On our last blog, we covered the first 2 program branches – Assessment, Benefit and Service Branch and the Compliance Programs Branch.

On this blog, we’ll take a look at the last 3 Program Branches of the CRA and their respective responsibilities.

1. Collections and Verification Branch is responsible for:
   • Performing statistical analysis, data mining and research to identify compliance risks
   • Validating information contained in returns and reassessment requests through the review of income amounts, deductions and credits to ensure correct reporting
   • Examining books and records of employers and GST/HST registrants
   • Identifying non-filers and deploying of appropriate compliance treatments
   • Collecting outstanding debts
2. Appeals Branch is responsible for:
   • Reviewing taxpayers’ objections to assessments relating to income tax, GST/HST, benefits and credits and charities and confirming or reversing the assessments
   • Making decisions on the insurability and pensionability of employees’ income relating to the Canada Pension Plan and Emloyment Insurance
   • Providing relief to taxpayers by reviewing their requests to cancel or waive interest and penalties
   • Resolves service complaints
   • Provides assistance to Members of Parliament to resolve their constituent’s tax issues or emergency tax situations
3. Legislative Policy and Regulatory Affairs Branch is responsible for:
   • The interpretation of tax and benefits related legislation

We hope we have provided you with a better understanding of how the organizational structure of the CRA works. If you are having issues with regards to dealing with the CRA, please contact KD. We will be happy to help you out!

Source: https://www.canada.ca/en/revenue-agency.html

As mentioned in our previous blog on the Different Departments in the CRA, there are 5 Program Branches which provide policy and technical support to individuals and businesses through the CRA’s tax service offices and regional tax centres.

We will briefly discuss each Program Branch’s responsibilities here.

1. Assessment, Benefit and Service Branch is responsible for:

• Processing individual and corporate tax returns as well as GST/HST and Trust returns
• Administering Federal and Provincial / Territorial benefits and credits
• Managing the CRA’s E-services including My Account, My Business Account and Represent a Client
• Managing Call Centres including the Individual Income Tax enquiries, Benefits enquiries, Business enquiries and e-Services helpdesk
• Sending out correspondences including Notices of Assessment and Reassessment, Employer-related correspondence, GST/HST Notices and Cheques and Corporation Notice of Assessment
• Conducting outreach to specific taxpayer segments to support voluntary compliance

2. Compliance Programs Branch is responsible for:

• Supporting compliance through outreach, service and education
• Collaborating with tax professionals, provincial and territorial governments to clarify rules and ensure efficient administration
• Developing business intelligence, gathering data and risk scoring to select the optimal files
• Conducting audits and delivering an expanding range of non-audit treatments including industry campaigns, support visits and criminal investigations to correct non-compliance

We’ll look at the other 3 Program Branches and their responsibilities on part 2 of our blog series so please check back soon!

Source: https://www.canada.ca/en/revenue-agency.html

Under the Commissioner and Chief Executive Officer, there are 12 headquarter branches and 5 regional branches.

5 of these headquarter branches are Program Branches, which provide policy and technical support to individuals and businesses through the CRA’s tax service offices and regional tax centres.

These 5 program branches include:

• Assessment, Benefit and Service
• Compliance programs
• Collections and Verification Branch
• Appeals
• Legislative Policy and Regulatory Affairs

7 of the remaining headquarter branches are corporate support branches such as finance and human resources management.

The 5 regional branches are responsible for the establishment of program policies and procedures in their respective regions. These branches are led by a Regional Assistant Commissioner.

The CRA operates 51 local tax services offices and regional tax centres. Tax services offices deliver excise (HST/GST) and income tax programs including audit, collections, payroll compliance and appeals. Regional tax centres, on the other hand, are primarily tasked with processing individual and corporate income tax, GST, other returns and payments and delivering benefits programs.

Source: https://www.canada.ca/en/revenue-agency.html

So I have written a few blogs that discuss receipts and documentation. In every one I have said never, never, ever send the CRA original documentation.

As an auditor I reviewed lots of documents, and never demanded originals. I would ask for originals if the copies were hard to read and relevant, but most of the time, copies were more than adequate.

Recently, I have encountered CRA personnel who emphatically insist that I or my clients MUST provide original documents and that copies are not acceptable. So I perused the CRA website and the Income Tax Act looking for ammunition with which to defend my clients. I was unable to find anything that I could throw back at the auditors saying photocopies are acceptable. This, to say the least, was very discouraging. Then I used my head and talked to some friends at CRA. One astute individual said “why don’t you check the audit manual”.

Now, being smarter than the average bear, I made sure to keep a copy before I left the CRA. Guess what? Here is what the audit manual says about documentation.

10.5.4 Direct Evidence — Documentary

Direct evidence may be documentary such as a letter written by the accused containing a statement that the return was false. Documentary evidence may be primary — the original document, or secondary — a copy of the testimony of a witness who has read the document. Generally it is considered stronger than oral evidence. It is, for example, often prepared by or with the involvement of relatively disinterested parties including customers, suppliers and employees.

Copies of documents are usually considered acceptable; however, if there is any doubt about a document’s authenticity, the original should be obtained.

It is always easier to argue with the CRA if you have legislation or something in writing. It is even better if you can quote the CRA’s own audit manual.

I don’t usually tell auditors and staff that I worked for the CRA, because I like to keep that card in my back pocket until I need it. I like to see what type of person I am dealing with. You learn way more about people when they think that they hold all the cards (or at least all the aces). This is going to be one of those times.

From now on, when they ask for originals, I am going to ask why photocopies aren’t good enough, just to see what they say. Then when they are done BS’ing me I am going to say “hmmm, that’s funny, the audit manual says …. In section 10.5.4”. I guess photocopies will be ok (the joker always beats aces, <insert maniacal laugh here>).

The CRA employs a number of ways to select an income tax return for review. It could be by random selection or comparison of information returns to information received from third-party sources or types of deductions or credits claimed and an individuals review history.

It is important to know that whether you filed your tax return on paper or electronically, there is always fair chance that your return will be selected for review.

The CRA processes millions of tax returns a year and most of these are done without conducting a manual review of the information reported so that a Notice of Assessment and refund can be issued as quickly as possible. However, the CRA screens all returns through the computer system.

It is, therefore, important that we keep all our receipts and supporting documents for at least six years. We will never know when that review will come so it is always better to be prepared.

The CRA`s review program includes the following:

• Pre-assessment Review Program. The reviews conducted during this program take place before a Notice of Assessment is issued. The peak period for this program is February to July.
• Processing Review Program. The reviews for this program take place after the Notice of Assessment is issued. The peak period for this program is August to December.
• Matching Program. In this program, information on an individual`s tax return is compared to the information provided by third-party sources. The peak period for this program is October to March.
• Special Assessments Program. This program conducts a more in-depth review of the income tax returns to identify areas of non-compliance.

Source: CRA website