CRA audit incentives lead to poor taxpayer outcomes, study suggests

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Increasing pressure on the Canada Revenue Agency to raise tax revenue, as well as the structure of the CRA’s internal performance targets, may be contributing to poorer quality tax audits, according to a study published by the C.D. Howe Institute on Thursday. 

The study explored CRA audit incentives, such as its “fiscal impact” metric, which includes tax assessed, tax refunds reduced, interest and penalties, but doesn’t include the impact of appeals, reversals and uncollected amounts. The structure of the fiscal impact metric could create an incentive for the CRA to increase assessed amounts because reversals are not reported, the study suggested.

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Original Article Source Credits:   Advisor's Edge , https://www.advisor.ca/

Article Written By:  Rudy Mezzetta

Original Article Posted on:  September 3, 2020

Link to Original Article:  https://www.advisor.ca/news/industry-news/cra-audit-incentives-lead-to-poor-taxpayer-outcomes-study-suggests/

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