CRA signs secret settlement with wealthy KPMG clients involved in offshore tax scheme
---------- Original message ---------- From: Ministerial Correspondence Unit - Justice Canada <mcu@justice.gc.ca> Date: Mon, 30 Dec 2019 17:35:08 +0000 Subject: Automatic reply: KPMG To: David Amos <motomaniac333@gmail.com>
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---------- Forwarded message ---------- From: "Min.Mail / Courrier.Min (CRA/ARC)" <PABMINMAILG@cra-arc.gc.ca> Date: Fri, 27 Dec 2019 18:43:30 +0000 Subject: KPMG To:
Dear Taxpayer:
Thank you for your correspondence regarding the KPMG case, which attracted media attention. Thank you also for your understanding regarding the delay of this response.
As Minister of National Revenue, my goal is to make sure the Canada Revenue Agency (CRA) offers services that are fair, helpful, and easy to use. This continues to be my priority and my focus as I devote my efforts to delivering tangible results to taxpayers.
Although I cannot comment on a specific case, I can give you the following general information. Settlements are concluded independently from the Minister of National Revenue and the Minister's Office to ensure the integrity of the tax system. They involve an independent process within the CRA, in collaboration with the Department of Justice.
In tax disputes, there is limited flexibility on settlement amounts because CRA tax disputes are subject to the legal principles set out in the Income Tax Act. The CRA is bound by the principles of tax law and the rules arising from Canadian tax legislation. For example, when a tax dispute involves an amount of $50,000, the taxpayer and the CRA can agree on a lesser amount only if the determination of this amount is based in law.
Settlements can also resolve tax issues that are not before the Court. These settlements are carried out through an agreement called "minutes of settlement," which is signed by a CRA official and the taxpayer. Because this agreement is not public, taxpayers may see the use of settlements as a lack of transparency. This is why I have asked the CRA to review its procedures to find ways it can ensure greater transparency regarding why it enters into settlements. Taxpayers expect the tax system to be fair and equitable, and the CRA works continuously to make sure that it is.
The CRA remains committed to combatting tax evasion and aggressive tax avoidance. Individuals who participate in illegal tax strategies must face the consequences of their actions, and taxpayers expect nothing less.
I appreciate the opportunity to respond to your concerns and trust the information I have provided is helpful.
Sincerely,
The Honourable Diane Lebouthillier Minister of National Revenue
CRA signs secret settlement with wealthy KPMG clients involved in offshore tax scheme
2142 Comments Commenting is now closed for this story.
David Amos Methinks
the Feds and KPMG or all theri lawyers and beancounters will never
explain how their actions generated this file long ago N'esy Pas?
David Amos Methinks my fellow taxpayers should Google the following sometime soon then pick up the phone and call their MP N'esy Pas?
Diane Lebouthillier David Amos KPMG
Troy Bodi For the rest of us they'll hound you for months for that $16 you owe them.
David Amos Reply to @Troy Bodi: Methinks the CRA and Harvey Cashore should review their emails N'esy Pas?
Troy Bodi Reply to @Jim Roth: Who cares which government is complicit. It shouldn't be happening period.
David Amos Reply
to @Troy Bodi: Methinks the CRA and Harvey Cashore should have reviewed
their emails by now particularly after I made a few calls as well N'esy
Pas?
Mo Bennett Reply to @David Amos: this is what happens when you put a former social worker in charge of money.
Richard Dekkar No surprise, especially when you consider the head of KPMG’s public sector practice was the chief fundraiser for the Liberals.
David Amos Reply
to @Richard Dekkar: Methinks my fellow taxpayers should Google the
following sometime soon then pick up the phone and call their MP N'esy
Pas?
Diane Lebouthillier David Amos KPMG
Lily O'Loughlin Once
again the wealthy get away with not paying their fair share of taxes,
but CRA is very quick to track down anybody who owes them $50.
Michael Philips Reply to @Lily O'Loughlin: I know of an elderly Lady who owed the CRA past taxes.
If she paid the taxes she could not buy her medicine, the CRA rep told her to pay the tax bill .
Bill Dixon Reply to @Lily O'Loughlin: A buddy of mine is an investigator and auditor with the CRA.
Years ago, they brought in a performance criterion based on the number
of closed files, as opposed to the value of recovered taxes. My guess
is that CRA leaders wanted to be able to brag about how many files and
investigations are successfully closed (e.g., "We successfully recover
tax in 97% of cases!", as opposed to "In the 97% of cases we close, we
recover 9% of money owed to the Govt of Canada... because unfortunately
the 3% of files we don't close are whales that are worth 93% of the
money owed... Oops.") [- this is a purely fictitious scenario I just
made up, but you see my point]
He's always been involved in investigating large criminal tax dodges
that take years to unravel and bring to a close. Consequently, he was
always been ranked quite low in year-end reviews, relative to his
colleagues who follow up on very small files and small amounts owed.
In his words, that system in CRA incentivizes auditors to vigorously
chase small fish and files, and ignore the big files and large amounts
that are exclusively the result of the illicit behaviour of the rich and
the accountants they employ to avoid paying tax
Sebastian Scheele Reply
to @Bill Dixon: That is also easier for the CRA, to harass the small
fish that does not have the means to fight back... :(
Sour PJ Reply to @Bill Dixon: WOW...
David Amos Reply
to @Sebastian Scheele: "That is also easier for the CRA, to harass the
small fish that does not have the means to fight back... :( "
True but sometimes there are small fish with very sharp teeth that can
make the boss of the taxman have a panic attack and quit his fancy job.
Methinks the other little fish should Google my name along with KPMG,
CRA and IRS N'esy Pas?
David Amos Reply
to @Bill Dixon: "In his words, that system in CRA incentivizes
auditors to vigorously chase small fish and files, and ignore the big
files and large amounts that are exclusively the result of the illicit
behaviour of the rich and the accountants they employ to avoid paying
tax."
BINGO
FYI The snobby accountants the rich employ call themelves "Gatekeepers"
and are always attached to powerful law firm just like KPMG beancounters
are,
Surf the net and you will see that I am a whistleblower against them all. Try Googling "Harper and Bankers'
Ed Riley WOW just WOW
This Liberal government sure loves secret out of court deals.
Second one reported JUST TODAY.
Oct. can't come soon enough !!!!
David Amos Reply to @Ed Riley: "Oct. can't come soon enough !!!! "
I concur
Greg Crompton And the hits just keep on coming. Why isn't this on the first page?
David Amos
Reply to @Greg Crompton: "Why isn't this on the first page?"
Methinks whereas the circus has been so busy lately this is considered a sideshow N'esy Pas?
CRA signs secret settlement with wealthy KPMG clients involved in offshore tax scheme
Watchdog group accuses the Liberals of covering up the KPMG affair
The
Canada Revenue Agency has made an out-of-court settlement with wealthy
KPMG clients caught using an offshore tax scheme that it previously said
was 'intended to deceive' tax authorities. (CBC)
The Canada Revenue Agency has once again made a secret out-of-court settlement
with wealthy KPMG clients caught using what the CRA itself had alleged
was a "grossly negligent" offshore "sham" set up to avoid detection by
tax authorities, CBC's The Fifth Estate and Radio-Canada's Enquête have learned.
This, despite the Liberal government's vow to crack down on high net-worth taxpayers who used the now-infamous Isle of Man scheme.
The scheme orchestrated by accounting giant KPMG enabled clients to
dodge tens of millions of dollars in taxes in Canada by making it look
as if multimillionaires had given away their fortunes to anonymous
overseas shell companies and get their investment income back as
tax-free gifts.
KPMG is a global network of accounting and
auditing firms headquartered out of the Netherlands and is one of the
top firms in Canada.
"Tax cheats can no longer hide," National Revenue Minister Diane Lebouthillier promised in 2017.
Now,
tax court documents obtained by CBC News/Radio-Canada show two members
of the Cooper family in Victoria, as well as the estate of the late
patriarch Peter Cooper, reached an out-of-court settlement on May 24
over their involvement in the scheme.
Details of the settlement
and even minutes of the meetings discussing it are under wraps. A CBC
News/Radio-Canada reporter who showed up to one such meeting this spring
was asked to leave.
Journalists discovered references to the final settlement agreement in tax court documents only by chance.
CRA cites privacy in keeping settlement details secret
The
Canada Revenue Agency says strict privacy provisions of Canadian tax
law make it difficult to disclose minutes describing individual taxpayer
information.
The Isle of Man tax dodge had been active as far
back as 1999 and, according to documents filed in court by the CRA in
2015, had "intended to deceive" federal regulators.
Still,
significant details of the scheme remain a mystery, including the role
played by the KPMG's senior executives. With no public trial, those
details may continue to remain secret.
Toby Sanger, executive
director of the advocacy group Canadians for Tax Fairness, says the CRA
should never have agreed to settle the case.
"I think it's
outrageous," he said. "We've had a lot of tough talk and promises from
this minister about how they will crack down on tax evasion by the
wealthy and corporations, but unfortunately we've seen no evidence of
this so far."
National
Revenue Minister Diane Lebouthillier called out tax cheats in 2017 and
stated her intention to clamp down on the KPMG scheme. (Adrian Wyld/The Canadian Press)
Revenue Minister Diane Lebouthlier said in an email statement to The Fifth Estate/Enquête that
while she cannot comment on specific cases, she finds the lack of
transparency about settlements brokered by her agency "problematic."
"I
have instructed the CRA to review its processes to allow for more
transparency with respect to the reasons for which a settlement is
reached," she said.
KPMG took 15% cut of taxes dodged
One member of the Cooper family, Marshall Cooper, previously told The Fifth Estate
that he was unaware of Canadian tax laws when he emigrated from South
Africa in the mid-1990s and that it was KPMG that came up with the
offshore tax plan.
Documents show KPMG planned to take a 15 per
cent cut of the taxes dodged, including $300,000 from the Cooper family.
Internal records show the scheme was marketed across the country, with
successful KPMG sales agents and accountants referred to as product
"champions."
In all, more than 20 wealthy families participated in the offshore scheme.
Two
years ago, Lebouthillier issued a news release on her intention to
clamp down on the KPMG scheme, publicly stating that those involved
could even face criminal charges over possible "tax fraud."
"The case of KPMG is before the courts right now, and we continue to pursue action against KPMG," Lebouthillier said in 2017.
"We will see this to the end as Canadians have asked us to do."
She said at the time that her government took the matter "very seriously."
"Those who choose to participate in these schemes must face the consequences of their actions," she said.
Yet more
than two years after that pledge, participants in the KPMG scheme,
namely, members of the Cooper family, were offered a secret out-of-court
settlement.
In her statement to The Fifth Estate/Enquête this
week, Lebouthillier said the decision to settle was not hers to make
and that she had instructed the CRA to review its settlements to "allow
for more transparency."
'We will continue to make systemic changes': minister
To
"ensure integrity of our tax system," Lebouthillier said, out-of-court
settlements are made by the CRA and the Department of Justice "at arm's
length" from the minister and the minister's office.
"Canadians
deserve a fair and equitable tax system, and we will continue to make
systemic changes within the CRA to make sure that this is the case," she
said in her statement.
CBC News/Radio-Canada first
revealed four years ago that KPMG, one of the largest accounting firms
in Canada, with tens of millions in federal contracts, had for years
been running a massive offshore tax dodge for wealthy clients it had
kept hidden from federal investigators.
The Trudeau government's previous tough talk on the so-called KPMG sham had come after a document leaked to The Fifth Estate/Enquête showed the CRA itself had offered a secret "no penalties" amnesty in May 2015 to many of the other KPMG clients involved in the scheme.
The CRA offered to have them simply pay the back taxes owed — but with the condition they not tell the public about the offer.
Prime Minister Justin Trudeau vowed to do a 'better job of getting tax avoiders and tax frauders' in 2017. (Jonathan Hayward/The Canadian Press)
Stung by those revelations, Prime Minister Justin Trudeau said in 2017
that the government had learned a lesson from the KPMG affair and
promised to do a "better job of getting tax avoiders and tax frauders."
Since then, the Liberal government vowed to make sure those kinds of offshore tax dodges were in the past.
In
fact, it was concerns over future KPMG court cases that prompted the
Liberal-dominated Commons finance committee to shut down its own
investigation into the embattled accounting firm back in 2016.
Documents
had already began to emerge detailing the extent to which KPMG was
helping clients not only dodge taxes but also hide money from potential
creditors, including circumventing the Canadian Divorce Act by
"protecting" assets from ex-spouses.
Lawyers for KPMG had argued that the ongoing finance committee investigation could prejudice cases before the court.
Several
KPMG executives had been named to testify in the spring of 2016, but
Liberal MPs voted to shut down the inquiry, arguing that any more
testimony and documents should be produced in court and not in
Parliament.
Now, it appears that those future court cases cited as a reason for shutting down the investigation might never materialize.
The Fifth Estate and Enquête also later
revealed that in June 2016, around the same time the Liberal MPs shut
down their investigation into the accounting giant, a former senior KPMG
executive was appointed to the Liberal Party's national board of
directors.
"There is no reason why the finance committee shouldn't restart their hearings," Canadians for Tax Fairness's Sanger said.
Settlements offer 'substantial savings to the public'
Sanger said it all seems like a Liberal "coverup" to close down the KPMG investigation.
Canadians
still do not know who were the key people at KPMG involved in running
the investigation, for example, how high up it went within the
organization, or all the names of the wealthy clients who participated.
Liberal
MPs halted a parliamentary finance committee investigation in 2016
after KPMG argued the investigation could prejudice court cases. Now, it
looks like those court cases might never happen. (CBC)
Max Weder, the lawyer for the wealthy Cooper family, said he "can't comment on the settlement."
Documents
show the family paid virtually no tax over a span of eight years — and
even obtained federal and provincial tax credits — despite receiving
nearly $6 million from an offshore company worth $26 million that KPMG
helped set up.
KPMG has always maintained the scheme was legal.
The firm's lawyers claimed any money the Coopers received were gifts and
therefore non-taxable. Nevertheless, KPMG now says it would not set up
this type of offshore structure anymore.
For its part, the CRA
said that the settlement was made in accordance with the law and is
"supported by the facts of this particular case." The agency also said
it "maximized revenue" by making a decision to settle out of court,
instead of facing an uncertain ruling in tax court.
"There is
generally substantial savings to the public and a benefit to the justice
system when cases are resolved through a settlement," a CRA
spokesperson said in a statement.
Please send confidential tips on this story to Harvey.Cashore@cbc.ca or call 416-526-4704. Follow @harveycashore on Twitter.
---------- Original message
---------- From: Diane.Lebouthillier@parl.gc.ca Date:
Thu, 30 May 2019 18:31:53 +0000 Subject: Réponse automatique : Methinks that
CBC can never deny that it loves to ignore abusive tax schemes for years
N'esy Pas Sylvie Gadoury, Diane Lebouthillier, Dominic Cardy and Chucky
Leblanc? To: motomaniac333@gmail.com
Merci
d'avoir écrit à l'honorable Diane Lebouthillier, députée
deGaspésie-Les Îles-de-la-Madeleine.
Votre courriel sera lu avec soin
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---------- Original message ---------- From:
"Office, Press" <Press@bankofengland.co.uk> Date:
Thu, 30 May 2019 18:31:41 +0000 Subject: Automatic reply: Methinks that CBC
can never deny that it loves to ignore abusive tax schemes for years N'esy
Pas Sylvie Gadoury, Diane Lebouthillier, Dominic Cardy and Chucky
Leblanc? To: David Amos <motomaniac333@gmail.com>The
Press Office mailbox is monitored between 08:30-17:30
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Emails received outside of these hours will not be
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Thanks
---------- Original message
----------
From: Premier of Ontario | Premier ministre de l’Ontario <Premier@ontario.ca>
Date:
Thu, 30 May 2019 18:31:34 +0000
Subject: Automatic reply: Methinks that CBC
can never deny that it loves to ignore abusive tax schemes for years N'esy
Pas Sylvie Gadoury, Diane Lebouthillier, Dominic Cardy and Chucky
Leblanc?
To: David Amos <motomaniac333@gmail.com>
Thank
you for your email. Your thoughts, comments and input are greatly
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You can be assured that all emails and letters are carefully
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CRA
signs secret settlement with wealthy KPMG clients involved in offshore tax
scheme Watchdog group accuses the Liberals of covering up the KPMG
affair Harvey Cashore · CBC News · Posted: May 30, 2019 12:26 PM
ET
369 Comments
Troy Bodi For the rest of us they'll hound
you for months for that $16 you owe them.
David Amos Reply to
@Troy Bodi: Methinks the CRA and Harvey Cashore should review their emails
N'esy Pas?
On
6/25/18, David Amos <david.raymond.amos333@gmail.com>
wrote: > Trust that you people will find this email posted right here ASAP
EH? > > http://davidraymondamos3.blogspot.com/2018/06/canada-revenue-agency-falling-behind-as.html > >
Monday, 25 June 2018 > > Canada Revenue Agency falling behind as
uncollected taxes owed rise to > $44 billion > https://www.cbc.ca/news/politics/tax-debt-liberal-budget-collections-1.4715967 > > >
---------- Original message ---------- > From: "MinFinance / FinanceMin
(FIN)" > <fin.minfinance-financemin.fin@canada.ca> >
Date: Wed, 30 Aug 2017 20:48:25 +0000 > Subject: RE: Your various
correspondence about abusive tax schemes - > 2017-02631 > To: David
Amos <motomaniac333@gmail.com> > >
The Department of Finance acknowledges receipt of your electronic >
correspondence. Please be assured that we appreciate receiving your >
comments. > > Le ministère des Finances accuse réception de votre
correspondance > électronique. Soyez assuré(e) que nous apprécions
recevoir vos > commentaires. > > > > ----------
Original message ---------- > From: Green Party of Canada | Parti vert du
Canada <info@greenparty.ca> >
Date: Wed, 30 Aug 2017 20:48:45 +0000 > Subject: Re: Fwd: Your various
correspondence about abusive tax > schemes - 2017-02631 > To: David
Amos <motomaniac333@gmail.com> > >
-- Please reply above this line -- > > > (Français à
suivre) > > Thank you for contacting the Green Party of Canada. Due
to the high > volume of email we receive, we cannot guarantee that all
inquiries > will be answered. With our small team, we do our best to
respond as > staffing and resources permit. > > In the
meantime, you might find the answer you're looking for in > Vision Green
[1], which lays out our plan to move Canada forward. > > >
---------- Original message ---------- > From: David Amos <motomaniac333@gmail.com> >
Date: Wed, 30 Aug 2017 16:48:20 -0400 > Subject: Fwd: Your various
correspondence about abusive tax schemes - > 2017-02631 > To: Doug.Gaetz@cra-arc.gc.ca,
"Diane.Lebouthillier" > <Diane.Lebouthillier@cra-arc.gc.ca>,
PABMINMAILG@cra-arc.gc.ca, >
"andrew.scheer" <andrew.scheer@parl.gc.ca>,
leader > <leader@greenparty.ca>,
lisa <lisa@daisygroup.ca> >
Cc: David Amos <david.raymond.amos@gmail.com>,
"Bill.Morneau" > <Bill.Morneau@canada.ca>,
"bill.pentney" <bill.pentney@justice.gc.ca>, >
"jan.jensen" <jan.jensen@justice.gc.ca> > > >
---------- Original message ---------- > From: Diane.Lebouthillier@parl.gc.ca >
Date: Fri, 26 May 2017 22:23:12 +0000 > Subject: Réponse automatique : YO
Jean-Yves Duclos Re My Old Age > pension etc Well May 24th came and went
and I just called you (819 654 > 5546) and your Deputy Ms Levonian (819
9535603) about my right to to > sue you and your minions in Federal
Court > To: motomaniac333@gmail.com > >
Merci d'avoir écrit à l'honorable Diane Lebouthillier, députée de >
Gaspésie - Îles-de-la-Madeleine. Votre courriel recevra toute >
l'attention voulue. > > Thank you for writing to the Hon. Diane
Lebouthillier, Member of > Parliament for Gaspésie - îles-de-la-Madeleine.
Please be assured that > your correspondence will receive every
consideration. > > > > ---------- Original message
---------- > From: "Min.Mail / Courrier.Min (CRA/ARC)" <PABMINMAILG@cra-arc.gc.ca> >
Date: Wed, 24 May 2017 13:10:52 +0000 > Subject: Your various
correspondence about abusive tax schemes - 2017-02631 > To: "motomaniac333@gmail.com"
<motomaniac333@gmail.com> > >
Mr. David Raymond Amos > motomaniac333@gmail.com > > >
Dear Mr. Amos: > > Thank you for your various correspondence about
abusive tax schemes, > and for your understanding regarding the delay of
this response. > > This is an opportunity for me to address your
concerns about the way > the Canada Revenue Agency (CRA) deals with
aggressive tax planning, > tax avoidance, and tax evasion by targeting
individuals and groups > that promote schemes intended to avoid payment of
tax. It is also an > opportunity for me to present the Government of
Canada’s main > strategies for ensuring fairness for all
taxpayers. > > The CRA’s mission is to preserve the integrity of
Canada’s tax system, > and it is taking concrete and effective action to
deal with abusive > tax schemes. Through federal budget funding in 2016
and 2017, the > government has committed close to $1 billion in cracking
down on tax > evasion and combatting tax avoidance at home and through the
use of > offshore transactions. This additional funding is expected to
generate > federal revenues of $2.6 billion over five years for Budget
2016, and > $2.5 billion over five years for Budget 2017. > >
More precisely, the CRA is cracking down on tax cheats by hiring more >
auditors, maintaining its underground economy specialist teams, >
increasing coverage of aggressive goods and service tax/harmonized > sales
tax planning, increasing coverage of multinational corporations > and
wealthy individuals, and taking targeted actions aimed at > promoters of
abusive tax schemes. > > On the offshore front, the CRA continues to
develop tools to improve > its focus on high‑risk taxpayers. It is also
considering changes to > its Voluntary Disclosures Program following the
first set of program > recommendations received from an independent
Offshore Compliance > Advisory Committee. In addition, the CRA is leading
international > projects to address the base erosion and profit shifting
initiative of > the G20 and the Organisation for Economic Co-operation
and > Development, and is collaborating with treaty partners to address
the > Panama Papers leaks. > > These actions are evidence of
the government’s commitment to > protecting tax fairness. The CRA has
strengthened its intelligence and > technical capacities for the early
detection of abusive tax > arrangements and deterrence of those who
participate in them. To > ensure compliance, it has increased the number
of actions aimed at > promoters who use illegal schemes. These measures
include increased > audits of such promoters, improved information
gathering, criminal > investigations where warranted, and better
communication with > taxpayers. > > To deter potential
taxpayer involvement in these schemes, the CRA is > increasing
notifications and warnings through its communications > products. It also
seeks partnerships with tax preparers, accountants, > and community groups
so that they can become informed observers who > can educate their
clients. > > The CRA will assess penalties against promoters and
other > representatives who make false statements involving illegal
tax > schemes. The promotion of tax schemes to defraud the government
can > lead to criminal investigations, fingerprinting, criminal
prosecution, > court fines, and jail time. > > Between April
1, 2011, and March 31, 2016, the CRA’s criminal > investigations resulted
in the conviction of 42 Canadian taxpayers for > tax evasion with links to
money and assets held offshore. In total, > the $34 million in evaded
taxes resulted in court fines of $12 million > and 734 months of jail
time. > > When deciding to pursue compliance actions through the
courts, the CRA > consults the Department of Justice Canada to choose an
appropriate > solution. Complex tax-related litigation is costly and time
consuming, > and the outcome may be unsuccessful. All options to recover
amounts > owed are considered. > > More specifically, in
relation to the KPMG Isle of Man tax avoidance > scheme, publicly
available court records show that it is through the > CRA’s efforts that
the scheme was discovered. The CRA identified many > of the participants
and continues to actively pursue the matter. The > CRA has also identified
at least 10 additional tax structures on the > Isle of Man, and is
auditing taxpayers in relation to these > structures. > > To
ensure tax fairness, the CRA commissioned an independent review in > March
2016 to determine if it had acted appropriately concerning KPMG > and its
clients. In her review, Ms. Kimberley Brooks, Associate > Professor and
former Dean of the Schulich School of Law at Dalhousie > University,
examined the CRA’s operational processes and decisions in > relation to
the KPMG offshore tax structure and its efforts to obtain > the names of
all taxpayers participating in the scheme. Following this > review, the
report, released on May 5, 2016, concluded that the CRA > had acted
appropriately in its management of the KPMG Isle of Man > file. The report
found that the series of compliance measures the CRA > took were in
accordance with its policies and procedures. It was > concluded that the
procedural actions taken on the KPMG file were > appropriate given the
facts of this particular case and were > consistent with the treatment of
taxpayers in similar situations. The > report concluded that actions by
CRA employees were in accordance with > the CRA’s Code of Integrity and
Professional Conduct. There was no > evidence of inappropriate interaction
between KPMG and the CRA > employees involved in the case. > >
Under the CRA’s Code of Integrity and Professional Conduct, all CRA >
employees are responsible for real, apparent, or potential conflicts > of
interests between their current duties and any subsequent > employment
outside of the CRA or the Public Service of Canada. > Consequences and
corrective measures play an important role in > protecting the CRA’s
integrity. > > The CRA takes misconduct very seriously. The
consequences of > misconduct depend on the gravity of the incident and its
repercussions > on trust both within and outside of the CRA. Misconduct
can result in > disciplinary measures up to dismissal. > > All
forms of tax evasion are illegal. The CRA manages the Informant > Leads
Program, which handles leads received from the public regarding > cases of
tax evasion across the country. This program, which > coordinates all the
leads the CRA receives from informants, determines > whether there has
been any non-compliance with tax law and ensures > that the information is
examined and conveyed, if applicable, so that > compliance measures are
taken. This program does not offer any reward > for tips
received. > > The new Offshore Tax Informant Program (OTIP) has also
been put in > place. The OTIP offers financial compensation to individuals
who > provide information related to major cases of offshore tax
evasion > that lead to the collection of tax owing. As of December 31,
2016, the > OTIP had received 963 calls and 407 written submissions from
possible > informants. Over 218 taxpayers are currently under audit based
on > information the CRA received through the OTIP. > > With a
focus on the highest-risk sectors nationally and > internationally and an
increased ability to gather information, the > CRA has the means to target
taxpayers who try to hide their income. > For example, since January 2015,
the CRA has been collecting > information on all international electronic
funds transfers (EFTs) of > $10,000 or more ending or originating in
Canada. It is also adopting a > proactive approach by focusing each year
on four jurisdictions that > raise suspicion. For the Isle of Man, the CRA
audited 3,000 EFTs > totalling $860 million over 12 months and involving
approximately 800 > taxpayers. Based on these audits, the CRA communicated
with > approximately 350 individuals and 400 corporations and performed
60 > audits. > > In January 2017, I reaffirmed Canada’s
important role as a leader for > tax authorities around the world in
detecting the structures used for > aggressive tax planning and tax
evasion. This is why Canada works > daily with the Joint International Tax
Shelter Information Centre > (JITSIC), a network of tax administrations in
over 35 countries. The > CRA participates in two expert groups within the
JITSIC and leads the > working group on intermediaries and proponents.
This ongoing > collaboration is a key component of the CRA’s work to
develop strong > relationships with the international community, which
will help it > refine the world-class tax system that benefits all
Canadians. > > The CRA is increasing its efforts and is seeing early
signs of > success. Last year, the CRA recovered just under $13 billion as
a > result of its audit activities on the domestic and offshore
fronts. > Two-thirds of these recoveries are the result of its audit
efforts > relating to large businesses and multinational
companies. > > But there is still much to do, and additional
improvements and > investments are underway. > > Tax cheats
are having a harder and harder time hiding. Taxpayers who > choose to
promote or participate in malicious and illegal tax > strategies must face
the consequences of their actions. Canadians > expect nothing less. I
invite you to read my most recent statement on > this matter at canada.ca/en/revenue-agency/news/2017/03/ >
statement_from_thehonourabledianelebouthillierministerofnational. > >
Thank you for taking the time to write. I hope the information I have >
provided is helpful. > > Sincerely, > > The Honourable
Diane Lebouthillier > Minister of National
Revenue >
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