Ellen, a management consultant in Barrie, Ont., sent in her taxes electronically on March 9. On July 31, she was still waiting for the Canada Revenue Agency (CRA) to process her return.
On its website, the CRA says it aims to issue a notice of assessment within two weeks of receiving a digital individual income tax return and within eight weeks of receiving a paper return. It also says it has a goal of meeting that standard 95 per cent of the time.
“You see 95 per cent and you think you’re going to fall into that good number,” Ellen, who asked to be identified only by her first name, told Global News. This year, however, “I guess my ticket came up.”
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There was nothing remarkable in her return, she said. She claimed self-employment income and tax credits for a home office and business use of her car, but that was no different from what she had been claiming for the past several years. And her expected tax refund was under $2,500. And yet, she said, her notice of assessment wouldn’t show up.
In almost five months since filing her taxes, there was “not a peep out of CRA … never any correspondence.” And when she called the agency, the answer, she said, would always be “wait.”
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Eventually, though, an agent did tell her that her return had been selected for random review, although the CRA never asked her for more information or additional documents, she said.
She also said she started hearing repeatedly about processing delays due to backlogs.
Global News has received similar accounts from taxpayers who say CRA agents have blamed delays and missed deadlines on excessive workload.
The CRA told Global News via email it is “currently experiencing higher than normal volumes of work in the review programs.” The agency also said that it has “shifted workloads across various sites to maximize efficiencies.”
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For example, the tax processing centre in St. John’s has now been converted into a National Verification and Collections Centre.
Still, “the vast majority of the files are being processed within the expected time frames,” the CRA added. “In some cases, it can take longer to complete a file because of the complexity of the issue under review.”
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The implication of a tax pre-assessment
Delays in receiving a notice of assessment often happen when the CRA conducts a so-called pre-assessment review.
One of three types of tax review, pre-assessments usually take place between February and July, according to Get Smart About Money (GSAM), a financial literacy website maintained by the Ontario Securities Commission. Essentially, the CRA decides to take a closer look at the deductions and credits you claimed before formally assessing your return.
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A processing review is similar to a pre-assessment but happens after the CRA has sent out a preliminary notice of assessment, according to GSAM. They usually take place between June and November.
A matching review also happens after the CRA sends you a notice of assessment. The process entails the CRA comparing the information on your return with that provided by third parties like your employer or your bank. These reviews usually take place between September and March.
Pre-assessments can delay your tax refund but they do not usually result in a cutoff of government benefits, such as the Canada Child Tax Benefit (CCTB), the Guaranteed Income Supplement (GIS) or the Ontario Trillium Benefit, said Lisa Gittens, senior tax professional at H&R Block Canada.
Unless you’ve failed to respond to CRA questions about your return, your benefits will continue to flow at the rate set by your previous tax return, Gittens added. If the CRA later assesses that you should be receiving smaller amounts (for example, because your income went up), you may have to pay something back, she added.
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Taxpayers who haven’t yet received a notice of assessment, “should not panic,” she added.
Still, Gittens said it was “very unusual” for someone to have filed a return as early as March 9 and not have received an assessment by the end of April.
It was even more unusual for the CRA not to communicate with a taxpayer whose return is under review.
The CRA told Global News that “to minimize the delay of returns, the majority of reviews are performed after the Notice of Assessment has been issued.”
Six hours on the phone with the CRA
Ellen said her main concern isn’t about the fact that her return was singled out for review or that the CRA missed several self-imposed deadlines when dealing with her files.
“Delays happen, I get that,” she told Global News.
But she is upset about the lack of communication. Being able to get through to a human being on the phone was a challenge, she said. And when she did get hold of an agent, she would end up being on the phone for between 30 and 50 minutes for every call.
On the whole, she estimates she has spent six hours on the phone with the CRA.
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“The story was consistently that there is a backlog,” she said. But if that is the case, she adds, “they should have advised Canadians.”
On Aug. 3, shortly after Global News flagged Ellen’s case to the CRA, she said she received an electronic notice saying that her notice of assessment would become available on Aug. 14.
According to her electronic files, Ellen said it appears the CRA found small Canada Pension Plan (CPP) and Employment Insurance (EI) overpayments and will be paying her $18.90 in interest charges. The agency has flagged no errors so far.