Electronic filing for tax preparers

• 2009 income tax and benefit return results by filing method
• Why use electronic filing as a tax preparer?
• EFILE Online, EFILE Online Plus, and the System for Electronic Notification of Debt (SEND)
• electronic filer responsibilities

In the following slides we will cover the 2009 income tax and benefit return results by filing method; the benefits of filing electronically as a tax preparer; the CRA's EFILE services-including EFILE Online, EFILE Online Plus, and the System for Electronic Notification of Debt; and the responsibilities of an electronic filer.

2009 income tax and benefit return results by filing method

Filed by tax preparers (13.38M= 53.3%)	(millions of T1 returns)
EFILE	10.76
Computer-printed	2.56
Hand-prepared	.73
Self-prepared (11.72M = 47%)	(millions of T1 returns)
NETFILE	4.95
TELEFILE	0.40
Computer-printed	2.56
Hand-prepared	3.8
Total	25.1

As of January 2011

This table shows the number of returns by filing method. For the 2009 tax year, tax preparers filed 10.76 million returns using EFILE, and 4.95 million Canadians filed their returns using NETFILE. Of particular interest is the number of returns completed using tax preparation software, but then printed and mailed. These computer-generated paper returns account for 5.11 million returns that could have been submitted electronically. The CRA encourages those who can file electronically to do so, since it saves paper and processing costs, and the taxpayer receives both their notice and refund faster.

Why use electronic filing as a tax preparer?

• secure and confidential
• faster refunds
• greater accuracy
• no paper return to mail
• no receipts to send in
• immediate confirmation

Why file electronically? There are many reasons:

It is secure and confidential; it allows for faster refunds in as little as eight business days with the use of direct deposit; it provides greater accuracy by eliminating the need to key the information provided to the CRA; there is no paper return to mail, and no receipts to send in unless we ask for them at a later date; and finally, you receive immediate confirmation that the CRA has received your clients' tax returns.

EFILE Online, EFILE Online Plus, and the System for Electronic Notification of Debt (SEND)

• EFILE Online – Transmit your clients’ returns over the Internet
• EFILE Online Plus – Transmit up to 60 of your clients’ returns at one time over the Internet
• SEND – With taxpayer authorization and approval from the CRA, you can also access taxpayers’ debt information from the System for Electronic Notification of Debt

For more information, visit www.efile.cra.gc.ca

The CRA offers a service called EFILE that allows registered tax preparers to send current-year individual tax returns to us using one of our two methods of electronic transmission:

• EFILE Online allows you to transmit your clients' returns individually over the Internet. You get an acknowledgement of the individual return instantly.
• EFILE Online Plus allows you to transmit 30 to 60 of your clients' returns, depending on the file format, at one time over the Internet. When you send a batch of returns, acknowledgement takes only a few hours.
• With taxpayer authorization and approval from the CRA, you can also access data from the System for Electronic Notification of Debt (SEND). Discounters prepare tax returns and provide their clients with an immediate discounted tax refund before filing the return. SEND helps authorized discounters determine if outstanding debts exist which might affect the amount of the discounted refund.

Electronic filer responsibilities

• adherence to the Income Tax Act
• maintaining security of sensitive taxpayer information
• computer requirements
• signed documentation
• advertising
• monitoring

For a complete list of electronic filer responsibilities, please visit www.efile.cra.gc.ca and select "Responsibilities" from the left menu.

Being an electronic filer involves a number of responsibilities:

• Tax preparers must adhere to all provisions of the Income Tax Act. Deal directly with your client and do not accept or transmit records from an unregistered preparer. Take care to verify the identity of your client, and make sure there is documentation to support all income, deductions, and credits reported on your client’s return.
• The security of taxpayer information is of the highest importance to the CRA. Tax preparers should take measures to protect the confidentiality of taxpayer information.
• There are a number of computer-related requirements for using the CRA EFILE programs listed on our Web site. To file electronically using either EFILE Online or EFILE Online Plus, you need CRA-certified tax preparation software. For a list of CRA certified software products, visit www.efile.cra.gc.ca
• Your client has to complete and sign Form T183, Information Return for Electronic Filing of an Individual’s Income Tax and Benefit Return, before you send us their return. If you use SEND, each request requires a Form T1153, Consent and Request Form, signed by your client.
• The CRA’s EFILE Web site outlines a number of stipulations on advertising in relation to the CRA.
• The CRA monitors the activities of electronic filers to ensure compliance with our requirements.

For a complete list of electronic filer responsibilities, visit www.efile.cra.gc.ca and select "Responsibilities" from the left menu.