Tuesday, March 6, 2007
received an email press release from the Canada Revenue Agency late on Tuesday stating they were shutting down the computer that processed e-filed personal tax returns. For many tax preparers the announcement means they will have to file paper returns or wait for the system to come back on, but it could be a long wait.
Until we can announce a business recovery date, the Agency will provide daily updates to the media on the steps we are taking.
On the surface, e-filing a return makes sense because it is more efficient, but at present it only makes sense for simple returns.
If you file a return beyond a T4 and an RRSP deduction, you can expect follow-up letters requesting original receipts. For accountants, this hassle means additional time—time that usually can't be recovered. As result, many accountants file paper returns for their benefit.
What is required is a system that allows the receipts to be e-filed along with the return. No more requests for donation receipts or tuition receipts. I don't know how it would be accomplished without opening holes for fraud, but I'm sure it could be done and until it is, many accountants will file paper tax returns.
Posted 2007/03/06 at 19h38ET in Tax Law.