Report on Plans and Priorities 2014–15

Program: Assessment of returns and payment processing

Program description

Our activities in assessment of returns and payment processing 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 the information provided for correctness. We detect non-compliance through risk assessment and third-party data matching.

Budgetary financial resources (dollars)

2014-15 Main Estimates	2014-15 planned spending Footnote 1	2015-16 planned spending Footnote 1	2016-17 planned spending Footnote 1
597,018,261	598,411,852	619,375,174	613,033,592

Human resources
(full-time equivalents)

2014-15	2015-16	2016-17
6,671	6,735	6,679

What we want to achieve

To provide online services with a view to making it easier for individuals and businesses to file their tax returns, make payments, and apply for benefits online, accurately, and on a timely basis. To deliver efficient and effective high-volume assessment and processing of individual and business tax returns and payments.

Strategic context

An increasing number of Canadians choose to file returns and make payments online. In 2013, 76% of individuals filed their T1 tax return electronically, and 70% of corporations used online filing for their corporate tax returns. In the same period, My Business Account, our secure online portal for business transactions, registered a 76% increase in annual transactions. Our online filing and payment services are essential to reducing red tape for business and continual improvement in services to Canadians. Canadians want services to be easy to access and use, and they want online services to be comprehensive so that they can self-serve when and where they choose. We are responding to the need to design online services that are convenient and simple to use, while maintaining the high level of security and reliability that has always been the CRA's top priority.

Online services help the CRA to meet its efficiency objectives while responding to taxpayers' expectations. We are able to process electronic returns and payments faster, and at less cost, than traditional paper options. Often, electronic services result in fewer errors because there are fewer manual steps. However, we recognize that not all Canadians prefer online service options. It is our responsibility to make sure that taxpayers have the services they need to comply. We will maintain traditional alternatives for those who choose to use them, and develop tailored support for groups like seniors, first time filers and new Canadians, who may have unique needs.

Individual returns and payment processing

Budgetary financial resources (dollars)

2014-15 planned spending	2015-16 planned spending	2016-17 planned spending
315,235,616	338,539,478	335,694,604

Human resources
(full-time equivalents)

2014-15	2015-16	2016-17
4,329	4,425	4,430

Each year, the CRA assesses more than 27 million income tax and benefit returns for individuals. 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 tax system and Canada's revenue base is protected.

e-services

The CRA has established a strong foundation in e-services and will continue to expand the range of functions which taxpayers and representatives can do online. We also work to make these services as simple and intuitive as possible. Secure online services offer taxpayers the convenient option of filing tax returns and making payments electronically. These improvements respond to taxpayers needs and are key to delivering services in a cost-effective way.

For taxpayers who interact with us frequently, our current My Account portals work best, and their use continues to grow. We are carrying out plans to e-enable a number of services not available online at this time so that taxpayers can view more of their account information and conduct more transactions online.

Improving our online services is not only about making existing information and transactions available online but also about envisioning new services to make it easier and faster for taxpayers to meet their tax obligations. For example, we will improve our secure online portals by adding new and innovative electronic options for people to submit documents, to receive notices and information, and to make payments.

Over the planning period, we will:

• introduce Visa Debit electronic payment options in My Payment e-service
• remove electronic filing exclusions for individual returns, such as prior-year returns

Income tax systems renewal

Our systems are essential for the assessment, processing and matching of the millions of personal income tax returns received each year. Our activities provide Canada, the provinces, and the territories with their principal source of revenue, representing approximately $160 billion in administered revenues annually.

The CRA's personal income tax systems will be redesigned and updated to unify the 30-year old income tax assessing and accounting systems. The project will create a strong, flexible, and resilient foundation for the personal income tax program and position the CRA to achieve its longer term goals (for example, expanding e-services).

Over the planning period, we will:

• redesign the matching of personal income tax returns
• create foundational components for initial assessments and reassessments
• redesign individual tax accounting

Detect and correct

Although quality service helps to promote compliance, there are some instances where individuals and businesses either unintentionally or intentionally fail to fully comply. Our robust system of checks and controls includes both prevention and detection.

We analyze tax returns to find common errors, like an amount placed on the wrong line, and to detect gaps in information or services. We also catch inadmissible claims through an initial review of tax credits and amounts claimed. Finding and fixing errors as part of our early intervention program 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 and overpayments for taxpayers, and adjust income tax returns to reflect the benefits in their favour.

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 assessments. If we can address non-compliance before the behaviour escalates or becomes habitual, we can reduce the need for subsequent enforcement actions.

Over the planning period, we will:

• continue to optimize our compliance activities on individual tax returns to ensure comprehensive review coverage at an affordable cost
• explore new methodologies such as analytics, which combines business expertise with advanced technologies to identify underlying relationships between data and areas of risk
• enhance our use of analytical tools to identify new risk criteria for all individual compliance programs

Business returns and payment processing

Budgetary financial resources (dollars)

2014-15 planned spending	2015-16 planned spending	2016-17 planned spending
283,176,236	280,835,696	277,338,988

Human resources
(full-time equivalents)

2014-15	2015-16	2016-17
2,342	2,310	2,249

We process about 2.1 million corporate income tax returns and over seven million GST/HST returns. Revenu Québec is responsible for administering the GST/HST in Quebec in return for financial compensation from the Government of Canada. We will continue to ensure that the administration of the GST/HST in Quebec complies with the terms of the agreement and that GST/HST funds are identified and collected.

Our My Business Account is a secure online portal for business owners to have immediate access to their information and to manage various business accounts including GST/HST, payroll, corporation income taxes, excise taxes, and excise duties.

This portal is important for business owners who want to monitor their tax affairs closely. For instance, businesses can now sign up to receive their notice of assessment and reassessment through My Business Account. We are also opening up new avenues to pay taxes, for example, through electronic pre-authorized debit.

My Business Account is at the centre of our strategy to empower business owners and to reduce the cost, time, and effort which goes into complying with Canada's tax laws. We are making service improvements to this portal to deliver on the needs and expectations of business owners.

Over the planning period, we will:

• introduce e-delivery to Represent a Client
• release a CRA mobile application for Small and Medium Enterprises (SMEs)
• redesign the My Business Account welcome page to highlight available options
• implement pre-authorized debits for businesses

Business number

Voluntary compliance and self-assessment form the basis of the CRA tax administration and are facilitated by helping businesses to comply with their registration requirements. Introduced in 1994 to simplify business interaction with the CRA for its core tax programs, the Business Number (BN) is now voluntarily used as the common business identifier for multiple levels of government. A common business identifier is a critical enabler for tailored service access, a single electronic account, and enhanced service delivery for business.

Over the planning period, we will:

• continue to work with other federal departments, provinces, territories, and municipalities in the BN partnership to improve its online business registration service and to enhance the business representative authorization process

Conclusion

We will improve service to Canadians and reduce red tape by making our e-services easier to use, and by introducing new e-services that allow individuals and businesses to self-serve when and where they choose. We will ensure that we respond to the needs of all Canadians by maintaining traditional alternatives to e-services and developing tailored support for taxpayer segments that need it. We will improve the ability of our compliance activities to detect and correct errors early in the reporting process, helping taxpayers to get it right from the start and reducing the need for subsequent, often more costly, enforcement actions.

Strategic outcome: Taxpayers meet their obligations and Canada's revenue base is protected

We use the following expected results and performance indicators to assess whether we are meeting our overall strategic outcome.

Program: Assessment of returns and payment processing

Expected results: Individuals, businesses and registrants are provided timely and accurate tax assessment notices and tax payment processing

Performance indicators	Targets	Date to be achieved
Processing T1 individual income tax returns (paper) within an average of four to six weeks	100%	March 2015
Processing T1 individual income tax returns (electronic) within an average of two weeks of receipt	100%	March 2015
Processing T3 trust returns within four months	95%	March 2015
Responding to taxpayer-requested adjustments (T1) within an average of two weeks (electronic)	100%	March 2015
Responding to taxpayer-requested adjustments (T1) within an average of eight weeks (paper)	100%	March 2015
Processing T2 corporation income tax returns (paper) in 90 calendar days or less	90%	March 2015
Processing T2 corporation income tax returns (electronic) in 45 calendar days or less	90%	March 2015
Processing GST/HST returns within 30 calendar days of receipt	95%	March 2015
Processing excise tax, excise duty, softwood lumber returns, and air travellers' security charge returns in 60 calendar days or less of receipt	95%	March 2015

Sub-program: Individual returns and payment processing

Expected results: Individual taxfilers receive timely and accurate assessment notices

Performance indicators	Targets	Date to be achieved
Percentage of individual (T1) returns processed accurately	98%	March 2015
Percentage of individual (T1) returns received on time processed by mid-June	98%	March 2015

Expected results: Individuals file electronically

Performance indicators	Targets	Date to be achieved
Individual (T1) electronic filing rates	80%	March 2015

Expected results: Validation activities detect and address non-compliance by individuals with the reporting requirements of the acts

Performance indicators	Targets	Date to be achieved
Percentage of planned validation reviews of individual returns (T1) completed	100%	March 2015
Ratio of average dollar value assessed for targeted vs. random reviews	Minimum ratio of 2:1	March 2015

Sub-program: Business returns and payment processing

Expected results: Business taxfilers receive timely and accurate assessment notices and payment processing

Performance indicators	Targets	Date to be achieved
Percentage of T2 returns processed accurately	98%	March 2015

Expected results: Remittances of payments to the Receiver General are processed on time

Performance indicators	Targets	Date to be achieved
Percentage of payments to the Receiver General deposited within 24 hours of receipt	96%	March 2015

Date modified:

2014-03-06