CRA Response to the 2017 Systemic Examination Report: Without Delay

Original report submitted to the Minister of National Revenue September 2017.

An examination into service issues arising from delays in the Canada Revenue Agency’s Taxpayer Relief Program.

Recommendation #1

The Taxpayers’ Ombudsman recommends that for each taxpayer who has filed a request for relief, the Canada Revenue Agency:

1. Advise the taxpayer whether their request is routine or complex; and,
2. Provide the taxpayer a clear and accurate estimates processing time.

CRA’s response

The CRA accepts this recommendation in principle, pending an analysis of its feasibility.

2018 update

Between October and December 2017, the CRA conducted an analysis on the feasibility of this recommendation.

As a result of that analysis, the CRA expects to be able to implement this recommendation by April 1, 2019. The Agency will need to take the following steps for this to happen:

• gather data to determine the approximate processing time as well as the amount of time taxpayer relief officers spend on complex requests;
• review and where necessary, revise procedures on determining the complexity of requests; and
• review and where necessary, revise correspondence templates to:
  • advise taxpayers if their request is routine or complex;
  • provide taxpayers with an accurate estimate of the processing time for their request based on the level of its complexity; and
  • advise taxpayers when, upon further review, the level of complexity of their request has changed.

The CRA began tracking its processing times for complex requests in January 2018. An analysis of the data collected will be completed in Fall 2018, and the results will be used to provide more accurate processing times to taxpayers.

After the completion of this analysis, the CRA will also be reviewing and revising, as needed, its procedures and correspondence templates. This stage is expected to be completed by the end of March 2019.

2019 update

The CRA reviewed its procedures on determining the complexity of taxpayer relief requests and found that its agents are able to correctly identify the level of complexity using existing procedures. Therefore, it was concluded that no changes were required.

On April 1, 2019, the CRA revised its correspondence templates to:

• advise taxpayers if their request is routine or complex;
• provide taxpayers with an accurate estimate of the processing time for their request based on the level of its complexity; and
• advise taxpayers when, upon further review, the level of complexity of their request has changed.

The CRA considers this recommendation to be fully implemented.

Recommendation #2  

The Taxpayers’ Ombudsman recommends that the Canada Revenue Agency maintain nation-wide consistency in the processing times of taxpayer relief requests.

CRA’s response

The CRA accepts this recommendation. The CRA already commenced steps in 2014 for maintaining nation-wide consistency in processing times for relief requests related to the cancellation of penalties and interest.

2018 update

The CRA has implemented significant enhancements to its existing Appeals workload management system and is working to update its current technologies which will contribute to further improving consistency in processing times for taxpayer relief requests across Canada.

Although a national process related to the movement of files was implemented in 2014, the CRA is working to improve technologies so that it can move away from that manual process of inventory management towards a more automated process.

In addition to the enhancements to its management system, the CRA has made the following changes that have resulted in improvements to the processing of taxpayer relief requests:

• changes to processes and procedures to address high inventory levels;
• development of program monitoring and quality assurance processes, to identify issues and discrepancies, promote consistency, and identify gaps and improvements;
• introduction on April 1, 2016, of an external service standard (acknowledgement of receipt of request within 30 calendar days) with a commitment to meet this standard 85% of the time;
• introduction on April 1, 2017, of a new service standard (processing requests and issuing a decision within 180 calendar days) with a commitment to meet this standard 85% of the time;
• sharing of a national process map for intake centre screeners across all regions that is expected to enhance consistency among all intake centres.

These improvements have allowed the CRA to reduce the processing time for taxpayer relief requests from an average of 15 months in October 2013, to 12 months in January 2015. With the change to the current manual process for inventory management, the CRA was able to further reduce the processing time to 6 months in October 2015. In the past year, the CRA processed taxpayer relief requests to cancel or waive penalties and interest within 180 days of receipt, 86.8% of the time.

The CRA has completed a comprehensive review of its business processes for the Taxpayer Relief Program intake centres and continues to work at improving efficiency and consistency across all regions.

A review of the business process for the Centres of Expertise is currently in the planning phase and is expected to further improve consistency as well as reduce processing times. The expected completion date for this review is March 2020.

An e-services project is currently underway to improve Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest, which will allow taxpayers to submit structured relief requests through the CRA’s online portals. The expected completion date for this project is May 2020.

2019 update

In April 2019, the CRA implemented a standardized approach for documenting taxpayer relief decisions. It is expected that this will result in more consistent processing of taxpayer relief requests.

In September 2019, the CRA will launch a pilot project for the creation of a national inventory, which will increase efficiencies in workload management, reduce regional inventory variations, and ensure a fair and consistent approach to the delivery of service to taxpayers.

The CRA has increased its focus on continuous improvement and service, and is taking the opportunity to review, clarify, and challenge the purpose of its processes. In January 2019, the CRA held the first national process review event on the processing of taxpayer relief requests. Opportunities for improvement were identified and will be implemented, thereby contributing to maintaining nation-wide consistency.

The CRA intends to launch a pilot in one region to test the identified improvements before the end of December 2019. This will allow the CRA to make any necessary modifications prior to national implementation in April 2020.

The CRA will continue to foster a culture of continuous improvement and identify opportunities for enhancements. These ongoing improvements, which include a focus on the needs of taxpayers, are constantly being implemented and will not only maintain, but improve nation-wide consistency in processing times of taxpayer relief requests. As such, the review of the business process for the Centres of Expertise is truly an evergreen process that will continue to evolve moving forward.

The electronic Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest, will be completed and available to taxpayers through the CRA online portals in October 2019.

2020 update

In April 2019, the CRA implemented a standardized approach for documenting taxpayer relief decisions, which has resulted in a more consistent processing of taxpayer relief requests.

In September 2019, the CRA launched the creation of a national inventory, which has resulted in increased efficiencies in workload management, a reduction of regional inventory variations, resulting in a fair and consistent approach to the delivery of service to taxpayers.

The electronic Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest, was launched through the CRA online portals in October 2019, allowing individuals to complete and submit their requests for relief electronically.

Through the various changes implemented since the publishing of this report, the CRA has addressed this recommendation in full.

Recommendation #3

The Taxpayers’ Ombudsman recommends that the Canada Revenue Agency review and identify the factors that contribute to fluctuations in the number of taxpayer relief requests, as well as the impact they may have on the Taxpayer Relief Program.

CRA’s response

The CRA accepts this recommendation. The CRA has already identified the factors that contribute to fluctuations in the number of taxpayer relief requests and is aware of the impact they have on the program.

2018 update

The CRA routinely monitors both internal and external factors that may have an impact on the volumes of taxpayer relief requests it receives.

Specifically, the CRA tracks and monitors the number of taxpayer relief requests related to natural disasters, such as the British Columbia wildfires (2017), the Ontario and Quebec floods (2017), and the Atlantic and Pacific floods (2018).

The CRA also monitors initiatives implemented by its various program areas to determine if they have the potential to impact the Taxpayer Relief Program.

By closely monitoring these activities (internal and external), the CRA is able to react and respond appropriately to changes in the number of requests for taxpayer relief.

Recommendation #4

The Taxpayers’ Ombudsman recommends that the Canada Revenue Agency allocate sufficient permanent funding to the Taxpayer Relief Program to allow for adequate planning, to ensure the Program consistently meets or improves upon its processing times for taxpayer relief requests.

CRA’s response

The CRA recognizes the importance of the Taxpayer Relief Program. As the CRA must respond to many pressures regarding its services and programs, there is a thorough process to allocate funding to programs across a wide range of activities, and new funding may be requested via the Federal Budget. The program is currently exceeding its publicly stated service standard.

2018 update

The CRA began tracking and monitoring time spent on complex taxpayer relief requests in April 2018. With this data, the CRA is now able to evaluate the time spent on both routine and complex requests and adjust the average time per taxpayer relief request accordingly.

In addition, the CRA conducts numerous costing exercises related to initiatives implemented by its various program areas where it has been determined that the initiative has the potential to impact the Taxpayer Relief Program.

The CRA will use this information to determine and allocate funding, as needed, to consistently meet or improve on the processing times for taxpayer relief requests.