OTTAWA — Canadians who make mistakes on their tax returns after receiving wrong information from the Canada Revenue Agency (CRA) have virtually no legal recourse, a tax lawyer says — even as the federal auditor general reports shocking levels of inaccuracy in the agency’s taxpayer support lines.
A new report from Auditor General Karen Hogan found that CRA call centre staff answered only 17 per cent of tax-related questions correctly during a four-month review this year. The report said the agency appeared more focused on keeping to break schedules than ensuring callers received accurate and complete information.
Tax lawyer David Rotfleisch says that under the Income Tax Act, Canadians are ultimately responsible for filing their taxes correctly — even if they were misled by CRA advice. “Taxpayers cannot and should not rely on the CRA’s general information line,” he said, calling it “notoriously wrong.”
Rotfleisch added that while taxpayers can appeal interest or late fees if they can prove their errors were caused by misinformation, they won’t face gross negligence penalties. However, they also won’t be compensated or excused for filing incorrect returns.
Franco Terrazzano, federal director of the Canadian Taxpayers Federation, slammed the agency’s poor performance and said the government should focus on simplifying Canada’s complex tax system. “The CRA’s performance is horrendous,” he said. “Nobody understands the impossibly complicated rules, and Canadians shouldn’t pay the price for bureaucratic incompetence.”