Fraud fears prompt revenue agency to tighten checks on volunteer tax helpers

OTTAWA — The federal revenue agency is stepping up scrutiny of volunteers who help prepare income-tax returns after a suspected fraudster was spotted at a tax clinic.

The Canada Revenue Agency is phasing in new screening measures over two years, including a mandatory police records check for the 2016 tax filing season.

For more than 40 years, the agency's community volunteer income-tax program has helped low-income Canadians and others who need assistance filling out their tax forms.

The agency sponsors and promotes the program, but organizations and volunteers are not formally affiliated with the federal department.

"Consequently, it is essential that the CRA continue to work with the community associations and volunteers to protect the integrity of the tax system and deal promptly with issues that arise," says a September 2014 briefing note prepared for Revenue Minister Kerry-Lynne Findlay.

Late in the 2014 filing season, the agency learned that a volunteer who had previously been charged with fraud was seen at a tax clinic preparing returns, says the note, obtained by The Canadian Press under the Access to Information Act.

The agency immediately notified the affected taxpayers and flagged their accounts. It also developed program changes to "prevent a recurrence," the note adds.

Canada Revenue Agency spokeswoman Jennifer McCabe declined to make anyone available for an interview. But in an emailed statement, she indicated the agency's key concern is theft of sensitive personal information by unscrupulous volunteers.

"The CRA understands and appreciates that volunteers are motivated by the public good," McCabe said.

"At the same time, given the increase in financial crime and tax fraud schemes in Canada, the CRA is enhancing the controls used to support community organizations and their volunteers in appropriately safeguarding the personal information of taxpayers."

Volunteers must now register through a new online portal and declare that they have not been convicted of tax fraud or any other criminal offence.

In addition, each volunteer must get their own EFILE (electronic tax filing) certificate — a process with built-in screening — rather than use the master certificate belonging to a community organization.

The revenue agency is also encouraging the many members of Parliament who hold tax clinics to partner with a community organization.

Starting in autumn 2015, new volunteers and those with the program for less than five years will be required to obtain a police records check.

Many participating community organizations already require a records check, McCabe noted.

Still, the new security rules are being introduced gradually to prevent "significant loss" of volunteer participation, the briefing note says.

Having one's fingerprints taken by police or a private service — the first step in the criminal records check process — often involves a modest fee.

Since many organizations involved in volunteer tax preparation don't have much money, it could mean volunteers footing the bill themselves, said Rick Downton, who has been helping seniors and the disabled do their taxes in Cambridge, Ont., for about 17 years.

Downton, a retired college instructor, offers help year-round from his home office, doing more than 100 returns annually with no help or outside funding.

"If this gets much bigger, I'm going to have to probably look at a couple of other people to maybe come on board to give me a hand," he said in an interview.

And that would mean ensuring they get criminal records checks, he said.

"I've got mixed feelings on it, but I understand everybody's trying to make sure that they're doing their due diligence."