Guidance on the Appropriate Use of Signatures

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Guidance on the Appropriate Use of Signatures

Number: AD-24-01

Date: 2024-04-19

Issued by: Policy and Technical Working Group – Compliance Programs Branch, under the authority of the Directors General of all Directorates within the Compliance Programs Branch

Sections affected: International and Large Business Directorate, Small and Medium Enterprises Directorate, GST/HST and Digital Compliance Directorate, High Net Worth Compliance Directorate, Business Tax Incentives Directorate (formerly Scientific Research and Experimental Development Directorate) and Criminal Investigations Directorate – Illicit Income Audit Program

Subject: Guidance on the appropriate use of signatures

The purpose of this communiqué is to introduce and outline the policy on the appropriate use of signatures, including electronic signatures (e-signatures), while administering or enforcing the Income Tax Act (ITA), Excise Tax Act (ETA) and other Acts of Parliament administered by the Canada Revenue Agency (CRA).

This policy applies to CRA officials working in programs across the Compliance Programs Branch (CRA-CPB officials).

Background

In accordance with subsection 244(13) of the ITA and subsection 335(8) of the ETA, there is no obligation for the CRA to issue signed documents if all of the required information is contained on the document to support its authenticity, unless the manner in which the document is to be issued is otherwise required by law.

However, a signature may provide assurance to the recipient that the document is authentic or it may assist in verifying a document for evidentiary purposes. A signature can also provide assurance that the person has the delegated authority to approve the document. For these reasons, a signature is recommended in certain situations. Whether a signature is paper-based or electronic, the fundamental purpose of the signature is the same. A signature links a person to a document (or transaction) and provides evidence of that person’s intent to approve or to be legally bound by its contents.

Definitions

Wet signature

A wet signature is a handwritten signature in ink on a physical piece of paper. This type of signature benefits from an evidentiary presumption in law as to who signed it. The physical nature of paper and ink also serves as evidence to enable the parties to detect alterations.

Secure electronic signature

A secure electronic signature (or digital signature) uses technology with public/private encryption to link the message’s sender to the message itself (identity authentication) and ensures that the message has not been altered or the signature forged (integrity). It includes attributes that are unique to the person using the signature, that are under the sole control of the person using it, and that are capable of verification and linked to the document or data in such a way that if the document or data are changed, the signature is invalidated. For further clarity, signature images and clipart are not considered secure electronic signatures.

A secure electronic signature must:

  • provide identity authentication of the signatory
  • ensure the integrity of the signed document
  • be affixed to the document by the signatory

A secure electronic signature is created within the Portable Document Format (PDF) software used to create and edit the document (such as Adobe or Foxit), and is supported by an approved encryption software. Entrust is the current approved encryption software used for CRA correspondence, and secure electronic signatures at the CRA must contain the proper Entrust e-signature “stamp.” Entrust login and password credentials must be kept confidential to ensure the integrity of the signature.

Refer to: How to digitally sign your documents without scanning or printing (accessible only on the Government of Canada network) which provides instructions on how to digitally sign documents, using currently available technology, without scanning or printing.

Signature block

A signature block for correspondence is a personalized block of text appended at the end of a document. It should include the name of the CRA-CPB official along with their title, division, and tax services office or compliance directorate as appropriate. When using a signature block without an accompanying wet signature or secure electronic signature, only one blank line should be left between the complimentary closing and the signature block in order to indicate to the recipient that the document was not intended to include a signature. Refer to Annex B for an illustrative example of a signature block.

Guidance for the appropriate use of signatures

A signature block should generally be used on all internal and external CRA documents to identify the author. Consistency across audit areas and predictability for taxpayersFootnote 1 are important objectives. As such, unless the document is otherwise described below, it is preferable that only the signature block be used, and secure electronic/wet signatures not be included. Specific situations are described below to provide guidance on when to use only a signature block, and when a secure electronic/wet signature should also be included.

External general audit correspondence

All general correspondenceFootnote 2 must include a proper signature block to mitigate any concerns with respect to the authenticity of the document. For further clarity, a wet or secure electronic signature is not required. General correspondence includes:

  • correspondence addressed to a taxpayer or representative such as engagement letters, query letters, proposal letters, or final letters
  • requests for information pursuant to subsection 231.1(1) of the ITA or subsection 288(1) of the ETA

Exercising of delegated authority (excluding requirements described below)

The ITA and ETA place powers and duties on the Minister of National Revenue (Minister) and authorize the Commissioner of Revenue (Commissioner) to exercise those powers and duties. Certain of the Minister’s powers are further delegated to designated officials through administrative delegation instruments signed either by the Minister or the Commissioner. For a list of all delegated authorities, please refer to: Delegation of Ministerial powers, duties, and functions.

Generally speaking, when correspondence relating to the exercise of a delegated power is issued, only a signature block is necessary, along with the statement, “This document was approved and issued by the delegated authority named in this letter.”

However, if a role is only delegated to the audit field position of Assistant Director (AD) or higher, there is an increased risk of challenge in court (given that decisions that are only delegated to AD level or higher are generally those with increased level of sensitivity and/or responsibility). Therefore, a wet signature or secure electronic signature is to be applied to increase the evidentiary standard to correspond with the increase of risk inherent in the decision. Annex A contains types of delegated authority at the AD level or higher. The list is for illustrative purposes only and is not an exhaustive list.

Requirements for information or documents

The appropriate signature for a requirement to provide information or documents (RFI) will depend on the type of requirement being sent or served:

  1. RFIs issued pursuant to subsection 231.2(1) of the ITA or subsection 289(1) of the ETA:
    1. RFIs sent to financial entities listed as part of the: RFI / RTP Financial Institution Contacts - CNWS list (accessible only on the Government of Canada network) should use only a signature block and a statement, “This document was approved and issued by the delegated authority named in this letter.
    2. RFIs sent to all other recipients must use a wet signature or a secure electronic signature given that the authenticity of the RFI may be challenged by the recipient, and there are legal consequences for refusal to comply under section 231.7 of the ITA or section 289.1 of the ETA.
  2. Requirements to provide foreign-based information or documents issued pursuant to subsection 231.6(2) of the ITA or subsection 292(2) of the ETA must use a wet signature or a secure electronic signature.

Audit agreements

An audit agreement, as outlined in detail in the communiqué AD-19-01 – Audit Agreement and Waiver of Objection Rights Guidelines, must be fully documented and signed by both the taxpayer and the auditor and countersigned by the team leader and section manager, with a finalized copy containing all signatures provided to the taxpayer.

The signatures applied to the audit agreement by the auditor, team leader and section manager must be either a wet signature or secure electronic signature.

Internal documents

Internal correspondence, including memorandums included in the Integras audit file that are not outward facing (even though they may be released under the Informal Disclosure Guidelines or the right to Access to Information and Privacy), do not require a wet or secure electronic signature; however, they must include a signature block for author identification purposes.

Internal reports such as audit reports or penalty reports do not require a wet or secure electronic signature, but should include the name and title of the CRA-CPB official and supervisor to identify the author and approverFootnote 3 .

Questions

Please direct any questions relating to this communiqué to your functional program contact within Headquarters.

Issued by:

The Policy and Technical Working Group on behalf of all Directorates

within the Compliance Programs Branch, under the authority of the Directors General of all Directorates within the Compliance Programs Branch

Circulate to:

  • Regional Directors of Programs
  • Assistant Directors of Audit
  • Regional Program Advisors
  • Directors General, International and Large Business Directorate, Small and Medium Enterprises Directorate, GST/HST and Digital Compliance Directorate, High Net Worth Compliance Directorate, Scientific Research and Experimental Development Directorate (Business Tax Incentives Directorate), Criminal Investigations Directorate, and Compliance Services Directorate

Annex A: Examples of Delegated Authority to an Audit Field Position at the level of an Assistant Director or higher

For illustrative purposes only, this is not an exhaustive list.

Annex A: Examples of Delegated Authority to an Audit Field Position at the level of an Assistant Director or higher
ITA Delegation ITA Reference ETA Delegation ETA Reference
n/a n/a May give written consent allowing a financial institution to alter its attribution method or substitute it with another method. Subsection 141.02(17)
Preassessment refund - May, before sending a notice of assessment, refund all or part of any amount claimed in the return as an overpayment for the year Paragraph 164(1)(a) n/a n/a
May make an ex parte application to a judge to allow an authorized officer entry into a dwelling place. Subsection 231.1(3) May make an ex parte application to enter a dwelling house. Subsection 288(3)
May make an ex parte application to a judge to require a third party to provide information or documentation. Subsection 231.2(3) May make an application to obtain an authorization from a judge to require a third party to provide information or documents relating to an unnamed person or a group of unnamed persons. Subsection 289(3)
May apply for a court order requiring a person to provide any access, assistance, information or document sought under section 231.1 or 231.2 Subsection 231.7(1) May apply for a court order requiring a person to provide any access, assistance, information or document sought under section 288 or 289. Subsection 289.1(1)
Transfer Pricing - May determine the circumstances under which an adjustment under subsection 247(2) is appropriate. Subsection 247(10) n/a n/a
May authorize a form, the information to be given on a form or the manner of filing a form and the manner of making or filing an election. Subsection 248(1) – Definition of “prescribed” May authorize a form or the manner of filing a form, and specify the information to be given on or with a form. Section 123 – Definition of “prescribed”

Annex B: Example of a Signature Block

A signature block of a CRA-CPB official should include their name along with their title, division, and tax services office or compliance directorate as appropriate, as shown in the template below:

[Name of CRA-CPB official]
[Title of CRA-CPB official]
[Division of CRA-CPB official]
[Tax services office or compliance directorate name of CRA-CPB official]

Note that other identifying information such as e-mail address or telephone number may also be added by the CRA-CPB official.


Footnotes

Footnote 1

For the purpose of this communiqué, the term taxpayer also includes a GST/HST registrant, a GST/HST claimant, a Scientific Research and Experimental Development (SR&ED) claimant, and a Film and Media Tax Credits (FMTC) claimant.

Return to footnote1 referrer

Footnote 2

Including general correspondence sent through the business-to-CRA secure electronic portal, by mail or hand-delivered. General correspondence excludes correspondence sent to other jurisdictions under treaty or other similar agreements by the International Collaboration and Exchange of Information Division (ICEID) within the High Net Worth Compliance Directorate. For further guidance related to ICEID, please consult with the HQ program function.

Return to footnote2 referrer

Footnote 3

Since it is possible to have more than one approved copy of a report in Integras, it is the responsibility of the reader/user to ensure that the correct version of the report is being used at any particular point in time.

Return to footnote3 referrer


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Date modified:
2024-10-30