Taxpayers' Ombudsperson makes five recommendations after reviewing Canada Revenue Agency's administration of 2023 bare trust filing requirements

OTTAWA, ON, March 5, 2025 /CNW/ - Today, the Taxpayers' Ombudsperson, Mr. François Boileau, released Unintended Consequences, the report on our Office's examination into how the Canada Revenue Agency (CRA) administered the 2023 filing requirements for bare trusts.

In July 2024, the Taxpayers' Ombudsperson announced that our Office was opening a systemic examination into whether the CRA had respected taxpayers' rights in its administration of bare trust filing requirements for the 2023 tax year. For this examination, we consulted with stakeholders, including tax professionals and the CRA, to gain a better understanding of the issues at hand.

We found the main issue to be that the CRA was tasked with administering legislation that was burdensome. This led to the Department of Finance Canada announcing in August 2024 that it would consult with Canadians to clarify the bare trust reporting rules and ease the related administrative burden on taxpayers.

We also found that the CRA took steps to communicate with taxpayers about the new trust reporting legislation. However, the CRA's ability to provide individual guidance was limited, as it cannot provide legal advice to taxpayers, including about the legal determination of the existence of a bare trust. As a result, in some cases, the CRA did not provide clear and timely information.

Similarly, while the CRA made efforts in terms of limiting the costs of compliance, overall it did not minimize the time, effort, and costs that taxpayers had to incur to comply with the new filing requirements.

As a result of this examination, the Taxpayers' Ombudsperson has made five recommendations to the CRA to improve the service the CRA provides to taxpayers and help prevent any similar issues in the future. The CRA should:

• conduct an internal review of how it collaborates with stakeholders when amendments to legislation have been enacted by Parliament.
• conduct an analysis to determine if it would be beneficial to introduce a unique form for bare trusts to meet the new reporting requirements so they can easily submit the necessary information.
• review how it works with Finance Canada, particularly when it appears that the administration of a legislative proposal could increase the costs of compliance for taxpayers.
• review how it communicates updates to Canadians, specifically through tax tips and news releases when tax or benefits requirements change.
• create an adaptable guide to help it streamline how it administers changes to tax legislation.

Background information

The Office of the Taxpayers' Ombudsperson works independently from the CRA. Canadians can submit complaints to the Office if they feel they are not receiving the appropriate service from the CRA. Our main objective is to improve the service the CRA provides to taxpayers and benefit recipients by reviewing individual service complaints and service issues that affect more than one person or a segment of the population.

The Taxpayers' Ombudsperson assists, advises and informs the Minister of National Revenue about matters relating to services provided by the CRA. The Ombudsperson ensures, in particular, that the CRA respects eight of the service rights outlined in the Taxpayer Bill of Rights.

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"In this examination, we learned that there are always opportunities for the CRA to improve the service it provides to taxpayers, even when the tax legislation is complex. I have made five recommendations that can lead to meaningful change in the future. It is now up to the CRA to act on them."

Mr. François Boileau, Taxpayers' Ombudsperson

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SOURCE Office of the Taxpayers' Ombudsperson

Contacts: Media enquiries, Media Relations, Office of the Taxpayers' Ombudsperson / Government of Canada, [email protected]