FOR IMMEDIATE RELEASE:
March 15, 2006

19% of Canadians admit to missing the tax deadline; 70% of respondents do not know the first official day to submit their tax returns

March 15, 2006 - Montreal, Quebec - When it comes to preparing and filing taxes, many Canadians are shortchanging themselves on potential tax refunds, or setting themselves up to incur monetary fines due to late filing. Fully 19% of Canadians polled admitted to missing a tax deadline in the past, and 28% feel they have likely overlooked a tax write-off or exemption.

The survey, commissioned by UFile, makers of the widely popular UFile for Windows and UFile.ca tax preparation software, suggests that the reason Canadians overlook potential write-offs, or file late, is that they take a last minute approach to preparing and filing their taxes. In fact, 70% of respondents answered that they do not know the first official day they are eligible to submit their tax returns, and almost half of Canadians surveyed, or 47%, file in April, the deadline month in which to submit returns. And while 48% of respondents required three hours or less to complete their taxes, 32% have found a charitable donation receipt or other write-off receipts after the have filed their taxes.

The report is based on poll data collected by Decima Research on behalf of UFile. All interviews were conducted among a random representative sample of adults across Canada. With a sample size of 1012 completed surveys, the results can be considered to be accurate to within +/- 3.1% 19 times out of 20.

Statistics supplied by the Canadian Revenue Agency (CRA) show that 11.6 million returns filed in 2005 were on paper, or about 49% of all returns. Of these, approximately 6.5 million returns were completed without the use of tax preparation software.

"This survey reveals that the tax filing habits of many Canadians may inadvertently cost them money," says Joanne Birtch, UFile's Director of Marketing and Communications. "It is clear that tax payers need some guidance and advice, either from a tax professional or tax software on how to best to complete and submit accurate tax returns to ensure they are able to get the best returns possible for themselves and their families."

Thirty-five percent (35%) answered that they sometimes or never used tax strategies to reduce the amount of tax they pay. But the opportunity costs for Canadians that submit an inaccurate return can be substantial. Canadians were asked how they would spend their refund, should they get one. To those who plan on reinvesting their money (30%), a smaller refund, or waiting longer for a return due to a late filing, directly affects the amount of money and time to develop a stronger return on those investments. To those who plan on paying down debt (35%), interest accrued on that debt would only continue to grow.

According to the CRA the late filing penalty is 5% of your 2005 balance owing, plus 1% of your balance owing for each full month that your tax return is late, to a maximum of 12 months. If the CRA charged a late-filing penalty on your tax return for 2002, 2003, or 2004, your late-filing penalty for 2005 will be 10% of your 2005 balance owing, plus 2% of your 2005 balance owing for each full month that your return is late, to a maximum of 20 months.

In real terms, for every $1000.00 of tax owing 2 months after the filing deadline, a first-time late filer would be required to pay $70.00 more than he/she would have paid had the return been filed on or before the April 30th filing deadline.

From 2004-2005 the CRA saw a 16% increase in electronic filing from either a web-based or desktop tax preparation software. This suggests that Canadians are taking advantage of products like UFile to guide them through the submission process, uncover potential deductions or credits, speed the time to file their tax returns, and subsequently receive their refunds quicker than submitting by conventional mail.

Poll results broken down by region, include:

Knowing and Meeting Deadlines:
When asked if they know the date of the first official day to file your taxes, Quebecers were the most knowledgeable at 30%, followed by Ontario (26%), the Atlantic Region (24%), Alberta (23%), Manitoba/Saskatchewan (21%), and B.C. (20%).

Close to half (48%) of all respondents required 3 hours or less to complete their taxes, with those in the Atlantic region the quickest at 66%. Ontarians (19%) take the longest time - four or more hours - to complete their taxes, followed by Manitoba/Saskatchewan (17%) and Albertans (15%).

1-in-5 overall admit to having missed the filing deadline at some time. Ontario (24%) and BC (26%) tax filers are more likely than those in other provinces / regions to have missed the deadline at some time. This is followed by Alberta (19%) and Manitoba/Saskatchewan and the Atlantic Region (14%). At 12%, Quebecers are least likely to have missed a deadline. Men (22%) are somewhat more likely to have missed the deadline at some time versus women (17%).

Do you know the date of the first official day to file your taxes?

Honestly speaking, have you ever missed the filing deadline before?

Refund Disposition:
Regionally, Atlantic respondents are the most likely to use their refund to pay down debt (45%), followed by Alberta (39%) and Manitoba/Saskatchewan (39%), as are those aged 35-44 (49%) and 25-34 (43%). Alongside Quebecers, Atlantic respondents are also the most likely to use a tax refund to subsidize a holiday (Quebec 17%, Atlantic 14%, versus a national average of 10%). Finally, Atlantic respondents are further distinguished as being the least likely to use a refund to make an investment at 23%, statistically lower compared to Ontario and Manitoba/Saskatechewan at 32% each, followed by Quebec (30%) and Alberta (28%).

If you have a refund this year, what will you do with you return dollars?

Tax Strategies:
35% "always" use tax strategies, 35% "never" do so, and 25% do so "sometimes". These results vary significantly by region and age, however: Western and Ontario respondents are the most likely to "always" do so, whereas Quebecers and Atlantic region respondents are most likely to "never" do so. Similarly, all age segments over the age of 24 are more likely to either "sometimes" or "always" use strategies to reduce their tax burden compared to "new" taxpayers aged 18-24, close to half of whom have not done so to-date.

Please indicate whether you always, sometimes or never use tax strategies to reduce the amount of tax you pay

Completing Taxes With or Without Help:
Overall, 1-in-4 complete their taxes on their own, with those in the Atlantic region most likely (32%), and Quebecers least likely to do so (17%). Another 1-in-4 collaborate with a family member to complete their return, and overall 41% engage the services of an accountant. Age correlates positively with likelihood of either completing one's return on one's own or with the help of an accountant, whereas "new" taxpayers (those aged 18-24) are the most likely to rely upon the assistance of a family member to complete their return.

Write-Offs:
Quebecers (74%) are the least likely to miss a tax write-off or exemption, followed by those in the Atlantic Region (69%). British Columbians (18%) are most likely to miss a write-off or exemption, followed closely behind by Ontarians (17%).

Have you ever found a charitable donation receipt or other write-off receipts after you filed your taxes?

About Dr Tax Software
Dr Tax Software Inc. is a privately-owned, Canadian company located in Montreal, Quebec. It is a leading provider of tax preparation products and has served the professional tax community with personal and corporate tax products for over 15 years. Dr Tax's UFile products include Ufile.ca (online tax software), UFile for Windows and UFile Pro. UFile.ca powers the tax centre for Canada's major Web portal, Sympatico.MSN.ca. UFile for Windows is available exclusively at Future Shop, Best Buy and online at www.ufile.ca.

About UFile Products
UFile for Windows can prepare tax returns for all provinces and is available in French as ImpôtExpert.ca. Those who choose UFile can take advantage of the program's unique QuikClik Interview process and MaxBack refund analyzer, which saves money by finding every possible deduction and transfer to minimize your taxes and maximize your refund. This year's version also includes updated and intuitive help functionalities, as well online support built directly into the product.

UFile for Windows is available exclusively at Future Shop and Best Buy for $19.99, or online at www.ufile.ca starting at $14.95. The online version of the product is available for free to students and Canadians making under $25,000 a year. Both UFile.ca and UFile for Windows use the same easy-to-learn method and tax calculation engine.

For more information please contact:

Joanne Birtch
Director of Marketing and Communications
Dr Tax Software Inc.
905-845-0908 or 1-800-834-5322