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Tax Return Scam

Anyone else finding out that CRA is showing Tax Returns as being received when nothing’s been done yet because we just received the client’s papers?

No but we submitted my mother’s death certificate and the will a long time ago and we still don’t have access

“Anyone else finding out that CRA is showing Tax Returns as being received when nothing’s been done yet because we just received the client’s papers?”

Sounds strange.

For EVERY one of those,
I would suggest that it is ESSENTIAL to check with CRA - IMMEDIATELY, to ensure that a CERB application has NOT been made under that client’s SIN.

Unfortunately you CANNOT check to see if a client’s Direct Deposit BANK ACCOUNT has been diverted.

Online “MyAccount”, or calling CRA directly would need to be done BY THE CLIENT.

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Yes, I have one… no idea what happened…

interesting, never thought of that

did the assessment match the data you have?

These are or were being stockpiled with no one working on them. I did receive a response to one similar to yours - I was surprised to receive it so soon. I had to return it with more information so see how long it takes the second time around. The people in that department were not at work due to covid - and it just might make a difference what tax office they are working in. Mine went to Sudbury where there weren’t a lot of covid issues.

This is all related to identity theft…perhaps related to the Desjardins breach last year…hard to prove, but the fraudsters use the stolen SIN #s, change the Direct Deposit information and file a return with your SIN. They also do CERB applications as mentioned by joe.justjoe1.

Same here. Still waiting. Four months and counting.

Nope. Happy to say that all my regulars are eFiled, long since. Only about a half-dozen regularly tardy clients not filed, and all show as not filed. Phew.

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No, but I saw this this morning. Along the same lines: https://www.reddit.com/r/PersonalFinanceCanada/comments/i11pan/cra_account_compromised_fraudster_applied_for/

@paul
You did not state whether you filed the tax return or someone else did.

IDENTITY FRAUD
Identity fraud is becoming more common. Filing a fraudulent tax return based on identity fraud needs to be actioned immediately. CRA has a special unit in each region to investigate and correct this.

MISTAKEN SIN
Mistaken SIN needs to investigated and corrected.

  1. Occasionally I have seen a T4 SIN error, usually made by micro-business owners. Notify the issuer and/or CRA employer services.

  2. A tax office error. I have seen some data entry errors on a SIN for a paper filed return which was sent out. There are prevent from filing blocks in eFiling but not in Paper Filing. Notify CRA immediately.

  3. Recently I worked a Corporate Tax client who provided her Alberta Corporation six-digit corporate access number to her investment advisor instead of her Business Number. For the past fifteen years, the wrong CRA number has been used to record and report her capital gains. Notify the client. the client needs to notify the investment firm. The investment firm needs to notify CRA.

There can be several legitimate reasons for a tax return to show as received. During the past 20+ years I have experienced each of the following. Tax Returns that I did not explicitly file but which are shown as RECEIVED:-

  1. Loss carryback.
    The prior year’s return is adjusted to carryback the capital loss. In this case, the prior year’s return will show as RECEIVED until it has been processed and assessed.

  2. Lump sum payment.
    If you have received a lump sum payment that is eligible for a multiple year best calculation review, then CRA may apply that income to a prior year.

  3. CRA initiated change.
    If CRA has determined that a change to the return must take place due to a CRA program then the return will show as received pending the adjustment. Types of CRA programs include slips matching, post-assessment review, special programs review, an internal CRA update to carry forward balances, and an accounting adjustment for reapplied payments.

  1. Efiled with pre-assessment review.
    The file will show as received but no action will appear to take place until the Pre-Assessment Review letter has been generated and the reply or failure to reply has been assessed.

  2. Paper filed via fax or mail.
    Sometimes but not always a paper filed returned sent via fax or mail will show as filed but not assessed. This happens especially at the calendar year-end. This indicates that the paper filed returned has been logged and scanning and is in the processing queue. When processing queues are very long then the received indicator will remain for a long time.

  3. Paper filed under the Voluntary Disclosure Program (VDP), under Immigrant/Emigrant Return, or paper filed with a new Disability Tax Certificate application.
    Each of these return types require two processing steps - Initial Processing and Specialist Processing. This can add anywhere from 6 months to 18 months to finalize the assessment depending on the processing queues.

  4. Prior year returns late-filed via paper or efiled.
    During tax season and during the peak of CRA post-assessment review times, prior year late-filed returns are given lower priority and sit in the assessment queue for a long time. This is true for most late filed paper returns. This can be true for complex efiled returns where a send level assessor or a specialist assessor must action the return before it can be finalized.

  5. Multiple years returns filed and/or multiple family member returns filed at one time.
    Sometimes returns are held until all the years of assessed especially when there are carryover amounts or multiple family member claims.

  6. CRA Collection etc.
    When a client is in CRA Collection, income garnishment, or seizure of bank account funds, then there is often a second and sometimes a third level of assessment review before the return is finalized. This can take two weeks to two months depending upon the time of year and assessment backlog.

  7. CRA Benefits Change
    CRA Benefits can initiate the change based upon a post-assessment review or a program. The outcome may affect multiple tax years. In that case, you need to review both CRA Benefits as well as CRA T1 Enquiries. Three simple examples of situations that result in a CRA initiated tax assessment change are: 1) the date of province move, 2) the date of marital status change, and 3) the date of child custody change. These can result in both a tax return adjustment as well as a refund clawback or assessment increase or decrease.

  8. Third-Party Garnishment of CRA Refund.
    CRA administers collection on behalf of several third party government collections. Although these have not resulted in tax returns showing as received these do affect the CRA statement of account.

  9. CRA Programs.
    Sometimes there is an assessment hold depending upon one or more CRA criteria such as an aggressive or suspect tax claim, a flag on the file, or a special CRA review program. Then the tax return will remain in limbo until that program or team takes action. This can add anywhere from two to twelve months or more to the processing time.

  10. Lost at CRA.
    Occasionally a tax return can sit idle at a station and be totally lost at CRA. In this case it must be tracked down by the CRA Tax Services Department’s Assessment Team Leader. This happens occasionally but it does happen. The reasons are varied - assessor sick, assessor moved to another position, assessor did not complete the return for a variety of reasons, assessor forwarded the return to another team which did not action it. Occasionally the return may be canceled in error in which case it disappears altogether.

So, there are many triggers for a CRA tax return to show as received even if you have not filed it.

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