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More on Offshore Accounts

Posted By: David M. Piccolo on October 9, 2010 at 1:55:35 in All , News

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More on Offshore Accounts

According to an editorial by Diane Francis in the October 7, 2010 edition of the National Post, the Canada Revenue Agency has failed to adequately pursue tax evasion charges for individuals who had bank accounts in Liechtenstein. According to the editorial, an investigation by Senator Percy Downe revealed that of the 106 Canadian who had accounts in 2006, none had been charged with tax evasion. Further, 20 Canadians utilized the voluntary disclosure program (VDP) to resolve their matter, despite remarks by the then Minister of National Revenue that the VDP would not be available to these individuals.

This issue again comes down to a cost-benefit analysis of how to enforce the Income Tax Act. On a per case basis, it is almost certain that a tax evasion file is much more costly than a voluntary disclosure file since the costs involved in any tax evasion case include the CRA officers who gather the required information and the lawyers at the Public Prosecutions Service of Canada who prosecute the matter on behalf of CRA. These costs must be weighed with the possible benefits of increased revenue in the form of fines and increased compliance.

Interestingly, the current Minister of National Revenue Keith Ashfield posted a response to Ms. Francis’ editorial. You can read the response here. A subscription with the National Post is required to read the original editorial.

Originally posted on www.piccololaw.ca, used with permission.

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