Review of CRA 12 Step Red Tape Reduction Plan Part 4 & 5

Part 4 & Part 5

In this part of the CRA red tape reduction plan the Canada Tax department is taking responsibility for their accountability for information.    This is also a welcoming change.   All too often advice given by the tax department in the past has either been so vague or so complex that it is near impossible for the business person to decipher.    In fact, it often creates confusion for the tax accountant who is far more experienced with business tax matters.    These professionals however, are able to follow through with determining the full meaning of such information based on their expertise.

Sometimes this hard to understand information would cause the business person to take the wrong action that could carry on for months before it was given to their accountant.    Then to try and undo the error became a huge task.


What the CRA is hoping to accomplish now is better communication between themselves and the business world in Canada.    Coupled with this it means that the written advice will be clearer to understand and at the same time it will be consistent.    The business sector should feel that they are being treated in a more fair manner.


The next area that they are focusing on is the auditors.    These are the tax individuals that many fear.   These tax pros are the ones that are going to scrutinize your records.   If your business has ever been the target of a tax audit then you know that this can be a trying experience.


This audit makeover will begin with the selection process of who is going to be chosen for audit in the first place.    It will be streamlined to target those businesses that pose a higher risk of not reporting their income properly.   This is going to reduce a lot of unnecessary audits of which there have been a lot of in the past.
In the past it would seem to many that the auditors had no real understanding of what the average business person was faced with on a daily basis in the operation of their business.    These auditors are now going to be better trained to be realistic about the businesses they are dealing with.


Professionalism and assessments are going to be a matter of attention.    The law of a proposed assessment will be more adequately applied.   In other words there will be a quality assurance program in place.    It would seem that new training is on the horizon for the CRA auditors.
Both of these sections of the red tape plan are good moves on the CRA’s part.    What has many people concerned however is although it all sounds good just how long are small businesses going to have to wait to see all this come into action?


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Sam Seidman, CPA, CA, LPA
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Toronto, Ontario
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