[ad_1]
On June 23, two senior Canada Revenue Agency

(“CRA“) officials outlined a status
update on tax controversy and dispute resolution at this stage of
the COVID-19 pandemic. This previewed the CRA’s progression
from “critical services” mode, to a “business
continuity” plan and finally to a “business
resumption” plan starting June 29. As the presentation was not
recorded, we are providing our list of ten top ten areas
addressed.1

    1. Notices of Objection
        1. While most CRA Appeals officers are
          working from home and can only take their work so far, progress
          continues being made with technological capabilities. Therefore, in
          the near term taxpayers might expect some delay in resolving their
          disputes.

       

        1. However, work on files referred to
          CRA headquarters for review (including large files, aggressive tax
          planning and transfer pricing) has mostly been ongoing despite the
          pandemic. If anything, the shutdown may have enabled CRA officials
          at headquarters to catch up on workload.

       

        1. The CRA’s Appeals division will
          continue accepting supplemental submissions.

       

 

    1. Reassessments
        1. While the Assessment, Benefit, and
          Service Branch had been devoted to dealing with subsidy and support
          programs during the pandemic and therefore had limited capacity to
          process and issue reassessments, these are now advancing. The CRA
          is seeking to be sensitive to the needs of individuals and small
          businesses and is showing forbearance for now, unless a
          reassessment needs to be issued immediately (for example, where the
          year or period may become statute-barred).

       

        1. When a CRA Appeals officer has
          concluded that an assessment should be varied or vacated,
          reassessments generating a refund are a priority. There may be some
          delay for complex matters while an Appeals recommendation gets
          reviewed at a higher level.

       

 

    1. Transfer Pricing
        1. Advance Pricing Arrangements and
          Mutual Agreement Procedure matters remain in progress and timelines
          for mandatory arbitration are not delayed, as pending matters have
          been moving forward.

       

        1. Submissions to the Transfer Pricing
          Review Committee are being accepted and considered and outstanding
          requests for contemporaneous documentation that were cancelled have
          since been reissued (thus, as of June 10, the compliance clock for
          contemporaneous documentation is again ticking).

       

 

    1. Impending Statute-Barred Dates
        1. Treaty-based limitation periods are
          fixed and as a result meeting them has remained a high
          priority.

       

        1. For domestic limitation periods, the
          CRA is receptive to waivers of the normal reassessment period and
          managing files that may become statute-barred remained a
          priority.

       

 

    1. Bill C-17, An Act respecting
      additional COVID-19 measures

        1. This proposed legislation (which has
          so far only gone through first reading in Parliament), will allow
          for Ministers with responsibility for particular Acts of Parliament
          to adjust listed time limits and periods under those statutes.

       

        1. The Minister of National Revenue will
          have the power to extend certain deadlines under the Income Tax
          Act
          (Canada) (“ITA“) and the
          Excise Tax Act (Canada)
          (“ETA“). The normal reassessment periods
          and related exceptions under the ITA and ETA may be extended and
          the rigid timing requirements for SR&ED filings would also be
          relaxed. The draft legislation would also address the time periods
          for seeking an extension of time to object to an assessment.
          Missing a deadline to object can be addressed by seeking an
          extension of time, but ordinarily if the extension period lapses a
          taxpayer would be irrevocably prejudiced. Whether the legislation
          is ultimately enacted is uncertain and taxpayers are urged to file
          objections or extension requests as soon as possible, rather than
          planning to rely on proposed extensions in the draft
          legislation.

       

        1. The purpose of Bill C-17 is primarily
          to assist the Canadian public and if/when the legislation is
          enacted it is expected to be interpreted fairly and reasonably. The
          CRA is unlikely to try to take advantage of any retroactive effect
          to reopen periods that became statute-barred in the time leading up
          to the legislation being enacted.

       

 

    1. Late-filed Elections, Designations
      and Objections

        1. Taxpayers should not count on blanket
          automatic extensions of time for late-filing elections,
          designations or notices of objection. There are subtleties in the
          interpretation of the relevant provisions and taxpayers and their
          advisors should look not only at the statute(s), but at the
          CRA’s published guidance. For notices of objection that were
          due between March 18 and June 30, the filing deadlines have been
          automatically extended to June 30.

       

 

    1. Taxpayer Relief
        1. Taxpayer relief can be granted
          proactively or on application by a taxpayer. The CRA typically
          grants proactive relief where it recognizes its own delays in
          managing a file have resulted in interest accrual. Where the CRA
          has extended certain filing deadlines, neither penalties nor
          interest will be charged, if the filings are made by the extended
          deadline.

       

        1. Otherwise, whether a taxpayer may be
          granted relief in connection with the pandemic is determined on a
          case by case basis. Some audit and appeal work has continued, while
          some files have stalled. If a matter has progressed despite the
          pandemic, there would be no basis for interest relief.

       

        1. The CRA anticipates a deluge of
          relief requests and recommends filing them online to help expedite
          review and results.

       

 

    1. Voluntary Disclosures Program
      (“VDP“)

        1. The VDP has resumed operations and
          has been gradually expanding its operations since mid-May. However,
          there is a backlog, due to both the influx of applications made
          before the VDP changed in 2018 and the pandemic.

       

 

    1. Taxpayer Communications
        1. The best way to liaise with the CRA
          is often through its online portal. Information can be uploaded
          with a limit of 150MB per file (large files might need to be broken
          up). The CRA’s e-services helpdesk can provide support and can
          be reached at 1-800-959-5525.

       

        1. While CRA officers may in certain
          circumstances communicate via cell phones or email, this is
          regarded as insecure and thus at the taxpayer’s own risk. Video
          conferencing may become an option at a taxpayer’s request. For
          now, there are no in person meetings.

       

        1. Everyone at CRA headquarters should
          be available and approximately 70% of the rest of the workforce
          should be reachable. It cannot yet be guaranteed that everyone is
          checking messages and returning calls.

       

        1. Regular mail of course remains an
          option as mailrooms become increasingly operational, although
          perhaps less timely.

       

 

    1. Requirements for Information
      (“RFI“) and Audits

        1. For pending RFIs, the CRA will
          contact taxpayers if the requested information is still needed.
          RFIs issued before March 16 with deadlines after that date will be
          reviewed.

       

        1. The CRA plans to be accommodating
          with the timing for complying with 30 day letters, unless a
          taxation year may imminently become statute-barred.

       

 

Footnote

1. This summary is based on our notes from the
Advocates’ Society event, provided as a service for the
information and benefit of interested parties unable to attend.
Accordingly, while this reflects our best efforts to accurately
transmit helpful information to our readers, it should not be taken
as setting out official CRA positions.

“Read the original article on GowlingWLG.com“.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Tax from Canada

Residence Determinations: Canadian Tax Lawyer’s GuideRotfleisch & Samulovitch P.C.

There are two types of residence for taxpayers; their immigration residence and their tax residence. A taxpayer can be resident of one country for immigration purposes and resident of an entirely different country for tax purposes.

How To Impact Your 2020 Tax BillCrowe MacKay LLP

Crowe MacKay LLP’s trusted advisors work for you – this means we take the time to know our clients. Whether it’s your first time filing taxes, or you consider yourself a pro…

[ad_2]

Source link

Share This Story, Choose Your Platform!

Share on facebook
Share on twitter
Share on reddit
Share on linkedin
Share on whatsapp
Share on tumblr
Share on pinterest
Share on vk
Share on email