Liaison Officer Initiative (LOI)
One component of the CRA's three-point plan
The Canada Revenue Agency (CRA) is working hard to improve its services, so that small and medium-sized businesses can more easily fulfill their tax obligations while saving time and money, and cutting red tape. The Liaison Officer Initiative (LOI) is one component of the CRA's three-point plan to help small and medium-sized businesses meet their tax obligations. Through the LOI, businesses receive in-person support at key points of their business cycle, and information that will assist them in understanding their rights, navigating the tax system, cutting through red tape and more easily complying with their tax obligations. Early support and certainty help the CRA too. By identifying emerging issues and addressing questions earlier on, the CRA can stop them from developing into more serious problems that are expensive for the Agency and taxpayers to resolve.
While audits remain a part of the continuum of tools available to the CRA to ensure compliance, this initiative shifts the balance of the CRA's compliance approach to also include activities that are proactive and provide support to the taxpayer before costly and time-consuming audits may be necessary. The activities conducted under the LOI are also geared to providing timely education and building stronger relationships between the CRA, individual taxpayers, and industry sectors.
The LOI offers a number of activities. Selected small and medium-sized businesses that voluntarily choose to participate will benefit from one, two or all of the following activities:
- Small Business Support Visits: Personalized information can go a long way in helping businesses get it right. Liaison Officers (LO) will visit a taxpayer's place of business on a voluntary, one-to-one basis to provide income tax support and guidance. LOs will address tax-related questions and concerns raised by the taxpayer, provide general information on tax obligations, and advise the taxpayer about unintentional or recurring errors common to the taxpayer's industry or business sector.
- Books and Records Review: Poor record keeping is one of the most common contributors to non-compliance among small businesses. The LO will review the taxpayer's books and records and provide advice and guidance on their accuracy and completeness, so that any potential problems can be addressed prior to tax filing.
- Compliance Support Arrangement (CSA): Following a visit or review, or when information has been provided, in order to reinforce the opportunity for learning and awareness, LOs may ask taxpayers to sign a CSA as an acknowledgement that they have understood the nature of their tax responsibilities, those of the CRA and the information they received. Taxpayers may be invited to sign the CSA, which highlights the key responsibilities of both parties, identifies unintentional or recurring income tax errors that are common to the taxpayer's business sector and outlines industry benchmarks that the taxpayer can use to compare their performance to the sector in general.
Small and medium-sized businesses may be asked to participate in one, two or all three of these activities.
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