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.
