The Canada Revenue Agency has no systems to go after large groups of rich tax cheats according to the Canadian Auditor General's fall report.
The report, which looked at data leaked to the CRA in 2007 from offshore accounts in Liechtenstein, found 182 people had been stashing money.
After grouping folks into 81'families' the agency found that:
35 were not audited because the Agency determined that the taxpayers were not residents of Canada or were deceased, or it was unable to identify or locate the taxpayers. For the taxpayers the Agency was unable to locate, our audit showed that on the basis of the information it had, there was little more the Agency could do to confirm the identity and location of those taxpayers. Of the 46 audits completed, 23 led to reassessments totalling $24.651 million in federal tax, interest, and penalties.
While the auditors report found that the CRA "managed the Liechtenstein list as intended, with the information and tools it had", it also found that "they were the first offshore audits that the Agency had undertaken on the basis of such an extensive informant lead"
In other words, the CRA has had no system to go after tax cheats when they receive a leak of information about them from an outside source.
Other troubling issues were raised by the auditors report which, for the most part, has been ignored by the media. Most importantly, in very, very, very stark contrast to protesters at the G20, though rich Canadians were clearly caught hiding money from the CRA, there were no prosecutions.
Closer examination of the report shows that far from prosecuting, the CRA was treating tax cheats with kid gloves. In a number of the cases, the tax cheats lawyers "requested an offer or agreement that would guarantee" no prosecution. The CRA signed these agreements in a number of cases.
Even for cases that had no agreement not to prosecute, the CRA only recommended two for prosecution and neither of those were followed up.
The workings of the CRA in going after hidden money directly contradicts the Conservatives statements about their desire to go after tax cheats. The government has publicly stated that they intend to raise more revenue from tax cheats and tackling tax havens, which has been estimated to hold almost $32 Trillion dollars in hidden wealth.
Previous stories by the Toronto Media Co-op have shown that not only has the Conservative government been avoiding cracking down on tax havens and tax cheats, but they have been actively interfering with attempts to reform the system.
Recent stories by the CBC may reveal why.
Explosive revelations by the CBC have shown a number of prominent Conservative MP's, staffers and appointees have been embroiled in tax hiding scandals.
In June, former Prime Minister's Office advisor Dimiri Soudas was found to have avoided paying taxes from May 2008 to April 2011. "How is this possible when PMO staff have taxes deducted at source?" asked Liberal MP Hedy Fry. Soudas said that the tax was not paid as a result of 'clerical errors'. He was recently elected as executive director of the Conservative party.
In 2010, Andrew Saxton, a Conservative MP for North Vancouver and parliamentary secretary to the president of the treasury board, was found to have "approved a transfer of funds on behalf of a Canadian taxpayer to an account in Switzerland that the taxpayer set up to help evade taxes" during his previous career as a banker.
Most recently, the Chair of the Canadian Mint, Jim Love helped a former Prime Ministers family hide money in offshore accounts to 'avoid' taxes. He also signed a legal agreement to keep the CRA from knowing about the money. Love is close family friend to Finance Minister Jim Flaherty.
This story is part of TMC's coverage of offshore finances in Toronto.
