Tax agency won’t extend filing deadline despite pleas from accountants
The federal government has no plans to extend the tax filing deadline this year despite calls from accountants and tax preparers who say the COVID-19 pandemic has made it difficult to meet the deadline limit.
Tax returns are due April 30 in what is widely seen as one of the most complex tax seasons in recent memory.
It’s a deadline that some accounting firms fear they won’t be able to meet on behalf of their clients.
“The situation is no better than last year,” said Geoffrey Webber, a tax specialist with an accounting firm in Cowansville, western Quebec.
“We could really take a month break just to relieve the stress.”
Work from home in a paper industry
Many clients and tax preparers are working from home under various public health restrictions. Webber said many customers have only recently submitted the necessary documents – some of which assumed there was a similar extension to last year.
And while many tax services are now available online, Webber said the profession remains heavily paper-based. Some of his clients don’t have easy access to a scanner to scan their tax forms and receipts, Webber said, while others are hesitant to meet in person to sign tax forms.
“I don’t usually lose sleep during tax season. It’s really busy, but that’s what I signed up for,” Webber said. “[Now] I wake up at night worrying about stuff like that.”
Taxpayers who owe money to the Canada Revenue Agency (CRA) and do not file their return by the filing deadline are subject to a financial penalty and interest. The penalty is five percent of the balance owing, plus an additional one percent for each full month of late reporting, up to a maximum of 12 months.
Those who file their return late could be deprived of income-tested benefits such as the Canada Child Benefit, or have to repay some of the money from these benefits if there is a material change from the the previous tax year.
Last year, the federal government extended the deadline for filing tax returns until May 31 and subsequently suspended late payment penalties until September.
But this year, the government is sticking to its schedule.
Extended deadline could threaten benefits, CRA says
In a statement, a spokesperson for the Canada Revenue Agency said the government would not extend this year’s filing deadline.
“Extending filing deadlines this year would risk interrupting essential credit and benefit payments for millions of Canadians, payments that thousands of Canadians rely on,” Pamela Tourigny said in a statement.
Tourigny said the CRA understands that due to COVID-19, some may have difficulty meeting their financial obligations, including paying their tax debts. She said the agency will work to help Canadians on a case-by-case basis through taxpayer relief provisions.
The CRA previously announced that people who earned less than $75,000 in 2020 and who received benefits related to COVID-19 like the Canada Emergency Response Benefit or Employment Insurance will not have to pay interest before next April
The government’s decision not to extend the filing deadline comes even as Quebec and other jurisdictions have done so.
Quebec’s finance minister announced Thursday that Revenu Quebec will suspend penalties and interest on tax returns filed after the original April 30 deadline for the entire month of May. The minister said the grace period would give Quebecers affected by the COVID-19 crisis more time to meet their tax responsibilities.
In the United States, the Treasury Department and the Internal Revenue Service have extended the deadline for filing federal income taxes from April 15 to May 17.
Countless accounting firms, especially smaller ones, are struggling to get their jobs done on time, according to Bruce Ball, vice-president of tax at Chartered Professional Accountants of Canada, the national body for the accountancy profession.
Ball said the organization pushed for the CRA to get some form of relief to relieve accounting firms — either a filing extension or a waiver of penalties for late filings. He said he was “disappointed” by the government’s refusal to budge.
“Our main goal was to give preparers and taxpayers more time,” Ball said. “For a lot of these companies. It’s just not possible to do the work required under these conditions.”
Tory MP Philip Lawrence, the party’s national revenue critic, urged the government during Question Period in the House of Commons on Friday to extend the filing deadline until June 30. Lawrence said many Canadians were struggling to regain access to their CRA online accounts after the agency went into lockdown. hundreds of thousands of accounts earlier this year as a cybersecurity precaution.
“Filing taxes is a stressful time for everyone, but in a global pandemic it can be downright painful,” Lawrence said. “Conservatives believe that the deadline for filing tax returns should be extended to provide relief to those who are struggling.”
Liberal MP Franceso Sorbara, who is Parliamentary Secretary to the Minister of National Revenue, responded by citing interest relief measures for Canadians who have received COVID-19 benefits and existing provisions for taxpayers who incur penalties for reasons beyond their control.
“These measures will ensure that Canadians who need help this tax season will get it,” Sorbara said.