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Responsibilities of a Tax Representative

tax representative has to cover for his client as a tax consultant, accountant, and an expert witness; all rolled into one. An authorized tax representative has to protect the interests of his or her clients. The representative has to agree that there will be no information disclosed concerning a client to a third party and also will not disclose any information that is provided to him or her by the CRA to anyone else in the absence of the taxpayer’s consent.

The tax representative has to make sure about the privacy of all the transactions that are conducted on behalf of a client or a taxpayer. All the documents have to be disposed of properly so that the confidentiality of a taxpayer is protected. The representative has to comply with all applicable legislative provisions like the Income Tax Act or the Goods & Services Tax Act and the Excise Tax Act. It has to be remembered that the CRA has the right to revoke the privileges of an authorized tax representative if he or she fails to comply with the terms and conditions governed under the contract of negotiation between the CRA and the taxpayer.

The tax representative has a responsibility of providing accurate information to CRA. There is a penalty if false information is provided intentionally under subsections 239(1) of the Income Tax Act.

When selecting a tax representative, you require someone who is specialized in tax resolution as tax dealing is a very broad topic. A specialist as a tax representative could be a good option based on any tax situation. If any tax activities involve some element that can be described as tax avoidance and the representative happens to be a specialist who is conversant with all CRA procedures, it would help the taxpayer a great deal.

Tax accounting firms assign a tax representative who is a licensed accountant as well as a tax specialist. The chances of facing an audit by the CRA will reduce if your representative is a tax specialist and a licensed accountant who can handle the toughest tax returns. Even if there is an audit by the CRA, the tax representative will be in a position to explain how the numbers have been arrived at on the returns.

The track record of a tax representative is of high importance. The credentials of a tax consultancy firm have to be high. An interesting standpoint with these tax consultancy firms is that they can be aggressive in their dealings with the CRA as they do not have the fear or the risk of losing their licence. If the consultants deal regularly with CRA, the taxpayer should not have any hesitation in placing full trust in their capabilities.

The tax representative can act as an expert witness also and defend a taxpayer in General Procedures in tax courts. The function of a tax representative as an expert witness is to help the court by providing an independent opinion about tax matters within his or her expertise. The evidence given by the expert witness when called to testify is an independent testimony and cannot be influenced by the CRA.