Who Calls the Shots at the CRA?

CRA execs wined and dined at private club amid KPMG probe

How many multi-million dollar tax dodging cases has the CRA dropped, or quietly settled?

How many more have been discussed at private cocktail parties and private luncheons instead of the formal setting of a CRA office?

Is the CRA using an over-reaching definition of "confidentiality" as a way of hiding the truth about how it treats rich Canadians?

These questions - and many more - have arisen with recent revelations that senior CRA decision makers attended at least 50 posh social events paid for by the accounting and tax law industry - in some cases the same people who they were considering prosecuting on behalf of Canadians. In an interview, with CBC Investigative Reports, CRA assistant commissioner Ted Gallivan said that such "hospitality" was within the guidelines for the tax agency's employees. But when pressed for details, the CRA did not provide any accounting of how it came to that conclusion.

But here's what Gallivan did say: "We try to have a culture in CRA where executives are trying to be responsive to the citizens that we serve, which includes large accounting firms. I don't think it's a problem."

"Sounds like some of the senior officials have forgotten that large accounting firms are not citizens," says Dennis Howlett, executive director of Canadians for Tax Fairness.

 "The Canada Revenue Agency is supposed to serve all Canadians. Secret deals with the very rich who happened to have expensive tax lawyers just doesn't cut it. We need an inquiry into what's wrong at the CRA."

Some of those questions might be answered as the Parliamentary Finance Committee calls witnesses involved in another embarassing episode at the CRA - the recently revealed secret, sweetheart deal between CRA and KPMG clients who bought into the accounting firm's Isle of Man tax scheme. They were found to be evading taxes but got off with little more than slap on the wrist and a discount on their penalties. How does a decision like that get made? And who makes it?

"There are more questions than answers these days," says Howlett, who recently published report called What's Wrong at the CRA: And How to Fix It?. The document interviewed more than 25 mid-level investigators and managers about challenges at the agency.  Those problems included perception of interference on big files. 

And that's why tens of thousands of Canadians are signing on to a petition demanding the Prime Minister and the Revenue Minister set a public inquiry into whether the CRA's relationship with big accounting companies has led to unfair, unethical and weak enforcment of tax laws that enable tax dodging.  You can read more and lend your voice here.