Insights & Articles
The Panama Papers – CRA’s Focus Is Not Just On The Ultra-Wealthy
Recent media coverage about leaked documents from a Panama law firm has caught the attention of taxpayers worldwide. Although the focus in this far reaching probe appears to be restricted to the ultra-rich, it is a sober reminder of the need for all taxpayers who may not be compliant to take the necessary steps to correct that situation.
Canada Revenue Agency (“CRA”) has publicly stated that it is actively pursuing the co-operation of its tax treaty partners and the International Consortium of Investigative Journalists to obtain all of the leaked records that pertain to Canadian residents.
However, CRA’s efforts are not restricted to the very rich. CRA has publicly stated on many occasions that it continues to pursue all options in its efforts to take enforcement actions against non-compliant taxpayers.
Taxpayers cannot safely assume that CRA’s focus on the ultra-rich will, somehow, allow them to continue to practice habitual non-compliance. Indeed, if anything, CRA is doubling down on its efforts to identify, assess and pursue non-compliant taxpayers.
Happily, CRA has provided an option known as the Voluntary Disclosure Program (the “VDP”) the sole purpose of which is to allow taxpayers to avoid prosecution and the assessment of civil penalties in circumstances where they correct their past non-compliant habits. The VDP has been around for a number of years and has been utilized by many taxpayers, including many who are “rich and famous”. However, its’ greatest benefit to all is to allow an amnesty for taxpayers who have, for a variety of reasons, been non-compliant.
It is important to note that this very valuable program is not available to any taxpayer who is actively being pursued by CRA to bring filings up-to-date or who is already experiencing or in the midst of an audit. Nevertheless, even those difficult situations can be addressed in a way that will ultimately benefit non-compliant taxpayers.
If you have any questions about this or any other tax matters, please contact Keith Trussler, Linda Smits or Ainsley Furlonger.