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.
The federal government recently completed its 2021 pre-budget consultations. See our submission regarding the CVITP here.
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.
The Canada Revenue Agency (CRA) recently announced that it will, for the first time, be providing financial support to host organizations that run CVITP clinics. As the CRA has previously denied that it could provide such support, this is an important change. And in principle, it is one that we support.
However, the current pilot project, which offers $3.3 million a year over the next three years, is poorly designed, with no targeting (not in line with the purpose of the program), insufficient financing (unlikely to provide the intended incentive effects), and an administrative process that is burdensome (not exploiting the flexibilities available with the use of grant funding).
Recognizing that this three-year pilot project has yet to begin its first year of implementation, we make some suggested changes that we believe will significantly improve its impact. We propose that the CRA:
We conclude this four-part series of short articles offering some thoughts on the challenges the CRA will face in assessing the impact of this pilot project. Given the difficulty in surmounting these challenges, there is a risk that any growth in the numbers will be claimed as demonstrating the success of the pilot and used to justify maintaining this project with poor targeting, insufficient financial resources and cumbersome administrative arrangements.
We find two sources of 2020 data from Canada Revenue Agency (CRA) publications that allow us to update CVITP trends on the numbers of individuals assisted, returns filed, volunteers employed and host organizations offering free tax clinics.
In this article, we show and briefly discuss: (1) the dramatic decline in individuals assisted; (2) the continuing modest upward trend in the average number of returns filed per client; (3) a modest decline in the number of volunteers registered, which may mask a collapse in the number of volunteers who were actually employed in providing services in virtual clinics; (4) a modest increase in the number of host organizations registered which may similarly mask a collapse in the number of host organizations which actually offered services through virtual clinics; and (5) a continued decline in the average number of volunteers employed per host organization. This last trend may be an early sign of future capacity constraints within the CVITP.
Like all federal government departments and agencies, each year the Canada Revenue Agency (CRA) produces a report for Parliament after the end of the fiscal year. This report details what the CRA has done with the money Parliament has budgeted for its operations. This is the only report that parliamentarians and the Canadian public will see that shows what the CRA has done in the last fiscal year to meet its mandate.
This year is no different. On December 7, 2020, the CRA published online its Departmental Results Report for fiscal year 2019-2020. In this article, we review what the CRA has to say in the report about the results it is getting with the CVITP and its work on encouraging previous non-filers to file a return in order to access benefits to which they are entitled. We show that there is remarkably little information.
Although the CVITP was created in 1971, fifty years later it remains next to impossible to tell what the CVITP has achieved in relation to its objective of assisting individuals and families of low and modest incomes to submit their returns and thereby become eligible for a number of benefits and credits introduced by federal, provincial and territorial legislatures aimed at reducing poverty. The little information that is included suggests a massive failure this year; yet, there is no analysis showing the implications of this failure and how the CRA plans to avoid a similar result in the forthcoming tax season.
This is especially disappointing given that the federal government’s 2018 Poverty Reduction Strategy highlighted the role that the CVITP is supposed to be playing in contributing to reducing poverty across Canada. We conclude with an observation: if the rest of the information contained in the CRA’s report is anything like what the CRA has included for the CVITP and its non-filer initiative, then Canadians should be seriously concerned about the bases on which parliamentarians are making decisions allocating billions of dollars from the federal budget to finance the CRA’s annual operations.
The federal government’s Poverty Reduction Strategy identifies the CVITP as one of its programs that contributes to achieving its goal of reducing poverty in Canada. This is because the annual income tax and benefit return processed by the CVITP serves as the basis for establishing eligibility for and maintaining access to many federal and provincial/territorial benefits and credits, some of which are income-tested.
Set up by the Canada Revenue Agency (CRA), the CVITP is a free return preparation and filing service offered, in 2019, by over 3,500 host organizations to some 741,000 low and modest-income individuals filing 835,216 returns with the assistance of over 19,000 volunteers. Yet the CRA provides no financial support to assist host organizations with any of the costs they incur to make this possible. Instead, it encourages host organizations to do their own independent fundraising. This has not proven to be a successful nor sustainable solution.
To maintain and improve CVITP services, the CRA should be providing direct financial support to host organizations. It should also spin off some of the CVITP related services it currently provides to an independent not-for-profit unit, financed through a service contract with the CRA. This independent unit could provide these as well as other new CVITP related services not presently available to host organizations.
This proposed arrangement is in keeping with current federal government practice wherein federal services to the public delivered by independent parties receive some financial support. In the absence of such a change, host organizations will continue to struggle to maintain the current level of service and will not be positioned to improve their CVITP services in line with CRA expectations. Furthermore, the entire CVITP operation will remain at risk, as was evidenced this year when COVID related public health restrictions temporarily shut them down and willing host organizations moved to more labour intense “virtual clinics”.
Read here to learn more about the difficult conditions in which host organizations currently operate and why this severely limits the potential of the CVITP, one form that CRA financial support to host organizations could take, and why there is also the need for an independent unit as well as what it could be do to help fulfill the potential of the CVITP.
Conservative estimates suggest there are over 1 million eligible people in Canada who do not file annually. A significant number, perhaps the majority, are individuals living on very low incomes. Because they do not file, they are missing out on important federal and provincial/territorial benefits.
The Canada Revenue Agency (CRA) recently introduced an initiative to encourage low-income non-filers to file their income tax and benefit returns. However, the success rate for this initiative is pitifully low.
This article suggests why the CRA should and how it could work with CVITP host organizations to significantly increase the number of low-income non-filers who decide to file returns.
For many CVITP host organizations, the demand for free clinic services exceeds the supply of volunteer time available to prepare returns. The income ceilings suggested by the Canada Revenue Agency (CRA) are an established way of limiting access to this free service. This article compares the income ceilings suggested by CVITP with the incomes that make up poverty lines and finds that, with a few exceptions, the former are generally greater than the latter. Host organizations which want to target their services to those who need it the most may wish to use income ceilings that are more closely aligned with the poverty lines for their region.
To learn more, you can read the full article here.
In a series of articles, we trace the evolution of the CVITP, using information from Canada Revenue Agency (CRA) reports and plans for Parliament. Our articles tell you about the clients served by the CVITP tax clinics, the returns that have been filed at the these clinics, the CVITP volunteers who have helped clients to file their returns and the organizations which have hosted CVITP tax clinics.
Learn why we reach the conclusion that “the CRA’s reporting on the CVITP has been weak to date and gives Parliament too little information.”
Interested? Start with the introduction to “The Evolution of the CVITP”.