Wednesday, February 6, 2013

Why Does CRA Limit Us to 20 Tax Returns Per Computer?

Vendors of personal income tax software impose various limits on the number of returns you can file. However, CRA imposes a hard limit of 20 returns per computer. Why?

The seventh entry in CRA’s NETFILE FAQ answers this question. The explanation begins with “The CRA's primary interest is always to protect the taxpayer.” This gave me a chuckle. I can believe that protecting taxpayers is high on their list, but their primary interest is to suck up giant piles of money. OK, moving on.

The rest of the explanation is a little vague, but the concern seems to be identity theft. I guess an identity thief with personal information on many Canadians could cause trouble on a large scale with unauthorized use of NETFILE.

So there you have it. Anyone who wants to file more than 20 returns needs to NETFILE with multiple computers or could use EFILE which is intended for tax preparers.

5 comments:

  1. Or you can use "StudioTax" which works great and has been free for the last few years.

    http://www.studiotax.com/

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  2. If an identity thief is smart enough to have more than 20 sets of returns to file, then they probably can work around this "hard limit".

    - Virtual machines
    - wifi hotspots
    - various tax prep software

    Seems like an attempt to "provide security" so tax payers feel safe about filing their taxes online.

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    1. @Paul T: You're right that ther are many ways around the limit of 20. I suppose that the policy at least makes the identity thieves do some work to be able to file thousands of returns.

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  3. It's possible CRA has one other motive: To ensure paid Tax Preparers use the Efile service, so they cannot side step their identity as a "professional" preparing multiple returns. CRA like to track "pros" lest a professional continually makes the same mistake, or continually uses the same (not legal) technique to assist clients in evasion.

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    1. @Doug: Interesting. Thanks for the insight.

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