Ombudsman Wants Explanations

The Taxpayer’s Ombudsman recently released a report entitled “The Right To Know” in which he condemned the CRA’s practice of not always fully explaining the decisions of the Appeals Branch. The Ombudsman recommended that CRA adopt a process whereby taxpayers will be given basic information as to how the decision was made, including an explanation of the facts and an application of the law to those facts.

Although the report only related to decisions of the Appeals Branch, the Ombudsman’s recommendation should be applied whenever any department in CRA makes a decision. As a tax lawyer, it is quite common to encounter clients who receive a letter from CRA with boilerplate wording, followed by a quick sentence containing the decision. Not only are these generic letters frustrating, they are also inefficient as it generally requires an additional appeal to be filed before the reasoning is provided.

In my experience, the areas where CRA provides the least explanation for their decisions are:
• Responses to taxpayer relief requests,
• Decisions relating to Child Tax Benefits/GST credits, and
• CPP/EI rulings.

The Minister of National Revenue has issued a statement that the CRA will develop a plan of action to implement the Ombudsman’s recommendations. I will keep track of this and will post any new updates.