Tax preparers tapped out as tax slips remain missing in CRA portals

As the April 30 tax-filing deadline approaches, many tax practitioners are struggling to complete tax returns on time as they input data manually and attempt to ensure that clients’ tax slips are all accounted for. The onerous process has some of them calling for the Canada Revenue Agency (CRA) to provide a filing extension.

The CRA’s “Auto-fill my return” service is unreliable this tax-filing season; some tax slips don’t show up, while others sometimes have no numbers, said Peter Weissman, a partner with Cadesky Tax in Toronto.

“There’s going be a cost to the clients because of the extra time” to prepare returns, Weissman said. “Between RRSP contributions, partnership investments, T5s, T3s, T4s — there are a lot more slips than people may be aware of.”

Weissman said he’s informing clients that tax-filing is taking longer and will cost more — a communication he’s never had to send before in his decades-long career. “I’m uncomfortable doing it, but I don’t think I have a choice,” he said. “Ignoring [the situation], or not telling my clients what’s going on, is not in their or my best interests.” Clients also get anxious about their returns as April 30 approaches, he said, and communication provides some relief.

Weissman said he files “a number” of T1 tax returns, but his practice focuses mostly on tax planning. Referring to accountants with significantly more T1s to file, he said, “I can only imagine what they’re going through; it’s exponential compared to me.”

In an email, Cory Litzenberger, founder of CGL Tax Professional Corp. in Red Deer, Alta., said he’s lost longtime clients because he can’t meet the filing deadline this year.

“I don’t have enough hours in the day (nor the young eyesight) to check every box in every slip and manually enter every single data point — including pre–June 25 and post–June 24 capital gains from T3 slips and dates of securities transactions for no real purpose other than it is required,” he wrote. T1 and T3 schedules maintain the reporting of capital gains before and after June 25 of last year, because the CRA originally intended to administer the now-defunct proposed capital gains tax changes. That reporting was also a complicating factor for tax slip issuers.

Weissman’s firm posted on LinkedIn this week that the CRA should provide an extension. “I never want extensions, because I want to be finished with tax season,” he said. “But the reality this year is it’s just not likely going to be possible [to finish on time].”

In the meantime, Weissman is triaging clients’ returns based on the various return deadlines. Specifically, “I’m trying to figure out which returns don’t have capital gains,” he said. T1 taxpayers with capital gains to report have until June 2 to file, but their spouses generally don’t get that extension, so they may have to adjust their return later. Trusts (T3s) with capital gains have until May 1 to file.

In his email, Litzenberger said his firm is triaging returns to help those clients “most at-risk for penalties,” followed by those most in need of social assistance and benefits.

His automatic email reply informs clients that a triage protocol is in effect and asks them to be diligent: “Make sure to send all slips this year — do not rely on us being able to get information from the CRA.”

In January, a new validation process was introduced to the electronic filing system that institutions and employers use to upload tax slips, and on April 3, the CRA acknowledged that some issuers had trouble uploading slips, and that slips weren’t appearing in auto-fill or CRA portals.

“If you do not see a client’s tax slip in Represent a Client or when using Auto-fill my return, we recommend using the slips provided by their issuer (e.g., their financial institution or employer),” the CRA said.

Ryan Minor, tax director with CPA Canada, described the missing slips problem as “pervasive,” citing T5s in particular.

The CRA did not respond to a request for comment.

Weissman said his typical return this year requires him to manually input dozens of items across multiple slips. “There’s more risk of data input errors than if you were downloading from CRA directly,” he said.

Manual data entry requires careful review, said Maureen Vance, a tax software consultant to Wolters Kluwer, CCH. “It’s a huge amount of work and has a lot more potential for error too,” she said.

Confirming that a return is complete is also a challenge, given the missing slips. “It’s hard to go to a client and say, ‘Do you have all your slips,’ because they don’t know,” Weissman said.

Many tax slips are delivered to taxpayers electronically, and taxpayers typically rely on their accountants to download slips from CRA portals. “There’s a real potential for taxpayers to be … missing out on reporting certain income and then potentially being hit with penalties for that later on,” Vance said.

CPA Canada is asking the CRA for “a more forgiving interest and penalties policy,” Minor said. The organization also asked the CRA to delay its matching program, whereby after tax season the agency checks returns against slips in its system. “Maybe give practitioners a little longer to fix the returns,” he said, say, to June 30. “There’s a greater risk this year of missing something. … We’re working on, hopefully, some leniency when it comes to what happens after [filing].”

In recent weeks there were also cases of duplicate slips in CRA portals, which suggests issuers that had trouble uploading slips may have re-submitted them. Minor said the CRA suggested those instances were limited and the agency would rectify them.

Earlier this month, the CRA also notified taxpayers of instances of incorrect error codes in EFILE and NETFILE were preventing the filing of some tax returns, and affected taxpayers would get relief.

Minor confirmed that some CPA Canada members want the CRA to extend the April 30 deadline — “not a ton of people, but we have had calls,” he said. Members have suggested deadlines at the end of May or June 15, the same deadline as for self-employed taxpayers.

But a filing extension is “a big ask,” Minor said.

Still, the past couple of years provide examples of last-minute filing reprieves.

In 2024 and one business day before the filing deadline for trust returns, the CRA exempted bare trusts from filing. And mere hours before the Oct. 31, 2023, deadline for filing the underused housing tax return without penalty, the CRA granted taxpayers a second extension.

While those situations involved flawed rules in the case of bare trusts as well as implementation challenges, they’re good examples of what tax practitioners have dealt with in recent years.

Referring to bare trust reporting, Weissman said, “We’d already done them for clients” ahead of the exemption. “We worked [like] crazy to get the information.”

“Last year I lost thousands of dollars because I had invested in staff and training to get ready for bare trust filings, only to be told ‘not required anymore,'” Litzenberger said in his email. “No one would pay for the time spent on it.”

Now, said Weissman, “we’re [less than] a week away from the end of April and haven’t heard from CRA.”