The Informant Leads Program coordinates information provided by the public to assist the CRA in identifying taxpayers who are violating tax laws. There is a section for domestic tax evasion and a special division that employs around 70 employees who will crack down on international tax evasion and aggressive tax avoidance.
Lead information pertains to domestic tax evasion on the part of an individual or a business, will be reviewed for non-compliance and leads are provided to the corresponding section of the CRA for appropriate action.
Some examples of domestic noncompliance are:
1. not reporting all income
2. claiming deductions for expenses that were not incurred or are not legally deductible
3. claiming false GST/HST tax credits
4. failing to remit source deductions and providing false information on marital status or children to obtain benefits and credits.
In January 2014, the CRA launched the Offshore Tax Informant Program (OTIP) that started awarding rewards in the range of 5% to 15%, of the federal tax collected, to individuals with specific and credible information about major cases of international tax non-compliance resulting in more than $100,000 of additional federal tax being assessed and collected.
When an individual or business does not conform to Canadian tax legislation, an unfair burden is placed on honest taxpayers and businesses, and the integrity of Canada’s tax base is jeopardized. The CRA takes manipulation of Canada’s tax laws very seriously.
The CRA has a legal obligation not to disclose the identity of informants, any information that might disclose an informant’s identity or even information that might reveal the existence of an informant. There are many angry key employees, business associates or even ex business or life partners who may report suspected tax evasion to National Leads Centre and their identity will not be disclosed and they will be anonymous.
The Income Tax Act and the Excise Tax Act provide the CRA with full authorization to prevent and punish tax evasion. These can include fines, penalties and in some instances even jail time. The severity of the consequences of tax evasion will correspond to the nature of the offence. Fines and/or penalties can be as high as 200% of the taxes that are attempted to avoid.
If you have any such issues or audits by CRA and needing assistance from a CPA who can represent and assist you to become Tax Compliant, contact Rajasri CPA – one of the best tax accountant in Toronto.
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