May 26, 2021
In May 2020, the Canada Revenue Agency’s (CRA) Ombudsman released a report entitled “Reaching Out” which closely examined the CVITP. The Ombudsman identified 15 recommendations which focus on “expanding and re-envisioning the CVITP, including improved funding and supports, to better serve its users and the organizations and volunteers who deliver the program.”
For those volunteers and host organizations interested in learning another critical perspective from ours on the CVITP, we strongly recommend reading this report. We do not agree with all of its recommendations. (Rather than embark on a comprehensive review of the Ombudsman’s report in this article, we will draw attention in subsequent articles to relevant recommendations which provide support for or contrast with our own positions.) But we think the report is instructive for at least two reasons.
1First, the report may be instrumental in getting the CRA to change its mindset in a few areas. For example, in the Spring of 2018, the federal budget confirmed a sizeable increase in the CRA’s internal budget for administering the CVITP. The Annex to the Ombudsman’s report includes recommendations about the CVITP which the Ombudsman had made, following that budget, in an Observation Paper dated November 2018. At that time, the Ombudsman had recommended, among other things, that “[t]he bulk of the new CVITP funding should go to providing resources to volunteers and partner organizations.”
Almost identical to its recommendation of November 2018, in the May 2020 report the Ombudsman recommends that “a significant portion of the Budget 2018 funding for the Community Volunteer Income Tax Program be used to provide resources and support directly to partner organizations and volunteers.” The recommendation is repeated because there had been no movement by the CRA on this point in the intervening 19 months between the first and the second report. However, some seven months after the Ombudsman’s May 2020 report was released (and two years after the Ombudsman’s November 2018 Observation Paper), the CRA announced a new pilot grant program to support CVITP host organizations. (Read our article to learn more about this new program and our assessment of its strengths and limitations.)
2The second reason for reading the report is that it gives one a better understanding of the CRA’s thinking about the CVITP, in particular what it conceives of as feasible. This is because the Annex includes not only the recommendations the Ombudsman had made back in November 2018, but also the responses the CRA had provided to those recommendations in February 2019.
Looking at the above example, where the Ombudsman had first recommended direct funding for host organizations and volunteers back in November 2018, the CRA’s February 2019 response is instructive. The CRA gave a rationale it had used on previous occasions to justify declining to provide direct funding:
“The CVITP was designed as an arm’s-length partnership with community organizations and their volunteers. The role of the program is one of support and guidance (i.e., providing training, tax software, promotional products, hardware (e.g., through the computer donation program), a dedicated telephone line for CVITP volunteers, and support from local CVITP coordinators). On the other hand, the role of community organizations is to organize and manage tax preparation clinics (i.e., to recruit volunteers, establish “office hours”, etc.) and arrange for their volunteers to prepare the returns.
“Overall, the CVITP strives to provide as much support as possible to the volunteers and partner organizations, while maintaining the arms-length relationship required to mitigate the liability risks that would be associated with any prescribed involvement in tax return preparation by the CRA.”
It would seem that the CRA saw direct funding as somehow compromising this “arms-length relationship”. By the time the Ombudsman released the May 2020 report, the CRA was well on its way to putting aside this objection and developing plans for the pilot grant program it would announce in January 2021.
Finally, the report will serve as a useful framework against which to assess future changes the CRA makes to the CVITP. Possibly more than any entity outside the CRA, the Ombudsman may be more effective at catalyzing change from within the CRA. This makes its analysis and recommendations important to keep in mind as the CVITP evolves over the next few years. This, together with the challenges thrown up by COVID, may have an outsized impact on the future shape of the CVITP.