Association of Canadian Disability Benefit Professionals responds to Canada Revenue Agency changes to Disability Tax Credit Program

TORONTO, June 12, 2019 /CNW/ - In an unprecedented move, Canada Revenue Agency (CRA) has published proposed regulations under the Disability Tax Credit Promoters Restrictions Act limiting the fees that may be charged to assist disabled Canadians in qualifying for and maximizing benefits relating to the Disability Tax Credit (DTC). While the Association of Canadian Disability Benefit Professionals is in the process of preparing a detailed response to the CRA's flawed Regulatory Impact Analysis Statement, it is immediately clear that the direct result of these regulations will be the unavailability of services to disabled Canadians, near total job losses within the industry, and fewer benefits received by those who need them most.

Members of the Association play a critical role in unlocking benefits for disabled Canadians and their families. Taxes are complicated, and dealing with CRA can be a nightmare. In 2017, the Office of the Auditor General¹ found that CRA provided incorrect information nearly 30 per cent of the time on average?and up to 84 per cent of the time on certain questions,² and was only able to meet its self-imposed call answer standards by actively blocking more than half the calls it received.³

Qualifying an individual for the DTC and its related benefits can require multiple in-person and telephone meetings, protracted correspondence with CRA and medical professionals, and even appearances on behalf of the client in Federal Tax Court. All of this work is carried out at no cost to the client unless and until benefits are actually obtained, and members of the Association bear the cost of any claims that are ultimately unsuccessful. For this work, CRA's regulations would permit service providers to charge a maximum fee of $100.

Even once a disabled individual qualifies for the DTC, they may have no taxable income in prior years against which they can claim the credit, which is nonrefundable. For this reason, Association members must often review the tax returns of multiple family members of the disabled individual going back multiple years in order to determine whether one or more of such family members can claim the credit retroactively. In fact, a significant proportion of the services provided by members of the Association are to individuals who are already qualified for the DTC but have not been able to maximize the amounts to which they are entitled. In consideration for reviewing up to several dozen tax returns in order to maximize a client's benefits, CRA is prepared to permit services providers to charge a maximum fee of $100 per year.

While the Regulatory Impact Analysis Statement maintains that the regulations should "ensure [that] legitimate businesses can continue to operate and provide affordable services to this vulnerable community," simple arithmetic dictates otherwise. No business can break even under the proposed regulations, and the Regulatory Impact Analysis Statement does not offer any rebuttal to this fact.

Alarmingly, the proposed fee structure is an open invitation to fraud, and encourages unscrupulous firms to collect upfront fees from individuals who have no chance of qualifying for the DTC, fail to provide services, and simply move on to the next victim. What incentive is there to fight for a client or even return a phone call when the maximum fee is already in your pocket before carrying out any work?

It should be obvious that the intent and effect of the proposed regulations is to wipe out the service provider business and reduce the availability of the DTC to disabled Canadians. CRA's Taxpayer Bill of Rights grants taxpayers the right to be represented by a person of their choice, but actions speak louder than words, and CRA has unfortunately opted to eliminate choice and harm the interests of disabled Canadians.

About the ACDBP

The Association of Canadian Disability Benefit Professionals (www.acdbp.org) consists of over a dozen firms across the country committed to advancing the accessibility of the disability tax credit to disabled Canadians and their families

SOURCE Association of Canadian Disability Benefit Professionals