March 5, 2021
Introduction
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?”
To begin with, we have no clear definition of a chronic non-filer, but it is likely to be an individual who has not filed in many years (for example, five years or more). Some of the cases we have dealt with have not filed in any of the last ten years. As we noted above, these are cases that are often brought to the attention of our tax clinic coordinator through case workers. While not always the case, they are more likely to be single, in very low-income groups, temporarily living in a shelter and/or have health issues.
These chronic non-filers are to be distinguished from those individuals who simply forgot or were unable to file in a prior year.
Observations
1. Prior years’ documentation for the client (e.g. T slips, notices of assessment) is always an issue as they will have incomplete or no records.
2. Expect each year’s return to take a lot more time to prepare than a current-year return.
3. Because each return filed will generate benefits for the client, file each return as soon as it is possible rather than saving them up to file together. In our experience, it does not appear to matter if the return for a more recent year is filed before the return for an earlier year (e.g. 2019 filed before 2014).
4. Use of Auto-fill My Return is indispensable.
5. While the 2017-2020 period can be done using Auto-fill My Return and EFile, the volunteer may have to wait for the Canada Revenue Agency (CRA) to send the client T slips before completing paper returns for the prior years. This can prove problematic as there may be a need to refer back to personal client information in the 2017-2020 returns to be able to complete the paper returns, but the lag between making a request to the CRA and getting the information to the client is usually such that the volunteer will be required to delete all of the files for the 2017-2020 years that have been filed well before the client gets the slips for the earlier years.
6. With respect to requesting prior years’ T slips, this can be done by mail, but the CRA agent on the CVITP Help Line can also initiate the process. When they do it, the delivery time can be much shorter.
7. In certain situations, such as applying for benefits or credits where payment information is required and the client has no receipts (for example, the requirement to provide a figure for rent paid to claim the Ontario Energy and Property Tax Credit), preparing a letter to the CRA for the client explaining the rationale for claiming a particular dollar amount may be necessary.
8. If at all possible, before beginning to prepare the client’s returns, get agreement from the client that they will report back on what actually happened with their returns. This is important feedback for the volunteer, especially to learn where errors may have been made.
9. Do everything reasonably possible to ensure that the client has a phone. It is almost certain that there will need to be frequent communication with the client. Without a phone, under the COVID-related public health restrictions, it’s necessary to arrange meetings at a distance (for example, in different rooms of a building and with communication over the internal phone system).
10. Impress upon the client the importance of retaining tax return information for future reference (for example, to figure out which years’ returns the benefits and credits have been paid and which are still outstanding).
11. Clients are unlikely to have a CRA My Account so communication with CRA via email is not an option. Instead, the client will have to use a reliable postal address.
There are at least two issues that can arise out of this process that the CVITP is not designed to handle.
A. Clients may not have direct deposit (Auto-fill My Return will show this) and as they may not have a fixed address, this can generate complications for receiving cheques; ideally, they should shift to direct deposit.
B. Clients 65 years of age and older may not have registered for Old Age Security or the Guaranteed Income Supplement and may need assistance in doing this.
If you have worked on helping chronic non-filers to file their returns for prior years, share your observations on what you have learned using the Comments section below.