Category Archives: Clients

Recent developments for clients

Why You Should Tell Clients the Benefit Estimates in Their Returns

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We have been advised on more than one occasion by Canada Revenue Agency (CRA) staff not to share with our CVITP clients the estimates of their benefits, provided in the return prepared by Ufile, because they are not always accurate.

On the contrary, we see two reasons why it is important to provide the estimates.

First, we have found it to be a useful check on any mistakes that we might have made.  As the client will know if the amounts differ substantially from what they have been receiving in the past, they will tell us if they think there’s something that doesn’t sound right.

Second, the client’s main motivation for filing a return is not to pay income tax as most of our clients don’t pay any income tax.  It is to maintain their benefits.  They want to know what they are going to be getting if their return is filed.  We always indicate that these are estimates only and that the CRA will provide the client with notices indicating the final amounts once their return has been processed.  Our clients usually understand this distinction.

After reviewing the results of our calculations with the client and obtaining permission to file their return, we print out the pages listing the estimated benefits and provide this to the client with the rest of their return.  The tax summary lists things like the Canada Workers Benefit and the refund which are also subject to adjustment by the CRA during processing.   So even if we took the CRA agents’ advice and did not provide the estimate of some benefits, others would still show up on their return.

For us to say to our clients that the CRA has advised us not to provide them with this information because it might not be accurate would be totally unacceptable to many of them.  It also presumes they cannot be trusted to understand the distinction between an estimate and the final amount as determined by the CRA.

We also find it strange as the reverse is not true: we are never advised to avoid sharing with our clients any amount they might owe in taxes because the calculation might not be accurate. When the CRA starts preparing automatic returns in its pilot next year, we hope that it does not follow its own advice.  This is because we believe the response rate will be lower – or at the very least the CRA will get a lot more queries from recipients – if they have not received estimates of their benefits at the same time.

Great CRA Innovations: Represent A Client

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This article describes “Represent A Client”, a new Canada Revenue Agency (CRA) innovation that we tried for the first time this year.  It gives the CVITP volunteer registered for EFILE and a representative identifier (Rep ID) access – on a read-only basis – to the client’s entire CRA Account (whether or not the client has set up their own access to it).  If the CVITP volunteer has the client’s permission, this function can be used for many things including:

  • Getting T slip information to prepare income tax and benefit returns prior to 2017;
  • Seeing the Express Notice of Assessment on the same day the return is efiled;
  • Confirming that the CRA has received a return submitted by paper; and
  • Troubleshooting a wide range of questions raised by the client.

The article also explains how the authorized CVITP volunteer can access the client’s CRA account using “Represent A Client”.

Improving Calls to the CVITP Helpline for Client Information: A Simple, Secure Proposal

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There comes a time in every volunteer’s work where they need to get on the phone with the client and call the Canada Revenue Agency (CRA) CVITP Helpline.  The Helpline is, in principle, a really good innovation which delivers expert advice efficiently.  But more frequently than we would like, we have an experience which reminds us just how incredibly difficult it can be for some clients in communicating with the CRA.  The barriers to client identification can be onerous, even for a client who is very well prepared going into the call.

Too often, the call’s success depends on the CRA agent who takes the call.  The CRA agent first needs to ascertain that the client is indeed who they say they are.  To do this, the CRA agent will ask for information on the client’s file which the client should know.  Some CRA agents appear to detect from the way they answer that the client is likely to have problems with some of these questions.  So, the CRA agent goes out of their way to permit the call to proceed.  But this is not always the case.

Where the client fails to convince the CRA agent of their identity, the CRA agent will terminate the call.  Often this results in the client being scared away from calling the CRA again.  The client may also lose faith in the competence of the volunteer, thereby damaging the reputation of the host organization.

Our article outlines a proposal which builds on the security mechanisms the CRA currently uses for the CVITP.  In addition to explaining a simple procedure which could be used to avoid the release of client information under fraudulent circumstances, we give a few considerations which should be taken into account when assessing our proposal.

Ultimately, we believe the CRA needs to place more trust in the rigorous security and confidentiality procedures it already has in place for the CVITP.  Adopting our proposal, or something very much like it, would go some way toward reducing client stress and increasing the efficient use of CRA and CVITP volunteer resources.

The Evolution of the CVITP – 2022 Update

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Canada Revenue Agency’s (CRA) recently released Departmental Results Report for fiscal year 21/22 allows us to complete the 2022 update for the evolution of the CVITP.  We have divided this subject into three short articles.  The first focuses on the results from delivering CVITP service to clients.  It includes all the data with accompanying commentary on individuals assisted, returns filed and value generated.  The second focuses on the CVITP infrastructure needed to provide this service.  It also provides all the data with accompanying commentary on host organizations and volunteers.  The third is a new feature which provides some simple measures of CVITP productivity.

Short on time?  Here are the key developments:

NO INCREASE IN CVITP SERVICE IN 2022

  • While the CRA calls the number for individuals assisted in the 2022 tax season an approximation, it is roughly the same as in the 2021 tax season; in other words, there has been no increase in service.  The 2021 tax season saw a partial rebound in numbers after the sharp decline in 2020 but it was still well below the numbers reached in 2016 and far from the peak in 2019. 
  • The trend for returns filed largely mirrors that of individuals assisted.
  • While the CVITP was making progress in filing more of its clients’ prior year returns up until and including the 2020 tax season, its performance in this area declined in 2022.
  • For the first time, the CRA has reported in its Departmental Result Report on value of the refund and benefits generated through the CVITP.  This is a very welcome development, and we hope that the CRA continues this practice in the future.  As the main rationale for offering a CVITP clinic is not to help individuals pay income tax but to help them maintain access to many poverty-reducing benefits, this figure provides tangible evidence of the real value generated for CVITP clients.

NUMBER OF HOST ORGANIZATIONS REBOUNDS BUT NUMBER OF VOLUNTEERS CONTINUES TO DECLINE

  • The number of host organizations offering CVITP service has largely rebounded in the 2022 tax season following the precipitous decline due to COVID health restrictions.
  • The trend in volunteers has been in decline since it peaked in the 2019 tax season.  The small rebound in the CRA count for 2022 is, we believe, misleading.  This is due to an unusual interpretation which the CRA makes in whom it classifies as a volunteer.  In partially correcting for this with an adjusted estimate, we show that the small rebound in 2022 is illusory and that the number of volunteers continues to decline.

PRODUCTIVITY REBOUNDS FOR VOLUNTEERS BUT NOT FOR HOST ORGANIZATIONS

  • Averages of individuals assisted and returns filed per volunteer fully rebound to the peaks achieved in the 2017 tax season.
  • Averages of individuals assisted and returns filed per host organization are only 70% and 71% respectively of the peaks achieved in the 2017 tax season.

For further analysis, charts with trends, tables with data and their sources, see:

Messaging Confusion: The CRA Has More Than Just A Marketing Challenge

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The CRA markets the CVITP clinics as a place for low-income residents to get their taxes prepared.  Yet this is increasingly at odds with the experience of most of the CVITP’s clients.  They do not come to CVITP clinics to get a year-end reconciliation of the income tax they owe as their incomes are too low to pay tax.  They come because they know, from prior experience, that they can only continue to get important federal and provincial/territorial benefits if they file a return.

In this article, we explore why it matters that the CRA misrepresents the CVITP clinics in its marketing.  We recommend an alternate way of marketing the CVITP which better aligns with the reality lived by its current and potential clients.

Changing the way the CRA markets the CVITP makes it sound like it’s an isolated problem with an easy fix.  But we believe the mismatch between the CRA’s current marketing messages and the reality on the ground is indicative of a larger challenge: the CRA needs to update its vision of the CVITP.

It is no longer just a free tax preparation service.  It has also become – and arguably more importantly – a community-based service which helps low-income residents maintain their access to important poverty reducing benefits.  The evolution of the income tax and benefit system and the return preparation process it employs have driven this change.

A realistic appreciation of the two functions currently carried out by the CVITP suggests the CRA needs to embrace a different approach to its administration of the CVITP.  This new approach should emphasize the dual function throughout four stages (i.e., recruitment, training, supervision and support, recognition and retention) in the administration of the CVITP’s service delivery.  We give two examples in our article to illustrate the kind of changes this might entail.  Future articles will offer many more examples.

How To Coordinate CVITP Clinics, Why It Isn’t Happening And Why It Should

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We work as CVITP volunteers in a large urban area.  At the height of the tax season, in March and April, there are over 40 host organizations offering CVITP clinics in our area.  Yet they do not coordinate their CVITP efforts between themselves.  We suspect this is true in many urban centres.  Why?

In this article, we give nine examples to illustrate some of the ways in which CVITP host organizations can coordinate by pooling clients, volunteers and information.

We then explore the question of why this doesn’t happen more often.  In a nutshell, many host organizations feel they cannot afford the costs, in the short term, to closer collaboration.  Ideally, the CRA’s regional coordinators could take on the role of leading coordination efforts amongst host organizations within their regions, helping to overcome some of these costs.  However, given the CRA’s generally cautious approach to the CVITP, we do not see this happening anytime soon.

Yet we know that there are cases of closer collaboration between host organizations, even if infrequent.  We offer up the intriguing example of Aspire Calgary to show how 18 host organizations have managed to closely collaborate on a range of activities related to the CVITP, from training to fundraising.  Working together, they have managed to produce impressive results in support of Calgary’s poverty reduction strategy: in 2019, their 572 volunteers filed 8,797 returns in 325 clinics which generated $43 million in government benefits for people on low incomes.  We briefly outline three notable features of Aspire Calgary’s model which support this collaboration.

Such cases demonstrate that some organizations are willing to incur the short-term costs associated with better collaboration.   Why?  We believe it is because they have realized that the short-term costs are outweighed by the benefits over the medium term.  Chief amongst these benefits is better client service: more clients can be assisted; they can be assisted by volunteers who better understand their particular circumstances and the service can be offered on a more flexible basis.

Finally in our article, we set out a challenge in 2023 for host organizations who are willing to take the first step toward closer collaboration with others in their region.  We propose volunteer training, an area we find to be neglected at many host organizations we know and an important element for improving service to clients.

The Evolution of the CVITP – 2021 Final Edition

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This is a follow up to our early edition on the evolution of the CVITP in 2021.  We consider the CRA’s annual Departmental Results Report the gold standard for CRA reporting because the report is submitted to Parliament.  Even then, data on all four elements – clients, returns, volunteers and host organizations – is hard to come by.  It is growing increasingly difficult for Parliament, the public and the host organizations and volunteers directly involved in making the CVITP a reality to know what’s happening.

In our article, we briefly discuss the numbers and their sources.  We show that the number of clients served rebounded by 43% from the spectacular low of the 2020 tax season.  (Remember: that was the season when host organizations had to stop offering in-person CVITP clinics due to the COVID health restrictions.)  Nevertheless, the number of clients served was still well below the peak achieved during the 2019 tax season.  As the CRA did not report consistently on the number of returns filed, we can only assume that it was greater than the number of clients served.  But we don’t know by how much.

Although the CRA did not report formally on the number of volunteers, we find a number in a statement by the Minister of National Revenue which suggests it declined substantially from the number reported for the 2020 tax season.  The number reported for host organizations represents a spectacular decline from the 2020 tax season.  We note that the numbers provided by the CRA for volunteers and host organizations in the 2020 tax season are misleading in that they likely included those registered with the CRA at the beginning of the season rather than those who were able to adapt to CVITP virtual clinics.  Furthermore, the 2021 figure for volunteers is simply too high to be credible.  In any event, the declines in the number of volunteers and of host organizations over the 2020 and 2021 tax seasons is deeply troubling.

The Evolution of the CVITP – 2021 Early Edition

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CVITP figures for the number of people assisted this year and the number of volunteers registered show a second year of poor performance, well below its peak for the 2018 tax year (2019 tax season).  The poor performance last year was not surprising given the sudden imposition of public health restrictions due to COVID.

In the lead up to the 2021 tax season (2020 tax year), the Canada Revenue Agency (CRA) had ample time to plan for the operation of the CVITP under public health restrictions.  However, the CVITP’s performance this year was only marginally better than last year.  This is despite the CRA having been allocated in recent years a large administrative budget increase for the CVITP that was intended to double the number of people assisted.

What’s going on here?  We may never know the full story.  Earlier this year, the CRA indicated it will not be providing any information on the CVITP in its future reports to Parliament.  The timing of this decision may be purely coincidental.  But one can be forgiven for thinking that the CRA’s recent poor performance on managing the CVITP might have had something to do with it.

For further analysis with numbers and our sources, see our short article here.

CRA Data and Analysis Suggestions for a More Effective CVITP Strategy

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As mentioned in a previous article, one priority in her Supplementary Mandate Letter from the Prime Minister (dated January 2021) instructs the Minister of National Revenue to “enhance and expand the Community Volunteer Income Tax Program”.  One thing the Canada Revenue Agency (CRA) can do to help achieve this is through placing greater emphasis on another priority mentioned in the same letter, instructing Minister Lebouthillier to “improve the collection and analysis of disaggregated data related to supports and services offered by the CRA.”

Data needs to be collected and analyzed for at least two reasons.  First, to confirm whether or not the CVITP is meeting its intended objective.  And second, where the CVITP is falling short of its intended objective, to help devise strategies to ensure the program can better meet its intended objective.

We think the Canada Revenue Agency (CRA) currently has two related problems with respect to CVITP data.  First, it collects the wrong data and publishes too little of what it does collect.  Second, this means the CRA focuses on doing the wrong things.

In this two-part series of articles, we look at data and its use in formulating strategy.

In the first article, entitled “First, the CRA Needs to Collect and Analyze the CORRECT Data”, we examine the data that is collected and analyzed on clients and their returns.  We begin with the uncontroversial observation that data needs to be collected and analysed to confirm whether or not the CVITP is meeting its intended objective.  We then refer to a previous article in which we argued that the CRA presently collects and reports CVITP results data which are not aligned with the purpose and in which we offered alternative performance indicators which we believe do a better job of this.  We also look at the data the CRA currently collects on CVITP host organizations and volunteers – what we call the delivery infrastructure – and make some modest suggestions for additional data to be collected through the annual registration process just prior to the tax season.

In the second article, entitled “Then, the CRA Needs to Build a Strategy With a Focus on Improving EFFICIENCY”, we look at how all this data can be used to devise strategies to ensure the CVITP can better meet its intended objective.  The combination of analyses of data on CVITP results and delivery infrastructure can help to inform the choice of actions to be taken.  The strategic priority we focus on is increasing the number of CVITP clients.  We argue that the CRA should place greater emphasis on increasing efficiencies within the existing delivery infrastructure over increasing the size of the delivery infrastructure.  A few examples are offered to illustrate how data on results and delivery infrastructure could be used to do this.

Post Tax Season Review: Initial Impressions from the CVITP Frontlines

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With the close of the tax filing season, we did an informal survey of some of our fellow CVITP volunteers, to get their first impressions of how the tax season went.  This included both new as well as returning volunteers.  This article contains a summary of their impressions as well as a few of our own.  We welcome hearing more about some of the lessons you have drawn from your own experience of the tax filing season.

Observations From Helping Chronic Non-filers to File

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One host organization we work with as CVITP volunteers has good connections with other social services in the local community and, through those connections, identifies chronic non-filers who are now seeking to file. A number of these cases have been forwarded to us to work on.  This article covers some issues we have identified when filing for these chronic non-filers.  It also highlights issues raised that the CVITP is not designed to handle but which can impact on the client’s situation.  This article does not cover the mechanics of how to file for these individuals; information on this can be found in our article “How do I file a client’s returns for prior years?”

16 Lessons From Dealing With COVID

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As we reported here, in the 2020 tax season the CVITP served only 55% of the clients it had served in the previous year.  The Canada Revenue Agency (CRA) attributes the dramatic decline to the public health restrictions introduced in 2020 to deal with COVID.

In preparing for the forthcoming tax season, the CVITP tax clinics will be subject to similar COVID related public health restrictions.  Furthermore, as of now, the CRA has given no indication that it will change the traditional filing deadline of April 30th to ensure the continuity beyond June 2021 of the many benefits which are conditional upon filing an up-to-date return.  Significant changes in practices and procedures are needed to avoid an outcome similar to last year’s.

What can be learned from the experience last year which can be applied to this year’s tax season and to future years when the public health restrictions are no longer an issue?

This article identifies 16 lessons.  We also invite our readers to share additional lessons drawing on their own experiences.