COVID-19 and the CRA: Tax & Estate Impact

During the COVID-19 pandemic several generally standard aspects of tax and estates law have changed. This article provides an overview of how changes in the operations of the Canada Revenue Agency (“CRA”) are affecting most taxpayers. Additionally, we will touch on the practical changes to estates law that make signing of estate documents easier and more safe.

There is good news for those of you who have not yet filed and paid most taxes that became due any time after March 18, 2020. The CRA has announced that they will not charge interest or late filing fees to taxpayers who delay filing or payment until September 1, 2020. This will give some breathing room to taxpayers worried about meeting a payment deadline.

Despite this, the CRA is still recommending filing on the suggested extended due dates to help ensure you receive benefits/credits on time. Individuals and corporations were recommended to file by June 1, self-employed individuals by June 15, and trusts by June 1 or September 1 depending on their original filing due date.

While these delays will provide taxpayers with additional time to complete their filings, getting a response from CRA may be more difficult that usual. The CRA, like most Canadian employers, has not been able to continue business as usual during the COVID-19 pandemic. With most employees working remotely and several thousand processing CEWS applications, they have ceased some operations entirely and are experiencing significant delays elsewhere.

Audits are continuing with priority given to high value audits, those close to completion, and for those taxpayers who have urgent files or who may benefit from the audit. Objections not dealing with benefits and credits are not currently being processed. T1 reviews for the 2019 tax year have been suspended, and any prior communication requesting information can be disregarded for the time being. We have also heard that s. 116 certificates are being issued only if they are near completion.

Finally with regard to estate law it is important to note that the British Columbia government released guidance allowing for Wills, Powers of Attorneys, and Representative Agreements to be signed and witnessed in “electronic presence” rather than face to face. This will provide additional flexibility for lawyers and clients who wish to maintain social distancing suggestions while completing their estate documents.

The COVID-19 pandemic has changed the world in every way imaginable. We hope that this brief overview will help you navigate some of the changes to the tax and estates law systems. Please reach out if you have any questions for our Tax, Estate and Trusts group here at Boughton Law.