CRA Annual Report to Parliament 2011-2012 (PDF - Agence du ...

Specialized program areas also use their advanced
knowledge and expertise to identify instances where
there is a high risk of non-compliance, and conduct audits
of the highest-risk cases. This graduated approach to
addressing non-compliance results in the most
cost-effective and efficient intervention and imposes the
least burden on the taxpayer. Our activities to address
non-compliance include:
early intervention
complex intervention
enforcement
payment of tax debt
Our goal is to ensure that identified non-compliance is
addressed. To achieve this goal, we focus a great deal of
our effort on early detection and intervention. If we can
address non-compliance before the behaviour escalates
or becomes habitual, we can reduce the need for more
aggressive and complex enforcement actions.
[early intervention]
Information technology, business intelligence, and our
risk assessment systems are the cornerstone of our early
intervention approach.
In 2011-2012, we processed approximately:
27 million individual and trust returns;
2 million corporate returns; and
7.5 million GST/HST returns.
All tax returns go through an extensive set of system
validations for error detection and correction. This allows
us to identify certain discrepancies in amounts,
deductions, and credits that taxpayers reported on their
tax return. We correct errors and omissions through an
automated process and send a notice of assessment to the
taxpayer explaining the results.
In addition, we use risk assessment models to identify tax
returns for further review. We have four major early
intervention processing review programs: confidence
validity, processing review, individual matching, and the
corporate assessing review program.
ANNUAL REPORT
2011-2012
CANADA REVENUE AGENCY
This early intervention review identified over $1 billion of
non-compliance in 2011-2012, similar to the dollar value
identified last year.
The common areas of misunderstanding that we identify
in this initial review process are analyzed to detect trends
or gaps in services. Where appropriate, this information is
entered into our risk assessment systems to help us
identify files for more in-depth review.
confidence validity
Our confidence validity program identifies and corrects
errors and inadmissible claims on individuals’ returns
before finalizing a notice of assessment.
In 2011-2012, we identified an average of $445 per
return in additional taxes assessed, for a total of
$156 million.
processing review
After the notice of assessment for individual income tax is
issued, our processing review program selects files that
have been identified through our risk-scoring process for
more in-depth review of specific elements like tax credits.
We then ask taxpayers for more information to verify their
claims.
In 2011-2012, we identified $213 million in federal,
provincial, and territorial taxes through processing
review.
matching
This step in our review process compares information we
have from third parties with the tax returns that
individuals filed. We correct information that is not
accurate or complete in the original return.
In 2011-2012, the matching program generated
$665 million in additional individual tax
assessments.
corporate assessing review
This program validates and reviews corporate income tax
returns to make sure that assessments are accurate. Since
the reviews are conducted soon after the initial
assessments are carried out, we find and correct errors
early. This process minimizes the risk of paying penalties
and interest.