Business owners unprepared for CRA’s switch to default online mail at risk of missing tax info

Businesses that aren’t prepared for the Canada Revenue Agency’s (CRA) transition to default online mail may miss crucial tax notices, forms and statements, tax experts say.

As part of a broader effort to improve service delivery, the tax agency is moving to online mail for most business correspondence, including the notice of assessment or statement of account for current source deductions. The transition will happen in two stages.

First, on May 12, the CRA will switch to online mail for all new business number (and CRA program account) registrations.

Then, on June 16, the CRA will begin delivering mail online to all existing businesses that already have a My Business Account registration or that have given a representative, such as an accountant, authority to engage the CRA on their behalf through the CRA’s Represent a Client platform.

Existing businesses that have neither a My Business Account nor a representative will continue to receive paper mail, as will charities and some non-resident businesses.

Certain correspondence, such as cheques if the business hasn’t set up direct deposit, will continue to be mailed.

Businesses that don’t realize they’re receiving tax correspondence online may risk incurring interest, penalties or other negative consequences if they don’t respond, tax experts warn.

Ryan Minor, director of tax for CPA Canada in Sudbury, Ont., says he’s particularly concerned about businesses that might use an authorized representative but haven’t registered a My Business Account.

For example, businesses often hire accounting firms to perform specific tax services but typically don’t have them monitor their CRA correspondence on an ongoing basis, Mr. Minor says.

“We’re a little concerned about [firms] getting blamed [by clients] for missing correspondence,” Mr. Minor says.

CPA Canada sent a letter to the CRA in March outlining its issues with the initiative.

In response to questions from The Globe and Mail, CRA spokesperson Sylvie Branch said in an e-mail response that there are just more than 1 million businesses with a business number that don’t have a My Business Account but do have an authorized representative with online access.

“The CRA is working with partners to ensure both the business and representative community are aware of the change and of the process to opt out of online mail,” Ms. Branch said.

Businesses that want to continue receiving paper mail must make a request with the CRA, either by mailing in a form or by choosing the paper mail option on their My Business Account with the CRA.

A business must renew its request to activate paper mail every two years to continue receiving mail that way. It must also keep its mailing address up to date with the CRA, as any undeliverable mail will result in the CRA reverting the business to online mail.

In a press release about the initiative issued Wednesday, the CRA recommended that businesses prepare for the change by signing into their My Business Account to ensure their e-mail address, which the CRA will use to send notifications, is up to date. Businesses can add up to three e-mail addresses per program account in My Business Account.

Joseph Devaney, a chartered professional accountant and director of tax education and development at Video Tax News in Edmonton, says he’s concerned businesses might temporarily miss important notifications if, for example, they update e-mail addresses company-wide or a person associated with an e-mail address on the business’s CRA account changes roles, leaves the company, or passes away.

The shift to online mail should eventually result in a faster and more trackable system of communication with businesses, he says. However, in the immediate term, businesses should consider opting out of online-only mail unless they have “a solid process in place to ensure notifications aren’t missed,” he says.

“Given the widespread issues with the CRA’s processing of personal tax slips this year, many firms are nervous about relying on CRA technology for such important communications,” Mr. Devaney says.

The CRA says it will make form RC681: Request to Activate Paper Mail for Business – the form to request paper mail – available May 12. The CRA recommends businesses continue to check their CRA My Business Account for correspondence while the CRA processes the form, which it expects it will complete within 30 days of receipt.

Businesses that select paper mail on their My Business Account portal will have their mail delivery preference changed instantly, Ms. Branch says.