Did you know that the Canada Revenue Agency (CRA) has a program which offers a reward to individuals who help uncover offshore tax cheats?
It is not illegal for Canadians to invest money or hold accounts offshore, but these income streams must be reported to the CRA. When someone does not report their worldwide income and assets, the CRA considers this tax evasion and they treat it as a serious offence. The CRA has increasingly been focusing its attention on unreported foreign assets and now it has a system in place to find and prosecute these individuals – and they will reward those who help them in the search.
The Offshore Tax Informant Program (OTIP), which launched in January 2014, allows the CRA to reward individuals who provide specific information about Canadians who are not declaring offshore money or assets. The identity of the informant remains confidential and when the CRA collects more than $100,000 in federal taxes, the reward will be between 5% and 15% of the amount of federal tax collected! That kind of incentive could easily motivate your family, friends or business associates to turn into CRA informants.
Here are two examples the CRA provides on their website – do they match a situation you are aware of?
Situation #1: Mr. X has a business in Canada. You have information that shows that he is only declaring some of the income to the CRA and is sending the undeclared income to foreign country A. You have information on the name and address of the bank where the money is being sent.
Situation #2: Mrs. Y has an investment account and several rental properties in foreign country B. You have information that shows that she makes a lot of money from these investments but is not declaring any of the income to the CRA. You have information about the account (name and address of bank, possibly the account number) and the addresses of the properties.
Since its inception, the OTIP has received calls from over 600 potential informants and is reviewing over 120 cases of potential tax evasion.
Want to know more? Visit the CRA website here: http://www.cra-arc.gc.ca/nwsrm/txtps/2016/tt160121-eng.html?utm_source=mediaroom&utm_medium=eml.
Have your own tax problem? Tax Solutions Canada can help you deal with the CRA – call us today at 1-888-868-1400.