On June 23, 2020, the CRA released its National Business Resumption Plan (the “NBRP”) for CRA employees. This follows the CRA’s previous announcement that it would be transitioning from a critical services mode to a business resumption mode on June 26, 2020. The NBRP serves as a guide for the CRA’s business resumption transition, though it will no doubt be subject to change over the coming weeks and months. Furthermore, the CRA re-emphasized its prior statements that the transition to full business resumption will be gradual and that its employees will not all return to work right away.
The NBRP outlines the CRA’s approach to business resumption, with an emphasis that it is a live draft and expected to change as public health and economic circumstances change over time. Importantly, the CRA notes that any programs or activities scheduled to resume after August 2020 are not yet confirmed and remain subject to change.
Of particular importance for taxpayers with ongoing or anticipated tax disputes with the CRA are the statements in the NBRP relating to the CRA’s audit, appeals, and collections activities and programs, which are outlined below.
Under the National COVID-19 Business Continuity Plan (the “BCP”), the CRA was already active in some “high-risk” work, including high risk audits, international and large business audits, and criminal investigations. In addition, under the NBRP, the CRA is expected to resume High Net Worth Compliance Programs, the full GST/HST Refund Integrity program, and the GST/HST Large Business program by August 2020.
Several programs are not anticipated to start until September 2020 or later, including:
- small and medium income tax and GST/HST programs;
- the Medium Business Audits Program;
- the Complex Transactions Program;
- the Non-Resident Audit Program (Income Tax);
- medium GST/HST audits with the exception of audits in the MUSH (Municipalities, Universities, Schools and Hospitals) sector;
- small business audits (income tax and GST/HST); and
- desk audits (GST/HST) for business with gross revenue greater than $500,000 (income tax) and $250,000 (GST/HST).
The CRA’s Appeal Branch was active in a number of areas under the BCP. Under the NBRP, the CRA is set to resume by August 2020 all remaining functions in its Objections Program and Taxpayer Relief Program and all functions in relation to CPP/EI Appeals to the Minister and to the courts.
As tax practitioners, we have already noticed increased activity from the CRA, particularly in the area of taxpayer objections and appeals. We anticipate this trend to continue as the CRA resumes its activities and opens up its programs over the coming weeks and months.
Under the NBRP, the CRA will reactivate by August 2020 all Debt Management Call Centres to receive calls from taxpayers. It will also expand payment arrangement parameters to allow tax debtors more time and greater flexibility in resolving their tax debts. Insolvency officers will begin processing insolvency filings and virtually attending creditor meetings. Further, all Collections and Verification Branch programs will activate employees to receive taxpayer calls and correspondence.
Several important programs and activities are not anticipated to start until September 2020 or later, including:
- outgoing calls from Debt Management Call Centres to pursue payment arrangements;
- collections officers reconnecting with tax debtors to re-evaluate payment arrangements;
- Part XIII non-resident withholding activities;
- GST/HST Delinquent Filer’s program’s automated compliance process, including automated mailouts, assessments, and holding of refunds;
- business compliance reviews and information audits; and
- automated collections strategies, including collection letters.
The CRA’s “more traditional approach” to collection action is not expected to resume until January 2021. As noted above, that is subject to change as the situation with COVID-19 develops. Further, the CRA notes that it may, on a case-by-case basis, accelerate some collections activities to September 2020 where compliance risks exist and where the taxpayer’s situation permits earlier action.