CRA Dealmakers Ignored Advice from Staff

Was it political interference?

That's the question that won't go away after a CBC News investigation revealed that several CRA staff were angry and frustrated at their bosses' decision to offer amnesty to wealthy KPMG clients caught using an offshore tax-avoidance scheme. But bosses didn't listen when staff argued that CRA should have pursued a criminal investigation or at least tried to impose large penalties on these tax dodgers.

The story builds on the findings of Canadians for Tax Fairness' report, "What is Wrong at the CRA? And How to Fix It".  Anonymous interviews with 27 CRA investigators and middle managers revealed a culture of top-down edicts, cutbacks and confusion.  Twelve weeks after we sent her the report CRA Minister Diane LeBouthillier still refuses to meet with C4TF to explore the issues. 

Regular Canadian taxpayers are furious and the Tax Fairness Facebook page and Twitter feed has been sparking for the past 48 hours.

  •  "A public investigation is in order that goes right up to the former PM and his office," wrote Chris Rose. 
  • "How dare the government settle with somebody it has a claim against in order to avoid the uncertainty of losing or the cost of litigating," wrote Todd Brayer 
  • "All accounting firms should be excluded (from government contracts) until they clean up their act", tweeted Wally Zee. 
  • "Deport them to the country they stash their cash in," tweeted Ronda Zwierz with her tongue in cheek. 

In an email to Tax Fairness, Senator Percy Downe who has spent years tracking this issue says: " The story reinforces what we've known for years about how the CRA deals with large scale overseas tax evasion. The October 2013 report of the Auditor General on the "original" Liechtenstein tax evasion scandal (there are now so many, we have to differentiate among them) discussed "waived referrals" which amounted to an admission from CRA that they were simply incapable of following up on information proved to them. 

Canadian taxpayers expect their government to operate a tax system that is fair, transparent and modern.  We deserve no less.