If an individual or a corporate taxpayer wishes to file their income tax return through an electronic filer, they must authorize the electronic filer to do so by completing a T183, Information Return for Electronic Filing of an Individual's Income Tax and Benefit Return, or a T183CORP, Information Return for Corporations Filing Electronically.
Subsection 150.1(4) of the Income Tax Act requires an individual’s signature on these information returns before the electronic filer can transmit the income tax return to the Canada Revenue Agency (CRA). The electronic filer is also required to keep a copy of the information return containing the individual’s signature for six years and may be asked to provide proof of the signed return during the CRA’s monitoring process.
Electronic filers have told the CRA that the need for a signature can create unnecessary complications in the interaction between the tax preparer and the individual. For example, an individual living in a remote location could suffer a financial burden as a result of having to travel to their electronic filer’s place of business twice, once to drop off the information required to prepare their tax return, and a second time to sign Form T183 when the return has been prepared. The tax preparation and software industry have also told the CRA that without provisions for an electronic signature, there are barriers to innovation, thereby limiting efficient and responsible tax filing systems that benefit Canadian taxpayers.
In response to these concerns, the CRA is proposing changes that will allow taxpayers to use electronic signatures for these forms. Under the Personal Information Protection and Electronic Documents Act, an electronic signature means a signature that consists of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to or associated with an electronic document.
Canadians are invited to provide comments on the proposed changes.
The CRA is committed to improving and enhancing the services it offers to Canadians, including digital services, and is continuously striving to ease the burden imposed upon taxpayers and tax preparers when filing income tax returns. To meet the evolving expectations of taxpayers and electronic filers, and to reduce administrative burden, the CRA is pursuing the ability to recognize a Form T183 or T183CORP that contains an electronic signature as having met the signature requirements of the Income Tax Act. An electronic signature would provide taxpayers and their representatives with further options to have these information returns signed. Electronic filers are already responsible for verifying the identity of the taxpayer, both to protect their own interests and the integrity of the tax system. This will not change.
This proposal would require subsection 150.1(4) of the Income Tax Act to be added to Schedule 2 of the Personal Information Protection and Electronic Documents Act. In conjunction with this change, regulations would be introduced to reflect that electronic signatures that meet specific requirements will be accepted for information returns (Form T183 and T183CORP) made under that subsection. In order for the CRA to accept an electronic signature from a taxpayer whose identity has been verified by the filer, the electronic signature will generally need to be provided in one of the following ways:
i. It may be provided if the taxpayer sends the information return, including the electronic signature using the electronic address most recently provided by the taxpayer to the electronic filer;
ii. It may be provided in person by the taxpayer, in the presence of the electronic filer. e.g. using a stylus or finger on a tablet; or
iii. It may be provided through an access controlled, secured electronic location such as a secure website, that is accessible to the taxpayer only because the location of the secure website has been made known to the taxpayer and access has been granted by the filer.
The number of tax returns filed electronically by tax preparers continues to grow and industry stakeholders have been requesting this change. The proposed change is expected to better meet the needs of this population, and will reduce an unintended burden that the current signature requirement imposes on some individuals.
Thank you to all who provide feedback on this regulatory proposal. The consultation will close on March 4, 2020, and your feedback will be considered.
Please limit your response to approximately 500 words.