implementing this program will be a significant milestone in the efforts to ensure that both taxpayers and the integrity of the tax system are protected.
Although tax regulations in Canada are increasingly complex, currently there are no restrictions whatsoever on who can call themselves a professional tax preparer. Seniors on fixed incomes are particularly at risk as they try to find low-cost alternatives to prepare their taxes. They will often turn to tax preparers who are quite simply not qualified to do the work. From the many tax returns I have reviewed, this more often than not results in the taxpayer overpaying their taxes due to missing credits, and many times these overpayments are significant.
For low-income seniors with basic tax returns, a better alternative is the free tax clinics offered by CPA Canada at various senior’s homes, community centres and libraries throughout Canada. Tax returns at these clinics are prepared free of charge by qualified professional accountants. To qualify, family income must be below $30k for those with dependents, or $20k with no dependents. Returns with rental or business income are also not accepted.
The tax preparers registration program will not be implemented before 2016. I would urge anyone in the tax preparation community or the general public who would like to provide their input, to submit their comments to the Canada Revenue Agency by the closing date for comments on May 31, 2014. Submissions can be made online at www.cra.gc.ca/rtpp. Alternatively, written submissions can be sent to:
Registration of Tax Preparers Program Consultations
Canada Revenue Agency
Place de Ville
806-8th floor, Tower B
112 Kent Street