Koroll & Company Blog

By now, all Canadian taxpayers should have their 2017 income tax filed. While it is a relief knowing that your taxes have been filed, it is not time to forget about taxes altogether. Instead, you should be focused on planning for your 2018 taxes.

Doing so, in advance of tax filing season, will ensure that you take full advantage of the opportunities available to you. To do this, it is always best to reach out to a professional tax preparer, such as Koroll & Company, who can help you come up with a tax strategy.

In most cases, especially when you own a business, your tax professional will need access to your tax information so that they can better understand your current tax position and help you make the best decisions possible.

The problem is, the tax affairs of an individual or business are confidential and therefore protected. The only way that a third party, including family, employees, or tax/accounting professionals, can obtain information regarding someone else’s tax information is to be given access by the taxpayer.

To do so, the taxpayer must fill out form T1013(E), Authorizing or Cancelling a Representative, and file it with the CRA. This form can be filled out and mailed to the CRA or you can register a representative online using My Account.

When filing a T1013(E), it is important to review it carefully. While your tax preparer or accountant needs access to information regarding your taxes, you must always remember that the consequences of granting access to your private tax information can be more extensive than one may presume.

Choosing the Right Level of Access

Firstly, you want to consider the purpose for giving your tax professional access to your information so that you can select the appropriate level of access.

There are two levels of access that can be given to a representative:

Level 1 gives your representative the right to obtain information. Specifically, the Canada Revenue Agency (CRA) can provide a Level 1 representative with the following information:

• Information on your income tax return.
• Adjustments made to the return.
• Information regarding RRSPs (Registered Retirement Savings Plans) and the Home Buyers’ Plan.
• Information regarding TFSAs (Tax Free Savings Accounts).
• Information regarding LLPs (Lifelong Learning Plans).
• Tax account balances.
• Payments on Filing.
• Instalment payments and transfers.
• Information about benefits and credits.
• Marital status.

Representatives with Level 2 Authorization, on the other hand, not only have the ability to obtain this information but also make changes to tax accounts on your behalf. This means they can:

• Effect accounting transfers.
• Request adjustments on income, deductions, and non-refundable credits.
• Obtain personalized remittance forms, such as those used for GST remittances.
• Request relief on behalf of the taxpayer through the Tax Relief Program.
• File a Notice of Objection or Notice of Appeal.

A representative is never, no matter the level, able to make changes to your address, marital status, or direct deposit information. They also cannot make changes to representatives on file nor can they get information about the taxpayers children or apply for child benefits.

Deciding Who Will Have Access and For How Long

In addition to deciding the level of access your representative will have, you also need to consider how your representative will be able to contact the CRA on your behalf and for how long.

Part II, Section B will give your representative permission to contact the CRA by phone, in writing, or in person, whereas Section A will grant them permission to access information by phone, writing, in person or online.

While you can limit the length of access in Section B, granting your representative online access along with access through other means using Section A, gives them access for an unlimited period of time, or until you remove them as a representative.

Giving Access to a Company or an Individual

Lastly, you must decide whether you are granting access to an individual or a company. If you grant access to an individual, only that one person can access your information. On the other hand, if you grant access to a business, everyone employed by that business will have access to your tax information.

Understanding the options available to you when authorizing a representative and understanding what you are agreeing to is critical, because, even at the lowest level, you are granting your tax preparer access to substantial personal and financial information.

For more information on authorizing a representative, or to have our team help with the submission of tax documents, contact us today.