Tax Tips & Pits – Canada Revenue Agency’s paperless push ramping up

"The government wants to directly deposit all CPP payments and the like."

In search for excitement, if you happened to have read a recent Notice of Assessment from the Canada Revenue Agency (CRA), you may have noticed a paragraph dedicated to CRA’s offer to communicate with you via email.

The CRA paperless push is ramping up in 2016.

Last year at this time, CRA began inviting taxpayers to its website to set-up their “My Account”. If set-up, a taxpayer is able to view and in some cases change assessed tax returns, make requests of CRA, and access personal information. The taxpayer will also be asked to choose paperless communications with CRA.

On the latter point, when filing your tax return there is now a question asking for your consent for email communications to replace CRA letters arriving via Canada Post. If you agree, you have to give CRA your email address and have a CRA “My Account”.

It’s a bit of a process to set up “My Account”. Allow about two weeks from start to finish since CRA mails you a passcode. Once you receive it, that’s when you actually log into “My Account” for the first time, and of course change the passcode.

If you choose paperless communications, when CRA has correspondence for you, CRA will send to your email address an email telling you there is correspondence from CRA in your “My Account” in-box and to log-in and read it. In other words, the CRA correspondence itself will not be sent directly to your personal email. You have to go on-line to retrieve it from CRA.

This means a CRA email will not contain detail, not ask for a direct reply, not have an attachment, and not have a link to “My Account”, a document, or a website. If a CRA email does include any of these items, it’s likely a scam. The CRA email will simply direct the taxpayer to log into their CRA “My Account” in order to read CRA’s correspondence.

Now it should be noted that despite the apparent all inclusive paperless push, at this time only a few types of correspondence are actually included in this plan. The rest still come via Canada Post. Having said this, CRA promises that almost all communication with taxpayers will become paperless, and this includes payments to and from CRA.

For years CRA has been encouraging taxpayers to set-up direct deposit for tax refunds from CRA, and now the government wants to directly deposit all CPP payments and the like.

In recent years CRA has been asking taxpayers to make payments to CRA electronically through on-line banking or using CRA’s relatively new on-line “My Payment”.

Now if you’re one who takes pleasure in paper, be aware that CRA’s current paperless requests may very well become requirements in the not too distant future. Having your “My Account” ahead of time may be wise.

Ron Clarke has his MBA and is a business owner in Trail, providing accounting and tax services. Email him at ron.clarke@JBSbiz.ca. To read previous Tax Tips & Pits columns visit www.JBSbiz.net.