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Is CRA Going Easy on Tax Cheats?in Canadian Government News and Updates
Since receiving this first list four years ago, the CRA has failed to put a single account holder in jail. Despite this fact, the CRA still claims that they are doing all they can to ensure tax cheats are made accountable for using offshore accounts to avoid paying taxes. But seeing that most of the illegal offshore account holders were made to pay their fair share of taxes through the Voluntary Disclosure Program, a lot of people seem to think otherwise.
The Voluntary Disclosure Program allows taxpayers to volunteer information about their illegal accounts without fear of penalty.
According to the reports given by CRA to the Financial Post, 446 Canadians have availed of the Voluntary Disclosure Program to disclose secret UBS accounts of which a total of 336 have been processed, resulting in a previously unreported income of $67 million. In addition to this, 124 individuals reported their hidden accounts with HSBC of which 73 have been processed, resulting in a previously reported income of $17 million.
The CRA also disclosed that among those who did not avail of the Voluntary Disclosure Program in 2010, it won 7 criminal convictions resulting in a total of 78 months jail time. However, out of 7 of these convictions, at least 3 were related to an investigation into organized crime in the Montreal construction industry involving Nicolo Rizutto, one of the country’s notorious Mafia figures
This entire CRA stance towards tax cheats seem like a very soft approach compared to what the United States has been doing. The IRS has been aggressively hounding suspected illegal account holders, pressuring offshore banks to disclose information on any accounts held by a US citizen.
Reference: “CRA claims it’s chasing down tax cheats” by John Greenwood, September 30, 2011, http://business.financialpost.com/2011/09/30/a-taxing-pursuit/