Our 2007-2008 Results

Our Program Activities

Appeals (PA5)

Overview

Our Appeals program activity administers one of the Government of Canada’s largest dispute resolution services. We strive to provide taxpayers with a fair and timely dispute resolution process that respects Canadians’ fundamental rights to redress in their dealings with Canada’s tax system.

Taxpayers can dispute assessments and determinations pertaining to income tax and commodity taxes, as well as CPP/EI assessments and rulings. If taxpayers are not satisfied with the results of our review process, they can then appeal to the courts.

This program activity also manages the administration of the Taxpayer Relief Provisions, as well as our Taxpayer Service Complaints Program.

We carry out the Appeals program activity to achieve the following expected result.

Our Measure: Impartiality

Our aim is to ensure that all taxpayers have access to impartial redress. To achieve impartiality, we believe our dispute resolution process must demonstrate high levels of transparency, consistency, and accessibility.

We use quality assurance to measure transparency for our income tax and commodity tax dispute resolution activities, and we measure the consistency of our activities in these two areas, as well as in our CPP/EI activities. Using sampling methods, our quality assurance review covered our dispute resolution activities across Canada to assess performance against our targets.

With regard to consistency, our 2007-2008 quality assurance review found that we reviewed, researched, and addressed issues under dispute; applied the law correctly and impartially; provided taxpayers with an opportunity to respond to our decision; and derived an acceptable resolution in the vast majority of cases. As reported in our Performance Report Card, the results of 99.5% for income tax and 99.4% for CPP/EI exceeded our targets, while our 95.4% performance in commodity taxes fell slightly short of our 97% target.

In addition, our 2007-2008 review found that all relevant information supporting issues under dispute—including auditor records, but excluding information held in confidence under governing legislation—was made available to the taxpayer under the transparency criteria 99.6% of the time for income tax and 99.2% of the time for commodity tax cases. Although these results do not quite meet our ambitious 100% targets, we believe that the results demonstrate the transparency of our dispute resolution processes. We think that our current transparency performance targets exceed taxpayer expectations and have been revised for the coming years to more appropriate levels.

Another key aspect of our commitment to fairness is our mandate to consider relief to taxpayers through the Taxpayer Relief Provisions contained in the various acts we administer.

The enhancements we made to our services for Canadians included the introduction of an electronic Taxpayer Relief Application form on our Web site. This added convenience increases the accessibility for taxpayers to apply for relief, which we believe contributes to our goal of improving consistency in our service for all taxpayers.

We are also developing a new system to assist in the administration of the Taxpayer Relief Provisions.

Originally scheduled for implementation in April 2008, the release is now scheduled for April 2009. The new system will better track and manage requests for Taxpayer Relief Provisions throughout our organization to improve our reporting and analysis capabilities. This will ultimately provide Canadians with enhanced consistency in the management of Taxpayer Relief Provisions.

Accessibility to redress was made easier this year with enhancements to our Web site. With the guidance provided as part of the online format, the taxpayer is assisted in registering his or her dispute.

We believe that these results, taken together, contributed to improvements in the areas of transparency, consistency, and accessibility.

Our Measure: Timeliness

When taxpayers file a notice of dispute, our Appeals timeliness service standard aims to ensure that we notify them of receipt of their dispute within 30 days at least 85% of the time.

A 27.7% increase in total intake of disputes impeded our ability to meet our service standard in 2007-2008. The 84% result we achieved was slightly below our target of 85% and a decline in performance from previous years.

In 2007-2008, our intake of income tax disputes increased by 31.5% over 2006-2007. This rise was mostly attributable to the results of CRA’s focus on aggressive tax planning and other audit priorities (see PA4 on ). The success in detecting a significantly higher level of reporting non-compliance meant that the average time to resolve the resulting disputes rose to 141 days (see Figure 22). Overall, we met three of the four timeliness targets that we had in place for our income tax dispute workloads, representing more than 80% of the total number of disputes resolved. The results of this increased audit activity also produced a slight increase (two days) in the average age of our workable income tax dispute inventory. In light of the nature of the new files in dispute, we do not consider this slight increase to be a material movement from the result achieved in 2006-2007.

Commodity tax disputes include primarily GST/HST issues, as well as issues concerning other excise taxes, levies, and rebates. In 2007-2008, our commodity tax intake was 24.7% greater than in 2006-2007. We believe that the increase in intake was largely the result of changes made to our GST/HST processing system. On average, we took 169 workable days to resolve disputes for commodity taxes, about the same as in 2006-2007; however, the average age of workable inventory increased to 204 days.

Figure 22 Average Time to Resolve Disputes

More favourably, the average time to resolve CPP/EI files decreased from 203 days in 2006-2007 to 123 days in 2007-2008. Our CPP/EI dispute resolution results benefited both from the 24% reduction in intake from 2006-2007 and from increased Government of Canada funding to address this work. The average age of the workable inventory was also reduced to 70 days from 80 days in 2006-2007.

In our Report Card on , we report a N/A (not applicable) rating for our timeliness performance in CPP/EI. This rating reflects the review of timeliness performance objectives that was undertaken in 2007-2008.

Overall, these results demonstrate that we have made progress in better managing our Appeals program activity, but we continue to seek further opportunities for improvement.

Performance Report Card

Impartiality

Timeliness

Date modified:

2009-01-29