Recent Developments
Tax Disputes
On April 7, 2011, the Globe & Mail posted a blog entry in the “Home Cents” Blog on the right way to deal with tax disputes. It listed five tips taken from the office of the Taxpayer’s Ombudsman regarding tax disputes. While the tips are helpful, they don’t address the following issues that I find most taxpayers have questions about.
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Tax Prosecutions
According to an article in the February 16, 2011 Toronto Star, CRA has released an internal report which has highlighted deficiencies in its criminal enforcement division. According to the report, problems include:
- Pursuing small files over large files to generate convictions;
- Approximately 25% of all investigations presented to Crown prosecutors are not pursued;
- A lower conviction rate than Australia or the US; and
- Approximately 50% of the fines levied from convictions are unpaid.
CRA Audit Questionnaires
According to an article published in the February 5, 2011 edition of the National Post, CRA has sent out questionnaires to high net worth Canadians regarding their interests in related entities, including trusts, partnerships, and corporations. These questionnaires appear to be the latest step by both the CRA and Department of Finance to have taxpayers voluntarily give up information about their financial affairs. In the 2010 budget, a regime was proposed whereby taxpayers would become obligated to report certain transactions to the CRA.
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