Tax advisors are welcoming the Canadian Revenue Agency’s Taxpayer Bill of Rights, with its 15 rights, five new commitments for small businesses and the creation of the position of a taxpayers’ ombudsman.

But they are reserving judgment about whether these moves will do much to help their clients.

“It’s very much a wait-and-see situation,” says Heather Evans, tax lawyer and partner at Deloitte & Touche LLP in Toronto.

Evans says that many statements in the bill of rights are obvious reiterations of the law, such as “paying no more taxes than one owes,” while other rights address service issues such as quick and courteous treatment and accurate information.

(For a complete list and explanation of the rights, see www.cra-arc.gc.ca.agency/fairness. )

That said, she adds, an ombudsman could be helpful.

“The appointment of an inde-pendent body to monitor and uphold taxpayer rights is overdue,” she adds. “However, only time will tell if taxpayers will actually see substantive improvement or if the exercise is simply an effort to improve the CRA’s reputation.”

The minister of national revenue announced the Taxpayer Bill of Rights this past May. When Canadians file their 2007 taxes next year, they will have recourse to an ombudsman.

The ombudsman still hasn’t been named, however. The position was posted after it was announced in the spring. But, says Sam Papadopoulos, manager of communications at the CRA in Ottawa, the ministry should announce an appointment “relatively soon.”

He adds that the ombudsman will not resolve specific tax-related disputes or appeals, or complaints about whether a tax file was handled to a taxpayer’s satisfaction, except with regard to service.

MEETING STANDARDS

“The ombudsman is there to ensure the agency is meeting posted standards of dealing with files within a certain time frame and that it acts with professionalism, integrity and those sort of things,” says Papadopoulos.

The ombudsman’s reports to the ministry will indicate whether the paperwork is too burdensome for the taxpayer or whether the filing was onerous. “It would be a stretch,” Papadopoulos adds, to expect the reports to have an effect on the Tax Act.

The CRA will continue to track disputes and appeals regarding filing — as it always has. “The CRA keeps track of audits and resolutions on complaints, but they are not published,” says Papadopoulos. “The resolutions are usually made on a one-on-one basis through the appeals process or the tax courts, so the information is confidential.”

Some of the 15 rights listed in the bill of rights refer to rulings that cannot be considered service complaints. Of particular interest are grey areas such as “the right to expect us to warn you about questionable tax schemes in a timely manner” and “the right to have the costs of compliance taken into account when administering tax legislation.”

John Williamson, president of the Canadian Taxpayers’ Federation in Ottawa, is hopeful about what the ombudsman can accomplish, but this will largely depend upon whom the government appoints. “If it chooses a mouse,” he says, “we’re not likely to hear much about the bill of rights or see many reforms.

On the other hand, if the ombudsman is truly independent and is willing to step into the media limelight and criticize the CRA and the legislation that governs it, he or she could be very effective.

“This is really important,” Williamson says,

The ministry has stopped short of giving the Canadian ombudsman the same power as the Taxpayer Advocate Service in the U.S., which has a dual mission to assist taxpayers in resolving problems with the Internal Revenue Service and to make administrative and legislative recommendations to mitigate those problems.

Canada’s tax ombudsman will file a report every year, which can be tabled by either the government or a private member. “If this person is prepared to speak up for taxpayers, there’s no reason he or she can’t push things,” says Williamson. “There’s always a bit of freedom in these positions.”

He notes that Sheila Fraser, the auditor general of Canada, does not have legislative input, but Canadians have seen her parliamentary oversight of spending in at least two instances. She blew the door open on Jean Chrétien’s Liberal government’s poor accounting, and she was also partially responsible for pinpointing accounting problems in the sponsorship scandal in which the Chrétien government was paying large sponsorship contracts to advertising firms for performing little or no work.

@page_break@“And remember that it was the information commissioner who actually drafted the recommendation on reforming the Freedom of Information Act a few years back,” Williamson adds.

He cites the right to “expect us to be accountable” as the most important item on the Taxpayer Bill of Rights’ list of 15 rights.

“What we’ve picked up is that the CRA can be wrong,” he says. “Yet there has been no recourse when the agency provides incorrect data. When that happens, taxpayers pay the price. Some accountability is in order, especially if the agency will provide an opinion on a tax matter.”

Along with the announcement, the CRA has released Form RC193: Service-related complaint, which starts the service complaints process rolling. Papadopoulos says the CRA offices that deal with service complaints are already operational in all regions across Canada.

The CRA’s five-point “Com-mitment to small business,” includes commitments to implement a tax system that minimizes compliance costs for small businesses and to working with governments to streamline services for small businesses. IE