In our first article in this series, we argued that while the number of current non-filers may not be as large as some popular estimates, the number is still very large and represents a serious drag on achieving the federal government’s poverty reduction objectives. In this second and the next article, we show how the Canada Revenue Agency (CRA) could make better use of the CVITP to reduce the number of non-filers more effectively than its current efforts.
This second article deals with recent non-filers, those who forget to file, file late, or skip one or two tax years. Most importantly, the CRA can still communicate with these clients as it has their current mailing addresses.
We focus on two initiatives. The non-filers benefit letter campaign has been operating since 2016. (We have previously reviewed this initiative here.) We suggest providing letter recipients with the name, address and phone number of the closest CVITP host organization where they can get their returns done for free, and informing these organizations of the names and addresses of letter recipients who have been referred to them. This may improve the rate at which letter recipients, most of whom are recent non-filers, respond.
The automatic filing of income tax and benefit returns will be experimented with starting next year. (We recently reviewed this new initiative here.) Some traditional CVITP clients may receive a pre-populated return from the CRA to review and send back, confirming the information contained in the return is complete and accurate. Should they have any questions about their return or the process, some clients receiving such a return may not own a phone with which to call the CRA. Others may not trust the CRA to provide clear answers to their questions. Yet again others may not understand what is being asked of them. To increase the success of this initiative, we recommend involving CVITP host organizations and their volunteers to help answer questions these clients may have. While these clients are unlikely to be non-filers, if this initiative is successful, it will reduce the number of traditional CVITP clients thereby freeing up CVITP capacity to take on new clients, some of whom may not have filed a return in many years.
Neither of these initiatives is likely to substantially reduce the number of what we call chronic non-filers who make up the majority of non-filers. The CRA’s chief problem is that it does not have current mailing addresses for these clients. Therefore, it has no way of communicating directly with them. Yet this is the group the CRA should be trying to make inroads with if it is to substantially increase its coverage of poverty reducing benefits. We believe the CRA could also make use of the CVITP to reduce the number of chronic non-filers. This will be the subject of the third and final article in this series.
