Understanding the Tax Return – What You and Your CVITP Clients Need to Know
What is an income tax and benefit return? For many Canadian residents, it is a frighteningly complicated puzzle. This is why each year, consistently 60% of Canadian residents ask someone more knowledgeable to prepare their return for them[i]. And for many first-time filers, the return is a veritable mystery. Many just know they’ve been told this is something they need to do.
But between low-income and middle or high-income Canadian residents, the motivations for preparing and filing a return are very different.
For many middle and high-income Canadian residents, it is just about income taxes. It is something that they may not like but realize they must do. In doing so, they hope to get no nasty surprises, especially a tax bill. Instead, they may dream of getting a hefty refund. They may or may not realize that it is a legal obligation to file a return if they have taxable income. They probably know that if they don’t file their return and they owe taxes, they will get charged interest on the amount owing. There is no time limit on the tax amount owed – the CRA will maintain records and, in addition to the interest, charge a late filing penalty when the errant taxpayer finally files.
Middle and high-income residents are generally unaware there are any benefits to filing a tax return – other than possibly reducing their tax bill – because they are not eligible to receive most of them; their incomes are too high for that. Most of their actions are based on the fear of owing the government more money and the desire to recover any overpaid income tax. It’s why almost everyone calls it a tax return[ii].
For many low-income Canadian residents, preparing and filing a return is not about paying income tax. This is because many have incomes too low to be paying any income tax. But they know they need to file it each year to get or maintain access to many poverty reducing benefits. If they have no taxable income, they under no legal obligation to file a return. They will not be charged a late filing penalty by the CRA. But they can only claim refunds on income tax overpayments and benefits for the last ten years; after that, the CRA retains the money.
CVITP volunteers are in a privileged position. By helping clients to prepare their returns, they gain insights into how the income tax and benefit system works (and often doesn’t work).
Many volunteers simply like doing returns because it helps people and, unlike many of their clients, they are comfortable with numbers. I admit I get a certain satisfaction out of completing a return and getting it filed.
But the CVITP volunteer’s role is not just to prepare and file the return. It is also to explain the results of their work to the client and answer their questions before seeking the client’s permission to file the return.
Every volunteer should understand the principles, if not all the details, that lie behind the return preparation and filing process so they can better answer questions the client may have.
In the first article in this two-part series, I explain the purpose of the income tax and benefit return, in a relatively simple, straightforward manner. I hope this will help CVITP volunteers to understand the context for the many details of the return that often confuse people.
In the second article, I explain the essentials of what the CVITP volunteer’s client needs to know to understand their return. While it relies heavily on the big picture laid out in the first article, none of what is in the first article is essential for the client to know.
[i] The CRA updates data weekly which shows that 60% of Canadians consistently use EFILE to file their returns. EFILE is the system wherein an expert files a return on behalf of a client.
[ii] Unlike the CRA which more accurately calls it an income tax and benefit return.
Looming Volunteer Shortage Could Undermine CVITP in Next 5 Years
In the first of two articles, I look at the demand for and supply of CVITP services to illustrate a growing problem with volunteer recruitment. Looking at the recent past, I conclude there has likely been a large unmet demand for CVITP services. However, the recruitment of volunteers, who are the linchpin in the provision of CVITP services, has been sluggish. Looking ahead, I speculate that the demand for CVITP services is unlikely to decline and may even grow as automatic tax filing gets introduced for low-income individuals and households.
If I am correct, this implies that CVITP volunteer recruitment will need to be ramped up. In the second article, I review recent trends in volunteering within Canada which suggest that it will be increasingly more difficult to recruit volunteers. As volunteer recruitment is a responsibility shared between the Canada Revenue Agency (CRA) and host organizations, I look at how both are doing. I conclude that the CRA has no plans to ramp up volunteer recruitment and that most host organizations are in the same position.
Thus, CVITP volunteer recruitment is the slow-moving crisis that could undermine the CRA’s ability to continue providing quality in-person services to low-income households in the coming years.
How Does The CRA Deal With Money Owed by Clients?
Have you had a client tell you they didn’t receive the benefits you estimated they were entitled to when you prepared their income tax and benefit return? In some cases, they might be getting the benefits but just don’t realize it because they haven’t checked their bank account.
But for other clients, they owe money to various creditors. And in certain instances, the Canada Revenue Agency (CRA) acts somewhat like a collection agency, withholding the client’s refund and possibly some of their benefits, and redirecting these to the client’s creditor. The client may not realize they owe this money or, if they do know about the debt, they may not realize the CRA has the legal authority to do this.
In this article, I identify several different kinds of debts that a client might have where the CRA may get involved. These include income tax arrears, overpayments of federal and provincial or territorial benefits, ineligible COVID-related support, monies owed to other federal departments and provincial or territorial governments, and monies owed because of a court order that has not been respected.
In some of these cases, it is clear as to how the CRA proceeds. But in others, it is not because the CRA does not provide clear information on its rules for what it calls “recovery actions”, claiming that these will often depend on the client’s circumstances.
This debt will usually be referred to in the client’s CRA account which you can access using Represent A Client. This article provides you with information to help you explain to the client any discrepancy between your estimates of the client’s refund and benefits, and what the client gets from the CRA.
Why Informed Client Consent is Important But Some Volunteers Don’t Get It
Imagine receiving a Notice of Assessment that says you owe money when you were expecting a refund. Or again, receiving a notice for a benefit that contains an obvious error. A greater surprise might be to discover that your return has been filed without your knowledge. Unfortunately, these kinds of things happen all too often because a volunteer has failed to follow two important steps: review the results of the return with the client and then obtain their consent to file it.
In my visits to host organizations across Canada as well as in my own CVITP volunteer work with clients, I have been surprised by the large number of clients who are not being informed of what is contained in the completed return and whose consent is not sought before their return is filed.
This article explores how and why this malpractice is so widespread. It then spells out the reasons why the volunteer must get the client’s informed consent prior to filing their return.
CRA Deadline Change Undermines Reliability of “Autofill My Return“
On February 28, 2025, the CRA announced that it was pushing back the deadline for all T slips issuers to electronically submit their slips until March 7, the end of the first two weeks of the income tax and benefit (ITB) return filing season. This meant that CVITP volunteers could not depend on the Autofill My Return (AFR) service to reliably provide all a client’s T slips. Anyone wanting their ITB return done in the first two weeks had to present paper T slips to their return preparer to make sure all their sources of income were declared. This article argues that this measure undermined the reliability of the AFR function and furthermore, that there were better ways to have implemented this.
What Should The CVITP Do About Any Problems With Ufile?
Have you ever run into problems with the Ufile software which the CVITP Helpline is unable to resolve? In this article, we illustrate this with an example of such a problem. Then we discuss the current procedure our CVITP coordinator suggests we follow when these kinds of problems arise. We explain why we think the suggested procedure is not appropriate. And we offer an alternative way of addressing such problems which we believe is more likely to lead to their resolution.
Your Newcomer Clients May Not Be Getting Their Benefits – Here’s Why
Have you prepared a newcomer’s income tax and benefit return recently? When filing the return, you may have told the client this action will automatically trigger the disbursement of benefits to which they are entitled. But you may be surprised to learn that this is not always correct.
Often, the Canada Revenue Agency (CRA) will inform the client that they must first provide more information. Find out here what this information is, why the CRA does a poor job of communicating this to the client and how it could do all this better in two simple steps.
What is the CRA’s new Volunteer Identification Number for?
Early in May, you probably received an email from the Canada Revenue Agency (CRA) announcing that as an approved volunteer with the CVITP, you have been assigned a Volunteer Identification Number or VIN. No information was provided on its purpose other than to say it would allow the CRA to better serve volunteers.
Read here to learn about at least three ways we think it might be used.
Why You Should Tell Clients the Benefits Estimates in Their Returns
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
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”.
Why Every Volunteer Should Learn How to Use “Autofill My Return”
First introduced by the Canada Revenue Agency (CRA) in 2017, Autofill My Return (AFR) is a great innovation. We use it all the time.
But when we speak with other volunteers about AFR, we are struck by the large number, many of them quite experienced, who continue not to use it. (The CVITP end-of-season survey results for 2022 corroborates this picture of low usage: only 35% of survey respondents confirmed that they made use of AFR.)
When we ask why they don’t use it, two of the most common complaints we hear are that it is too complicated and that it takes too much time to use.
This article outlines nine reasons why we think every volunteer should learn how to use AFR. Let us know if there’s a reason we’ve missed. We also want to hear from clinic coordinators as to why they think their organizations can offer satisfactory CVITP services without insisting that their volunteers use AFR.
Improving Calls to the CVITP Helpline for Client Information: A Simple, Secure Proposal
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.
How to Get Experienced Volunteers Back Next Year
Once a CVITP volunteer has been recruited, trained and gained some experience, the CVITP stands to gain if the volunteer comes back again next year. Given that the Canada Revenue Agency (CRA) does not publish information about its volunteers, we do not know if the root of the problem behind its stagnating volunteer numbers is principally one of poor recruitment of new volunteers or of poor retention of existing volunteers.
Just as with the recruitment of new volunteers, the CRA currently relies primarily on its host organizations’ efforts to retain their existing volunteers for the next tax season. Yet the evidence suggests this indirect approach, mediated via its host organizations, is not working. In this article, we propose ways for the CRA to get directly involved in efforts to retain its existing CVITP volunteers.
Volunteers need to be recognized for their efforts. This is a fundamental aspect of any organization’s work on retaining its volunteer. However, at present the CRA does remarkably little to recognize its CVITP volunteers’ contributions.
This article offers ideas for the CRA to better acknowledge their volunteers’ contributions both to the volunteers themselves and to the wider community. It also includes some other measures the CRA could take to help retain experienced volunteers.
These suggestions are informed by Volunteer Canada’s Canadian Code for Volunteer Involvement (CCVI) and, in particular, its checklists for putting the Code into action (including the checklist on recruitment on page 9). While it has not adopted the Code, we believe the CRA should heed its advice as the Code represents the industry standard for Canadian organizations, whether non profit or government, in working with volunteers.
Stagnating Volunteer Numbers: Will CRA Succeed In Recruiting Better?
The federal government has frequently indicated it wants the CVITP to grow. In recent years, the CVITP budget has quadrupled to expedite this growth. As volunteers lie at the heart of the CVITP’s service delivery, the Canada Revenue Agency (CRA) needs to ramp up recruitment. How’s that going?
In the first article of this three-part series, we explore the current trends for volunteering in Canada and in the CVITP. We present evidence suggesting that the CVITP faces an existential threat with stagnant or declining volunteer numbers.
In the second article of this series, we review what the CRA has recently said about its plans for volunteer recruitment. It appears to rely primarily on the volunteer recruitment efforts of its host organizations to grow its volunteer base. Yet the evidence suggests this indirect approach, mediated via its host organizations, is not working.
Gambling further on using just this approach poses a great risk to the future success of the CVITP. The third and final article proposes that the CRA also get directly involved in more actively recruiting volunteers. The article offers ideas in three areas: developing appropriate promotional materials, launching an annual recruitment campaign, and using diverse media. These are used to illustrate what this more direct approach might look like. The article also suggests how the CRA could manage this direct approach.
These suggestions are informed by Volunteer Canada’s Canadian Code for Volunteer Involvement (CCVI) and, in particular, its checklists for putting the Code into action (including the checklist on recruitment on page 9). While it has not adopted the Code, we believe the CRA should heed its advice as the Code represents the industry standard for Canadian organizations, whether non profit or government, in working with volunteers.
Once the CRA has recruited new volunteers, what can it do to keep them? Watch for our forthcoming article on CVITP volunteer retention.
Observations From Helping Chronic Non-filers to File
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?”
Sixteen Lessons From Dealing With COVID
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.
How do I file a client’s returns for prior years?
Volunteers are usually asked to file a client’s income tax and benefit return for the most recent tax year. However, there are also instances where volunteers may be asked to file prior years’ returns for a client who has skipped one or more tax year filings. In this article, we describe, in a series of steps, what we’ve learned from helping clients to file for prior years.
Client or Volunteer Error? Promoting Learning and Improving Service Quality
Volunteers make mistakes in filling out client returns. After all, to err is human. Here is what the Canada Revenue Agency could be doing to promote learning among its volunteers while improving CVITP service quality. At the same time, it would demonstrate a commitment to further protecting the integrity and reputation of the CVITP which encompasses its host organizations and volunteers.
The Evolution of the CVITP – Volunteers
In a series of articles, we trace the evolution of the CVITP, using information from Canada Revenue Agency (CRA) reports and plans for Parliament. Read the article on the CVITP volunteers who have helped clients to file their returns. Our other articles tell you about the clients served by the CVITP tax clinics, the returns that have been filed at the these clinics, and the organizations which have hosted CVITP tax clinics.
Interested in reading the whole series? Start with our introduction and 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.”