At the start of the pandemic, Horovitch completed her first tax office seasonal contract and was unsure what to do next. To generate some income she shared in a Facebook group about her experience of avoiding taxes for self-employment for ten years, the CRA’s unnerving efforts to get her to file, and the lessons learned on her journey to overcome financial illiteracy. She encouraged people with messy situations to reach out for a different type of help, and the post exploded with comments that triggered a stream of people messaging her to see if she could help. Since then referrals and testimonials generate most of her clients.
Why it happens is largely a mystery, but Horovitch feels it’s likely due to a key difference in the tax systems of the USA and Canada: Americans are generally taxed low on their paychecks, and then owe a balance of income tax to the IRS the following year, while Canadians are taxed much higher on their paychecks and so most tax returns have refunds.
According to the EFILE Association of Canada, the 2021 tax season saw 74% of tax returns had a refund amount, or would likely qualify the taxpayer to receive benefits (Nil returns). As a result, the CRA focuses the majority of their resources on the people they know are most likely to owe taxes, and this allows anxious Canadians to continue avoiding filing their back taxes.