Why is the CBC refusing to hand over info to CRA about potential CDN tax cheats?
- Thread starter Locutus
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I believe that the Requirement to Provide Documents would be subject to the CRA auditing an individual or company (the CBC in this case).
I would imagine that if teh CRA wanted those docs from the CBC, they would need to go outside their jurisdiction and get a Court Order compelling the CBC to deliver
That makes sense. Short of a court order the CBC should not be providing anything to the CRA.
There would be a good chance that the CBC would be a target for lawsuits from the individuals/companies in the document... I don't know what the claim would be (libel or some kind of breech of confidentiality?) but chances are they would be receiving a lot of letters from law firms.
That said, makes you wonder why the CBC would touch this unless they could prove the implied allegations
That said, makes you wonder why the CBC would touch this unless they could prove the implied allegations
I'm not sure protecting a source applies here. I mean they can still hand over the papers without saying who the source was. I do support a news agency in its protection of sources, and everyone here should too.
KPMG knows who is on the list.
KPMG has wink, winked with the CRA to get laws changed.
In the original post the Conservative Ziad Aboultaif calls for the CBC to release the names because he's a Conservative and because the CBC is easy meat to pick on.
But he is he going after the wrong entity and the CBC angle is just a distraction......
The CRA is rotten to the core. Time to clean house.
This disgraceful action on the part of the CRA is just the latest in a long line of scandals that prove it has forgotten that its role is to protect the tax system — not destroy it through corruption, lax controls and a tendency to protect the wealthy from the consequences of their greed.
Remember that corruption scandal that erupted in the Montreal’s CRA office a few years back? A police probe of the Montreal mafia turned up a scheme which allegedly saw government-employed auditors conspiring with crooked entrepreneurs to help them evade millions of dollars worth of taxes. There were reportedly cash bribes and outings to Montreal Canadiens hockey games, where CRA auditors were wined and dined by their unsavory business partners.
Which explains why the Canada Revenue Agency was in such a hurry to offer a secret amnesty deal last year to the wealthy clients of KPMG who had been caught evading millions of dollars in taxes. The CRA reported participants in the scheme paid a 15 per cent cut on taxes saved to KPMG, sent their fortunes to the Isle of Man — a well-known tax haven — and got it paid back to them as tax-free gifts.
Meanwhile, the rest of us are expected to candidly file our taxes and be grateful for a few bucks saved on a TFSA or a tax credit for our children’s ballet lessons.
According to the CBC, which conducted a thorough investigation of the scam, beneficiaries of the KPMG scheme won’t face penalties, won’t be threatened with criminal prosecution or — God forbid — jail. As for the professional accountants and lawyers who concoct such schemes and profit handsomely from them, they can go back to dreaming up new ways of ripping off the Canadian taxpayer and scoring fat government contracts — while remaining generous contributors to our governing parties. That’s the Canadian way.
The CRA has also shown itself to be incapable of protecting the privacy of Canadians against unreasonable intrusion. Last month, the Security Intelligence Review Committee disclosed that the Canadian Security Intelligence Service had managed to get its hands on private taxpayer information from the CRA without a warrant and in clear breach of the law. The CRA, clueless as ever, said it didn’t know what information had been shared but assured the public that the rogue employee who had handed over the data was no longer there.
This week, we learned that the CRA turned over 155,000 banking records to the U.S. Internal Revenue Service in the middle of last year’s federal election — without waiting for the outcome of a court challenge to this unprecedented sharing of taxpayer data, without hearing an opinion from the Privacy Commissioner. And the individuals involved have never been informed by the CRA of its action.
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The Canada Revenue Agency is rotten to the core. Time to clean house. – iPolitics
KPMG official tells MPs firm no longer in tax-shelter business
The accounting firm KPMG got out of the tax-shelter business years ago after a change in taxation laws and in Canadian expectations, a senior executive told a House of Commons committee Tuesday.
Gregory Wiebe, KPMG's "global head of tax," was responding to questions about the firm's controversial Isle of Man offshore tax scheme created in 1999, which the Canada Revenue Agency has alleged "intended to deceive" federal tax authorities.
"Like every business, we've changed dramatically since 1999," he said. "We have no tax shelters that we sell. ... The tax shelter regime in Canada is just something we're not part of."
KPMG operates around the world through a network of independent national affiliates, including one in Canada that employs around 6,000 people in more than 30 offices across the country. All are members of KPMG International Co-operative, registered in Switzerland, and provide tax, auditing and consulting services to corporations and governments.
Dennis Howlett, executive director of Canadians for Tax Fairness, says he would like to see KPMG executives who were directly involved in the Isle of Man scheme address the committee and is concerned about a possible "whitewash" if that doesn't happen.
The decision to launch hearings came in March, after CBC News revealed the CRA offered a secret amnesty to wealthy KPMG clients involved in the firm's tax scheme based out of the Isle of Man, a self-governing so-called possession of the British Crown located in the Irish Sea between Ireland and the U.K.
The offer, leaked to CBC News in a brown envelope, allowed the wealthy clients to pay taxes on the income they previously had not declared, plus some modest interest, and promised no civil penalties and no criminal investigations. The tax agency's offer came with a strict condition that clients never talk about it in public.
The committee has yet to vote on an NDP motion brought forth at the meeting asking Wiebe to identify any clients who may have broken the law.
Later in question period, the NDP's Tom Mulcair called on the Liberal government to launch an investigation, saying "Canadians don't accept there is one law for the rich and well connected and one law for everybody else."
But Prime Minister Justin Trudeau rebuffed the demand. "Once again, we see NDP is always eager to play procedure games rather than dig into real issues. We're working with CRA, we're ensuring all Canadians and companies pay their fair share of taxes."
KPMG official tells MPs firm no longer in tax-shelter business - Politics - CBC News
The accounting firm KPMG got out of the tax-shelter business years ago after a change in taxation laws and in Canadian expectations, a senior executive told a House of Commons committee Tuesday.
Gregory Wiebe, KPMG's "global head of tax," was responding to questions about the firm's controversial Isle of Man offshore tax scheme created in 1999, which the Canada Revenue Agency has alleged "intended to deceive" federal tax authorities.
"Like every business, we've changed dramatically since 1999," he said. "We have no tax shelters that we sell. ... The tax shelter regime in Canada is just something we're not part of."
KPMG operates around the world through a network of independent national affiliates, including one in Canada that employs around 6,000 people in more than 30 offices across the country. All are members of KPMG International Co-operative, registered in Switzerland, and provide tax, auditing and consulting services to corporations and governments.
Dennis Howlett, executive director of Canadians for Tax Fairness, says he would like to see KPMG executives who were directly involved in the Isle of Man scheme address the committee and is concerned about a possible "whitewash" if that doesn't happen.
The decision to launch hearings came in March, after CBC News revealed the CRA offered a secret amnesty to wealthy KPMG clients involved in the firm's tax scheme based out of the Isle of Man, a self-governing so-called possession of the British Crown located in the Irish Sea between Ireland and the U.K.
The offer, leaked to CBC News in a brown envelope, allowed the wealthy clients to pay taxes on the income they previously had not declared, plus some modest interest, and promised no civil penalties and no criminal investigations. The tax agency's offer came with a strict condition that clients never talk about it in public.
The committee has yet to vote on an NDP motion brought forth at the meeting asking Wiebe to identify any clients who may have broken the law.
Later in question period, the NDP's Tom Mulcair called on the Liberal government to launch an investigation, saying "Canadians don't accept there is one law for the rich and well connected and one law for everybody else."
But Prime Minister Justin Trudeau rebuffed the demand. "Once again, we see NDP is always eager to play procedure games rather than dig into real issues. We're working with CRA, we're ensuring all Canadians and companies pay their fair share of taxes."
KPMG official tells MPs firm no longer in tax-shelter business - Politics - CBC News
Confidential details of more than 200,000 offshore accounts in the Panama Papers — including the names of at least 625 Canadians — have been released, in the hope that public scrutiny of the material will generate hundreds of tips about possible corruption and tax dodging.
The new information is in this searchable database,
CBC News and the Toronto Star, who have exclusive access in Canada to the leaked data, will be publishing a series of stories on Canadians named in it. Those include an examination of a lawyer who was known as a "go to" for wealthy people hoping to move money offshore, and of a convicted fraudster who set up 60 corporations in various tax havens.
It is not illegal for Canadians to have an offshore account, but any income must be reported for tax purposes, as well as any offshore assets totalling more than $100,000. Offshore jurisdictions like the Cayman Islands, British Virgin Islands, Isle of Man or Liechtenstein often have strict confidentiality rules for bank accounts and shell companies that make it easier to hide assets from tax authorities.
The ICIJ's Ryle said his organization hopes members of the public will scour the new Panama Papers data and flag any potential malfeasance they spot.
The new information is in this searchable database,
CBC News and the Toronto Star, who have exclusive access in Canada to the leaked data, will be publishing a series of stories on Canadians named in it. Those include an examination of a lawyer who was known as a "go to" for wealthy people hoping to move money offshore, and of a convicted fraudster who set up 60 corporations in various tax havens.
It is not illegal for Canadians to have an offshore account, but any income must be reported for tax purposes, as well as any offshore assets totalling more than $100,000. Offshore jurisdictions like the Cayman Islands, British Virgin Islands, Isle of Man or Liechtenstein often have strict confidentiality rules for bank accounts and shell companies that make it easier to hide assets from tax authorities.
The ICIJ's Ryle said his organization hopes members of the public will scour the new Panama Papers data and flag any potential malfeasance they spot.
There's nothing like using "emotional" terms like "scheme, dodgers, cheats" etc to paint a picture that may not be true at all. First off, "lower" income earners don't pay taxes or If they do very little. Secondly, most taxes in Canada are paid by the upper 1 - 2% of the Canadian populous (i.e. the "rich guys") with the remainder paid by the middle class.
Most people try to "defer" paying taxes as much as possible and there's nothing illegal about that. I do it, if you have RRSP's you do it as well. Eventually, you'll end up paying tax on it but with the hope that you'll be paying at a lower rate because your income will be lower too.
As for tax "dodgers" I believe they're not as many as being insinuated but the ones that do so should be tried, tarred and feathered.
JMHO.
Most people try to "defer" paying taxes as much as possible and there's nothing illegal about that. I do it, if you have RRSP's you do it as well. Eventually, you'll end up paying tax on it but with the hope that you'll be paying at a lower rate because your income will be lower too.
As for tax "dodgers" I believe they're not as many as being insinuated but the ones that do so should be tried, tarred and feathered.
JMHO.
No.
The CRA allows that action to happen ........
Tax experts summoned to Ottawa yesterday to testify about a KPMG offshore tax dodge at the Commons finance committee were left fuming after a last-minute gag order prevented them from saying anything about the accounting firm's Isle of Man scheme.
"Why am I here?" André Lareau, a Laval University tax professor flown in from Quebec City, told CBC News. "They asked me to come here to speak about KPMG and I'm prevented from speaking about KPMG."
"This is completely unfair," echoed Dennis Howlett, of Canadians for Tax Fairness, who was equally surprised about the sudden ban.
The committee also refused to accept Howlett's written report on the alleged KPMG offshore "sham."
The controversial tax avoidance scheme involved the creation of shell companies based on the Isle of Man. KPMG ran the operation for high net worth clients for more than a decade before it was eventually detected by auditors for the Canada Revenue Agency in 2012.
The gag order led to some awkward moments, as witnesses scrambled to avoid possible contempt rulings.
"The particular case that we're not supposed to refer to is only the tip of the iceberg," Howlett testified.
Queen's University tax professor Art Cockfield made the point that, as a deterrent, the U.S. had implemented harsh penalties and criminal convictions against KPMG for its tax avoidance schemes. He quickly pointed out he was "not commenting" on the KPMG Canada case.
When it appeared that Lareau was about to give opinion about KPMG "strategy," the tax expert was cut off by committee chair Wayne Easter.
"If you want to talk in generalities of tax avoidance, that's fine. But I don't want to go down a path that's going to cause trouble," the Liberal MP cautioned.
"Mr. Chairman, I was invited to speak about KPMG," Lareau rebutted, before continuing without mentioning the accounting giant.
The about-face by the finance committee comes after KPMG itself warned the MPs against allowing further testimony. KPMG lawyer Mahmud Jamal wrote to the committee on June 4, only days before the hearing, imploring that the committee not address the KPMG Isle of Man scheme, as it is currently before the courts.
"The committee's work should not address the very matters that are currently pending before two courts," Jamal's statement reads.
"To debate the [offshore] tax plan in a partisan political environment when this very matter is before the courts would, with great respect, be fundamentally unfair and improper."
"It's unusual because one of the parties to the court case came before the committee, answered questions, provided documentation, and then raised this issue so that anyone subsequent could not do the same," says Chamberlain.
Neither the statements nor brief prepared by Chamberlain were accepted Tuesday by the committee.
"The committee only gets to hear the KPMG side of the story and has no opportunity to hear from legal experts and others who have views that would challenge their interpretation of the law," Howlett added.
The NDP, which holds one seat on the finance committee, says it is concerned that by the time the court cases are over — the earliest began in 2013 — too much time may have passed for Parliament to probe the issue.
"Do we have to just shut up and basically stand aside while waiting for the courts to decide on those issues?" vice-chair Guy Caron told CBC News. "We risk losing sight of the issue and unfortunately never to get back to it, which is something I would like to avoid."
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Experts testifying in Ottawa about KPMG warned not to mention offshore tax scheme - Business - CBC News
Ouch.
Your retort sounds like the uninformed standard Conservative one. And NO, RRSP's are not the same thing. There is a big difference between avoidance and deferment....
The Isle of Man tax avoidance scheme is nothing new. Linda McQuaig reminds her readers (link is external) that Brian Mulroney cut the same kind of deal with the CRA:
The riveting image of the former prime minister accepting wads of cash from a notorious lobbyist — admitted by Mulroney under cross-examination at a 2009 public inquiry — was so eye-popping that it completely eclipsed another fascinating aspect of the story: the sweetheart tax deal Mulroney got from the Canada Revenue Agency after he failed to report the cash.
Although Mulroney had hidden the cash payments (totalling $225,000) from tax authorities for six years, his lawyers managed to cut a deal that allowed the former PM to avoid any fines or penalties, and only required him to pay half the taxes he would have paid if he’d obeyed the tax laws — laws that chumps like you and me are legally obliged to obey.
And the treatment of Mulroney wasn't exceptional -- for the wealthy:
The KPMG scam is undoubtedly just the tip of a gigantic tax-avoidance iceberg. Canadians for Tax Fairness, a labour-sponsored group, calculates Canada loses more than $7 billion (link is external) a year in revenue due to wealthy individuals and corporations using tax havens.
Under the Harper government, this sort of tax avoidance by the rich tended to be viewed as a benign activity, a victimless crime, part of the notion that taxes are inherently bad. But, of course, that’s only true if you’re willing to go without schools, hospitals, roads, bridges, pensions and other public goods that require tax revenue.
The flourishing, highly lucrative tax avoidance business can also be blamed for the complexity of the tax system, so frequently bemoaned by right-wingers.
The folks Leona Helmsley called "the little people" have their taxes withdrawn with every pay cheque. It's their paper trail and they can't hide it. The wealthy have become very good at hide and seek. It's time the Trudeau government declared that different rules for different folks is no longer government policy. And the new policy has to have teeth.
Deferring is not illegal as you will eventually have to pay taxes on a recorded amount, avoiding through legal means may be immoral but not illegal as we have seen through the Panama Papers which in essence leads us to evading which becomes legal but only if you have enough money to take advantage of such schemes.......
Lisa Phillips writes (link is external) about the desperate need for Canadian courts to ensure a fair tax system, rather than allowing technicalities and loopholes to win out over the principle that everybody should pay a fair share:
With some exceptions, Canadian judges have defaulted to a literal reading of tax law that is based on 19th-century English precedents. This approach stresses, above all, the right of property owners to rearrange their affairs to minimize tax.
In the United States, the courts took a different tack, ignoring transactions that were designed purely to escape tax. By the 1970s, the English judiciary was also moving in this direction. In a series of landmark cases, they recognized that taxpayer liberty must be balanced with the need to distribute the cost of government services fairly, according to Parliament’s intentions. Canadian courts have been slower to leave 19th-century England behind.
Frustrated by our judiciary’s passive approach, the government added a general anti-avoidance rule to the Income Tax Act in 1988. The rule gives judges explicit authority to override tax planning that abuses the law by defeating its purpose. Yet, in many cases, our courts are hesitant to follow through....Such rulings bear a share of the responsibility for eroding the integrity and fairness of Canada’s tax system.
They signal that tax planners can be aggressive in pushing the limits of the law, creating a thriving market for new avoidance ideas.
As soon as one implausible story succeeds, the race is on to manufacture more.
Authorities struggle to keep up and understandably wonder whether it is wise to invest their limited resources to challenge these ventures in court.
Rewriting the tax law to close technical loopholes must be done carefully. By the time it is done, tax planners have already moved on to the next gambit. It is easy to point the finger at lawyers and accountants as enablers. It is true that these professionals make a handsome living from helping their clients to reduce tax bills. Some will admit privately their discomfort with deals that seem to make a mockery of the progressive income tax. But, in most cases, they are only doing what the courts have licensed. Until the judiciary also sends a stronger message, we can expect a culture of aggressive planning to persist
If we didn't have such spendthrift governments we would not have the need to hide income from the taxman.
How much tax revenue are we loosing on tips not being reported by the thousands of waitresses, cleaners, fishing guides etc? Meanwhile the CBC gets bent out of shape on a couple of dozen people that are not hiding income but simply taking advantage of the law as written.
How much tax revenue are we loosing on tips not being reported by the thousands of waitresses, cleaners, fishing guides etc? Meanwhile the CBC gets bent out of shape on a couple of dozen people that are not hiding income but simply taking advantage of the law as written.
Um, I dunno, in my business, we deal a lot with CRA and trust me, they're not necessarily nice people. If they demand something, you pretty much have to provide it. Having said that, maybe they just intimidate the little guy since the big guys have lawyers and accountants etc to hide behind. Huh - bet that's it.
Yes they can be nasty to the little guy but as we have seen in the story re; the Panama Papers there was a lot of schmoozing between the likes of KPMG et all and the CRA to not investigate these cases nor change the legalities of doing such things.
You're worried about tips? I bet the tips in total equal what one Company avoided paying in a year. What about self employed being able to write off their gas, insurance, food/entertainment etcetera.
And the CBC is not bent out of shape on this as the title of the thread suggested that the CBC refused to handover the info that was available through multiple sources at the time.
And no, a spendthrift government does not cause the big guys to enroll in such schemes, They would do it if the tax rate was 1%....