Reviewed again? Potential 'systemic issue' for northern taxpayers, ombudsman says

The federal taxpayers ombudsman, who's responsible for keeping the Canadian Revenue Agency in check, says she's looking into a possible "systemic issue" for taxpayers in the North.

People who live in the territories for at least six consecutive months qualify for the northern residents deduction, which they claim on their income tax return: $8.25 per day that they lived in Yukon, N.W.T. or Nunavut in the given tax year.

But many people have had those benefits reviewed by the CRA multiple times — consecutive years in a row — and are wondering if northerners' tax returns are reassessed more often than those in southern Canada.

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"We have received a number of complaints on that issue recently," said Sherra Profit, Canada's taxpayers' ombudsman.

"So it is something that we've passed on to our systemic examinations team and it's something we are looking [into]."  

Profit was in Yellowknife and Iqaluit last week, her first trip to the North since she started the job in July 2015.

She says her team is in the early stages of looking into a potential large-scale issue among northern taxpayers — though it's not entirely clear what that issue is.

Profit says the next step is to figure out if the problems she's hearing about are with the service provided by the CRA, which could include northerners being assessed too often, or if there's simply something people don't understand about the assessment process.

'Kind of a pain'

Some northern taxpayers, like Elaine Look, have questioned why they keep getting reassessed while CRA staff continually tell her "they pick it randomly."

Look is Inuvialuit — born in Inuvik, N.W.T. — and has lived in the Northwest Territories her entire life. She travels three to four times a year and claims that on her income tax.

For at least the past four years, she's not only had to scour for her travel receipts from years past to prove her trips actually happened, but she's also had to prove to the CRA that she lives in the North.

"It's kind of a pain," she said from her office in Yellowknife.

"You know, I wish they'd look at your previous tax returns instead of just grabbing one year and going from that. If they looked at the previous ones, they'd see that I've had to prove this multiple times.

"I feel like I have to keep pulling out the same stuff, proving that I live here," Look said.

No targets or exclusions: CRA

Lisa Damien, senior communications advisor for the Canadian Revenue Agency, told the CBC in a written response that there are specific criteria required for people to be reassessed, though she's unable to reveal that criteria.

She said "claims can also be selected at random."

While more than a million reassessments are done each year across Canada, the CRA doesn't track how many are from the North.

"The CRA neither targets nor excludes any specific category of people when reviewing returns," Damien said. "It treats all taxpayers equally using fair and non-discriminatory criteria when selecting returns for review."

It's Profit's job to determine if that's true.

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Profit says if her team does find a systemic issue for northern taxpayers, she would eventually write a report, which would include recommendations to fix the problem. The report would be sent to the Minister Responsible of National Revenue and posted on the taxpayers' ombudsman's website.

It's ultimately up to that minister to implement any possible changes.

Until then, Look continues to rifle through her paperwork for tax returns from 2014, and is starting to think there's a simpler solution.

"Well maybe you go back to the old fashioned way and get your returns at the post office and fill it out there."