by Mike Godfrey, Tax-news.com, Washington
09 June 2017
The Canadian Taxpayers’ Ombudsman has called on the Canada Revenue Agency (CRA) to make more information available on its Canada Pension Plan (CPP) and Employment Insurance (EI) decisions process.
A CPP/EI ruling is an official decision made by the CRA that confirms whether a worker is considered an employee or self-employed. This decision determines if the employment is insurable and pensionable, and who is responsible for withholding and remitting CPP, EI, and income taxes.
In 2015-16, the CRA completed 44,091 CPP and EI rulings requests.
The Ombudsman has published a report in which it highlighted a number of difficulties with the current system. It raised concerns over a lack of information regarding the reasons for the decision and the potential consequences of a change in employment relationship, and as to the taxpayer’s right to obtain a written copy of the rulings report that contains the full reasons. It also found that there was insufficient guidance regarding the steps to be taken to pay any outstanding amounts.
The report explained: “We found that there are only two ways to receive an explanation of a CPP/EI ruling: the worker or payer can call the officer who issued the ruling and request a verbal explanation; or they can request a copy of the CPP/EI Rulings Report. However, both of these options are dependent upon the worker or payer being aware that this request for an explanation is available.”
The Ombudsman recommended that:
- The CRA’s CPP/EI rulings letters should inform the parties to a ruling of their right to request a copy of the Rulings Report and how to request it;
- The rulings letters should, where applicable, state that an amount owing or over-contribution may result from the decision;
- The CRA should clearly communicate the steps a taxpayer needs to take following the receipt of a rulings letter, including the steps needed to pay any outstanding sums;
- The CRA should continue to include in its rulings letters the contact information of the rulings officer for an explanation of the decision, as well as reference to the relevant webpages; and
- The CRA should review the CPP/EI rulings program to determine whether efficiencies can be made that would allow for the inclusion of an explanation of the relevant factors within each rulings letter.
Published at Thu, 08 Jun 2017 19:00:00 -0500