Glitches plague CRA’s online tax system

Procrastinating Canadians rejoiced at the end of April when a system slowdown at Netfile, the online tax filing service provided by the Canada Revenue Agency (CRA), resulted in a six-day extension of the deadline for filing tax returns.

But concerns are growing in many quarters about the reliability of the online service, as this was the second year in a row that service was interrupted. In March 2007, a software glitch took Netfile offline for nine days.

In a comment to the media, CRA spokesperson Jacqueline Couture emphasized that this year’s problem was a slowdown for a couple of days due to heavy traffic, not a crash. Netfile’s performance was erratic in the final days of tax season, processing returns as expected for some people, but not others.

But it left many filers very frustrated, particularly professional tax preparers transmitting returns in bulk on behalf of their clients.

The slowdown actually had a bigger impact than last year’s outage due to its timing, says Mark Kopstick, partner at Toronto-based Kopstick Osher Chartered Accountants. “Last year’s crash happened early in the tax season, so it didn’t matter as much. But the closer you get to the end of tax season, the more tense things get.”

Tax preparers were left scrambling at the last minute to sort things out, he says. “The CRA usually confirms quickly if it receives a batch of returns successfully, but we didn’t hear back from them. We lost hours of work trying to find out if our files were accepted or rejected, and then making the necessary corrections.”

Be it outage or slowdown, these recurring system issues need to be addressed, he says. “Netfile was started over 10 years ago. At this stage in its maturity, I assumed there wouldn’t be any significant problems even if you file online returns on the second to last day – but I was wrong.”

The CRA has conducted a full review of the issue, says Ken Cochrane, CIO of the Government of Canada at the Treasury Board Secretariat (TBS). “There were a couple of periods when the volume spiked above anything they’ve dealt with before. It’s difficult to predict these peaks once a year. But the CRA reacted swiftly to rectify the system with adjustments within a day or so, and they’re looking at ways to better manage this in the future.”

The Netfile system had trouble processing some of the peak volumes generated by large commercial tax preparers and individual filers this year, he says.

But there’s no question of setting limits on the number of files tax preparers can transmit. “The CRA made adjustments at their end, and it has nothing to do with limiting filers.”

The CRA isn’t prepared to discuss the results of its internal investigation of the slowdown yet, as it hasn’t been finalized yet, according to CRA spokesperson B

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