annual report to parliament 2012-2013

[section 2: our programs]

[assessment of returns and payment processing]

[program description]

The CRA undertakes a wide range of activities to assess and process tax returns, information returns, and payments for individuals and businesses. We undertake activities that make it easier for individuals and businesses to meet their filing, reporting, and payment obligations. We assess, process, and adjust tax returns for individuals and businesses. We review information provided to find errors. We detect non-compliance through risk assessment and third-party data matching. Through these activities, we support the process of assessing tax returns from beginning to end.

2012-2013 financial resources (thousands of dollars)

Total budgetary expenditure	Planned spending (Footnote 1)	Total authorities	Actual spending (Footnote 2)	Difference
617,948	660,575	709,447	643,800	16,775

Sub-program	Planned spending (Footnote 1)	Actual spending (Footnote 2)	Difference
Individual returns and payment processing	308,438	298,365	10,073
Business returns and payment processing	209,137	203,212	5,925
GST administration in Quebec	143,000	142,223	777
Total	660,575	643,800	16,775
Numbers may not add due to rounding.

(Footnote 1): Planned spending has been restated from what was shown in the Canada Revenue Agency 2012-2013 Report on Plans and Priorities in order to distribute the real property accommodations funding (previously centralized in the internal services program) to all applicable programs. It should also be noted that planned spending excludes severance payments, parental benefits and vacation credits, as this funding is received during the fiscal year and is only included in actual spending.

(Footnote 2): This figure represents the actual spending for the program on a modified cash basis. Please refer to page 156 for an explanation of how this figure relates to the CRA Financial Statements - Agency Activities.

2012-2013 human resources (full-time equivalents)

Sub-program	Planned	Actual	Difference
Individual returns and payment processing	4,235	3,958	277
Business returns and payment processing	2,805	2,577	228
GST administration in Quebec	nil	nil	nil
Total	7,040	6,535	505
Numbers may not add due to rounding.

[sub-program description]

Individual returns and payment processing	The Individual Returns and Payment Processing Program ensures individuals have the services they require to voluntarily comply with Canada's tax laws. It processes all the information filed and payments submitted by individuals. It also assesses and validates the information and advises individuals of the results of their assessment or reassessment.
Business returns and payment processing	The Business Returns and Payment Processing Program ensures businesses have the services they require to voluntarily comply with Canada's tax laws. It processes all the information filed and payments submitted by businesses. It also assesses and validates the information and advises businesses of the results of their assessment or reassessment. The program also registers businesses in Canada for a business number, maintains account status and administers the excise programs.
GST administration in Quebec	The Goods and Services Tax Administration in Quebec Program administers both the memorandum of understanding with Revenu Québec and payments to Revenu Québec for the administration of the goods and services tax in the province of Quebec.

[performance analysis and lessons learned]

[supporting the assessment of returns and payment processing]

Filing returns and making payments should be easy. Recognizing that Canadians are increasingly turning towards online services to interact with government, we maintain portals like My Account and My Business Account so that taxpayers can manage their tax and benefit information online. Taxpayers are more likely to comply if it is easy to do so, and the services we offer make managing tax affairs and filing tax returns easy and simple.

[My Account for individuals]

We launched My Account in 2003 in response to growing demand for self-service and to allow users to take control of their data, enabling them to access their information from anywhere at any time. My Account is a secure portal that allows an individual to track their refund, view or change their return, check their benefit and credit payments and RRSP limit, change their address or phone numbers, set up direct deposit, and much more.

Key result:

• 6.7 million logins were made to My Account for individuals, an increase of 14.8% over 2011-2012. More than 546,000 individuals accessed My Account for individuals for the first time

We continually look to improve functionalities in My Account as we want to provide greater flexibility and new ways for users to manage their tax affairs. To that end, we made several improvements and added new services to My Account, including:

• the ability to request a remittance form
• the status of returns showing more clearly in the welcome page of My Account

Taxpayers and benefit recipients can view basic tax information using Quick Access. To do so, they need to confirm their identity using their social insurance number, date of birth, and information entered on their income tax and benefit returns from previous years. This service gives an individual immediate access to some of their information in My Account, such as the ability to view tax return status, RRSP deduction limit, TFSA contribution room, and the status of benefit payments.

Key result:

• Close to a million logins were made to Quick Access. More than 424,000 individuals viewed their tax information using Quick Access for the first time

[My Business Account]

My Business Account is a secure online portal that allows business owners to have immediate access to their information and to manage various business accounts such as GST/HST, payroll, corporation income taxes, excise taxes, excise duties, and more. For example, the ability to download missing tax information slips can save business owners time and aggravation. This portal is invaluable for business owners who want to monitor their tax affairs closely. Authorized representatives can also access these services through Represent a Client.

Key result:

• Close to 2.7 million logins were made to My Business Account. The number of businesses that are enrolled in My Business Account and have a business number more than doubled in the last three years

My Business Account is one of the main focuses of our strategy to empower business owners and to reduce the cost, time, and effort that go into complying with Canada's tax laws. To deliver on the needs and expectations of business owners, we made several improvements and added new services to My Business Account, including:

• The My Business Account enquiries service allows businesses to ask tax questions online related to their account and receive information they can rely on in writing. In 2012-2013, the CRA responded to almost 5,000 enquiries online
• We redesigned My Business Account welcome page to meet accessibility standards
• We added a new option in Payroll to enable small business owners to request a refund for the hiring credit for small business
• Through Manage Online Mail, business owners are now able to receive an email notification that account specific correspondence is available to view in My Business Account
• The ability to file certain GST/HST elections

[Represent a Client]

Tax preparers are playing an increasingly important role in managing tax affairs on behalf of individuals and businesses. To facilitate the work of tax preparers and make it easier to comply with Canada's tax laws, the CRA launched the secure portal Represent a Client in 2006. This was a unique service in the world at that time.

Represent a Client allows a tax preparer or a representative to access tax information and services on behalf of individuals and businesses. The representative can be a friend or family member, an owner of a business that provides tax or payroll services for clients, or an employee of a business that provides tax or payroll services.

In 2012-2013, we improved the registration process for Represent a Client by making it much easier and faster for representatives to register for the service. Representatives now require only one identifier for their dealings with the CRA on behalf of clients and family members.

Key results:

• 5,547,661 individual accounts accessed in Represent a Client
• 2,662,741 business accounts accessed in Represent a Client

[major initiative]

Taxpayers and businesses want to save time and money. The CRA is exploring ways to support the assessment of returns and payment processing that reduce paper work, reduce the number of interactions between the CRA and taxpayers, and meet taxpayers' expectations for cost-effective service from the CRA.

Our latest initiative is Submit Documents, a secure online method for taxpayers and their representatives to submit supporting documentation and receipts to the CRA. Submit Documents was implemented in 2012 for our first early adopter, the Corporation Assessing Review Program.

[Community Volunteer Income Tax Program]

Every year, thousands of eligible Canadians are getting help from volunteers of the Community Volunteer Income Tax Program (CVITP). Since filing an income tax and benefit return is essential for an individual to receive their entitled benefits, the CRA has a vested interest in supporting CVITP volunteers. As such, the CRA expects to continue to play an important role in offering training and tax software for the volunteers as well as a network of coordinators to guide community organizations as they deliver the program.

Key result:

• Volunteers completed 565,621 income tax returns on behalf of eligible Canadians

[assessing returns and payment processing]

Each year, the CRA assesses millions of tax returns for individuals and businesses. We process these returns and enter the information into our systems to update taxpayer accounts and determine the current status of their tax obligations. We then store the returns for future reference. We carry out activities to detect non-compliance both before and after tax returns are assessed. When we find errors on tax returns, we correct them. Our goal is to process returns and payments as quickly and accurately as possible so that Canadians maintain confidence in the integrity of Canada's self-assessment system and Canada's revenue base is protected.

Although we missed slightly on our service standard for processing GST/HST returns, we exceeded our targets for processing corporation income tax returns and excise tax, duty, air travellers security charge, and softwood lumber returns.

Key results:

• We assessed more than 27 million income tax and benefit returns for individuals
• We processed about 2.1 million corporation income tax returns
• We processed over 7.4 million
• GST/HST returns
• We processed more than 35 million payments
• The total value of all payments processed is approximately $436 billion

More individuals and businesses are filing and paying online because it is quicker and easier. The CRA can process electronic returns and payments faster; individuals who have previously set up direct deposit can expect to receive their refunds in as little as eight business days. Taxpayers who request electronic adjustments to their income tax and benefit returns can expect us to respond within two weeks. This compares favourably to the seven weeks we usually need to process requests submitted on paper.

We led a strong campaign to encourage individuals to file electronically during the 2013 tax-filing season. A record 76% of income tax and benefit returns were filed electronically, 11 percentage points over the percentage of income tax and benefit returns filed electronically between February 2012 and August 2012.

Key results:

• 76% of individual tax returns were filed electronically
• On average, we processed tax returns filed electronically within 11 days, compared to 30 days for tax returns filed on paper
• 64% of GST/HST returns were filed electronically, almost 7 percentage points higher than in 2011-2012
• 69.9% of corporation income tax returns were filed online, 8 percentage points higher than in 2011-2012
• The number of T4 information returns filed electronically increased by almost 21%
• The volume of payments processed electronically increased by 12%

[correct and detect]

We analyze tax returns to find errors, like an amount placed on the wrong line, and to detect non-compliance. We take note of common errors to find gaps in information or services. We also detect inadmissible claims through an initial review of tax credits and amounts claimed. Finding and fixing errors as part of our early intervention programs helps us resolve non-compliance in the least intrusive way and minimizes the risk of taxpayers paying penalties and interest.

We also identify unclaimed tax credits, benefits, and overpayments for taxpayers. Then, we adjust income tax and benefit returns to reflect the beneficial adjustments.

Key results:

• We identified $162 million in additional taxes owing on income tax and benefit returns after finding errors and reviewing
• high-risk claims
• 353,064 individuals received beneficial adjustments to their tax returns
• The average dollar amount per beneficial adjustment was $279

We continue our review of income tax and benefit returns after notices of assessment are sent. We select files and contact taxpayers to request further information to verify claims made on tax returns. We also compare the information we have from third parties with the information reported on tax returns. We review corporation income tax returns to ensure the accuracy and validity of corporation income tax return assessments.

Key results:

• We identified over $264 million in additional taxes through the review of information sent by taxpayers to verify claims made on their tax returns
• We found $715 million in additional taxes owing by matching information reported by taxpayers to information reported by third parties
• We identified $50 million in additional taxes owing on corporation income tax returns
• We found $144 million in additional taxes owing through a review of corporate loss carry forwards from prior years

Together, our efforts resulted in over $1.3 billion in additional tax assessed.

[conclusion]

More Canadians are choosing to manage their tax affairs through our online portals: My Account, My Business Account, and Represent a Client.

Although more Canadians enjoy the benefits of self-service, third parties are also playing a greater role in helping Canadians comply with Canada's tax laws.

The CRA is strengthening its relationship with tax preparers. By completing and filing income tax and benefit returns on behalf of millions of Canadians every year, tax preparers play an essential role in Canada's tax system. The CRA can help taxpayers comply by working with tax preparers to promote good compliance practices and by strengthening our support for the services they provide to their clients.

The CRA will continue to develop tools and services with a view to making filing and paying taxes easier and faster. Although online self-service will remain the preferred service option, the CRA will ensure that Canadians can still file their income tax and benefit returns on paper or ask for a remittance voucher to pay by cheque.

[performance results]

Expected results	Indicators	Targets	2010-2011	2011-2012	2012-2013
The CRA supports the timely and accurate processing of tax, information, and benefit returns, and the processing of payments	Number of successful log-ins to My Account	Upward trend	4,690,737	5,837,173	6,705,022
	Number of successful log-ins to My Business Account	Upward trend	1,240,702	1,913,141	2,664,791
	Represent a Client - Individual accounts accessed	Upward trend	3,193,919	4,522,971	5,547,661
	Represent a Client - Business accounts accessed	Upward trend	1,162,177	1,850,268	2,662,741
	Percentage of payments made electronically	Upward trend	29.7%	33.4%	36.7%
	Percentage of individuals who file electronically	Upward trend	64% (Footnote 1)	65% (Footnote 1)	76%
	Percentage of corporations that file electronically	Upward trend	46.8%	61.4%	69.9%
	Percentage of GST/HST returns filed electronically	Upward trend	41.3%	57.5%	64.3%
Individuals, businesses and registrants are provided timely and accurate tax assessment notices and tax payment processing	Process Excise Tax, Duty, Air Travellers Security Charge and Softwood Lumber returns within 90 days of receipt	95%	97.6%	98.2%	98.4%
	Process GST/HST returns within 30 days	95%	90.3%	91%	93.8%
	Process T2 corporate income tax returns within 60 days	90%	94.5%	95.2%	95.2%
	Respond to T1 taxpayer-requested adjustments within an average of 8 weeks	100%	7.2 weeks	7 weeks	7 weeks
	Respond to T1 taxpayer-requested adjustments received via the Internet within an average of 2 weeks	100%	1.8 weeks	1.8 weeks	2 weeks
	Process paper T1 individual income tax returns within an average of 4 to 6 weeks	100%	3.9 weeks	3.9 weeks	4.3 weeks
	Process electronic (EFILE, TELEFILE, NETFILE) T1 individual income tax returns within an average of 2 weeks	100%	1.7 weeks	1.6 weeks	1.6 weeks
	Processing T3 trust returns within 4 months	95%	98.5%	98.7%	98.7%
Individual taxfilers receive timely and accurate assessment notices	Percentage of the 5 service standards pertaining to individual and trust returns (T1 and T3) activities which have met targeted performance standards	100%	100%	100%	100%
	Percentage of individual (T1) returns processed accurately	98%	98.8%	98.8%	99%
	Individual (T1) returns received on time processed by mid-June	100%	100%	100%	100%
Validation activities detect and address non-compliance by individuals with the reporting requirements of the acts	Percentage of validation reviews of individual returns (T1) completed compared to planned	100%	n/a	n/a	104%
	Ratio of average dollar value assessed for targeted vs random reviews	Minimum ratio of 2:1	n/a	n/a	2.6:1
Remittance of payments by individuals and businesses to the Receiver General are processed on time	Percentage of payments by individuals and businesses to the Receiver General deposited within 24 hours of receipt	96%	99.6%	99.3%	99.4%

(Footnote 1): Results have been re-stated as they are now calculated based on the tax-filing season February 1 to August 31 versus April 1 to March 31.

n/a: This is a new indicator for 2012-2013. Prior year results are not available.

Date modified:

2013-11-06