Feds Cited For Lost Tax Dep’t Files: ‘This Is Embarrassing…’

Canada Revenue Agency has assigned senior managers to check documents after misplacing thousands of pages of records. Information Commissioner Suzanne Legault yesterday cited the Agency for “serious” problems in tracking tax files.

“We had a high number of missing records cases,” Legault told reporters. “More than half of those were valid complaints, leading us to ask the Agency to now certify they’ve taken all reasonable steps to search and find records.”

Under a 2015 Agency directive a senior manager – the assistant commissioner or director general – must personally certify that “all reasonable steps were taken to conduct relevant searches to identify and retrieve responsive documents” requested by taxpayers.

The policy followed a 2014 Federal Court case in which a judge cited tax authorities for concealing documents from a Sooke, B.C. taxpayer, Sandra Summers, despite three requests. Justice John O’Keefe ruled the Agency “consistently delayed disclosure of information, withheld information, destroyed information and misled the applicant as to what information was available.”

Summers had filed a 2012 Access To Information request for records after she was audited over claims of business losses the previous year. Only after Summers sued in 2013 did Canada Revenue conduct a top-to-bottom search for documents in her case and “discovered it had not destroyed records”.

Commissioner Legault in her Annual Report cited two other cases in which Canada Revenue disclosed 14,000 pages of documents after companies went to Court; and a taxpayer who received 57 pages of censored records and then received 57 more after an investigation was launched.

“Canada Revenue Agency has acknowledged to the Commissioner that it has a serious information management and document retrieval problem when it comes to identifying and retrieving records in response to Access requests,” the Report said.

In a string of unrelated incidents one official rated “embarrassing”, the tax department earlier admitted to losing tax returns, cheques, moving receipts, bank statements, audit files, permanent residency cards, marriage licenses and registered letters sent by taxpayers. Records obtained by Blacklock’s through Access To Information revealed cases in which taxpayers were charged late-filing penalties of up to $2,200 for returns the agency simply misplaced.

“I am very concerned,” one manager wrote in a July 13, 2012 email. “It is embarrassing to acknowledge that Canada Revenue Agency cannot trace their correspondence.”

“No, we have no procedures for logging correspondence,” another manager wrote in a July 9, 2013 memo.  “From what I hear from my colleagues this type of thing seems to be happening quite a bit,” another wrote in a March 1, 2013 memo; “It really doesn’t make Canada Revenue Agency look very competent when we call the client a week after they sent something by Xpress Post saying we didn’t get it.”

The Agency processes more than 25 million tax returns annually, by official estimate.

By Dale Smith

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