Stop the Hogs!

Shocking new evidence has come to light in the KPMG saga. It will be revealed on CBC’s The National on March 9 or 10.
Dennis Howlett of Canadians for Tax Fairness was interviewed for this exposé.

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2015 in Review: Changing How We Talk About Tax

[ http://www.taxfairness.ca/sites/taxfair ... w_2015.pdf ]

EXCERPT:

Tackling Tax Havens

If there’s one thing Canada could do in 2016 to improve our tax system it would be to tackle tax havens. Canadian dollars offshore are at an all-time high of $199 Billion and that’s just the reported money. Conservative government cuts and re-organization at Canada’s Revenue Agency was a free pass for multinationals and wealthy individuals who are happy to live and work here but feel entitled to pay less tax than the rest of us. The Liberal government promised changes. But tweaks just won’t cut it.
Tax havens are a priority issue at Canadians for Tax Fairness (C4TF). We’ve worked with documentary producers and journalists to expose the the growing problem of tax havens.

In the late summer of 2015, we reached millions of Canadians through a CBC investigative report on a tax scheme created by accounting giant KPMG. It is just the tip of the iceberg.

Shocking new evidence has come to light in the KPMG saga. It will be revealed on CBC’s The National on March 9 or 10.
Dennis Howlett of Canadians for Tax Fairness was interviewed for this exposé.

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WATCH: Isle of Sham:Tales from a Canadian Tax Haven - 2015
[ http://www.taxfairness.ca/en/news/isle- ... -tax-haven ]


FURTHER READING:

Exclusive - KPMG tax 'sham' used by at least 25 wealthy Canadians, document says - Sept. 30, 2015
[ http://www.cbc.ca/news/business/kpmg-ta ... -1.3249468 ]
By Harvey Cashore, Dave Seglins, Frederic Zalac, CBC News

Case against KPMG to proceed as out-of-court talks break down

A few months ago we were part of a CBC National investigation into KPMG. It reported that the multinational accounting firm allegedly profits from a scheme that encourages clients to funnel money to the Isle of Man with the express purpose of avoiding Canadian taxes. There was evidence that KPMG was lobbying the Harper goverment furiously, trying to negotiate an out of court settlement. They even sponsored a number of speaking events in Vancouver for Prime Minister Harper, Finance Minister Oliver and Revenue Minister Findlay.

Shocking new evidence has come to light in this saga. It will be revealed on CBC’s The National on March 9 or 10. Dennis Howlett of Canadians for Tax Fairness was interviewed for this exposé.


Canadians for Tax Fairness/Canadiens pour une fiscalité équitable
192 Main St., PO Box 12015
Ottawa, ON K1S 3M1
Canada
[ http://www.taxfairness.ca/en ]

KURTENBACH: Distribution of the world's Wealth

by Leo Kurtenbach March 7, 2016

To the Editor,

At the recent World Economic Forum held in Davos, Switzerland, Oxfam's report on the "economy for the 1%" noted that 62 of the world's richest people hold as much wealth as half the people on the Planet! It has also been noted that the inequality between the wealthiest and the poorest is still growing in favour of the world's top 1%.

In the industrialized countries of the world, the US has the greatest disparity between the rich and the poor. It also has sustained the greatest losses from tax evasion - in some cases with the help of their banks - in order to move profits into foreign tax havens.

In 2012, James Henry, senior adviser to the Tax Justice System, stated that the world's super rich have taken advantage of lax tax rules to siphon off at least US $21 trillion, (possibly as much as $32 trillion) from their home countries and hidden it abroad. Data from the US Internal Revenue Service suggests that, globally, US non-financial companies hold about US $5 trillion in cash.

Canadian companies are reported to be holding $685 billion, equal to one-third of the Canadian economy.

Tax evasion is a crime. It is even a greater crime when one thinks about what that wealth could have done to create programs enabling the world's poor and oppressed families with a better standard of living.

That will change only if we, the millions of voters, particularly in the industrialized countries, elect politicians who are prepared to regulate the greed and abuses of capitalism.

Leo Kurtenbach,
Box 242, 331 Cornish Road, Saskatoon
Phone: 306 652 5129

CBC Investigates - Canada Revenue offered amnesty to wealthy KPMG clients in offshore tax 'sham'

[ http://www.cbc.ca/news/business/canada- ... -1.3479594 ]

Federal authorities demanded secrecy in no-penalty, no-prosecution deal to high net worth Canadians

By Harvey Cashore, Dave Seglins, Frederic Zalac, Kimberly Ivany, CBC News Posted: Mar 08, 2016 5:00 AM ET| Last Updated: Mar 08, 2016 6:34 AM ET


WATCH: KPMG tax haven investigation update - 2.06 min.
[ http://www.cbc.ca/news/business/canada- ... -1.3479594 ]


For confidential tips on this story please email investigations@cbc.ca or contact Harvey Cashore at 416-526-4704, or
visit CBC Secure Drop [ https://securedrop.cbc.ca/ ] to send documents to the attention of Harvey Cashore.


The Canada Revenue Agency offered amnesty to multi-millionaire clients caught using what's been called an offshore tax "sham" on the Isle of Man — a reprieve that was supposed to remain secret and out of the public eye until it was uncovered by a CBC News/Radio-Canada investigation.

The amnesty allows for "high net worth" clients of the accounting giant KPMG to be free from any future civil or criminal prosecution — as well as any penalties or fines — for their involvement in the controversial scheme.

The clients simply had to agree to pay their back taxes and modest interest on these offshore investments, which they had failed to report on their income tax returns.

Documents show that the scheme had attracted at least $130 million.

CBC/Radio-Canada obtained a copy of the confidential nine-page offer, signed on May 1, 2015 by CRA's manager of offshore compliance, Stephanie Henderson.

It promised KPMG clients that the CRA would not impose any penalties for taxes dodged in a scheme that lasted more than a decade.

The offer was made despite CRA uncovering the KPMG scheme, which had at least 26 wealthy clients each investing a minimum of $5 million using shell companies on the Isle of Man.

Before offering the deal, the tax agency had already assessed huge penalties against a handful of the earliest clients, alleging the scheme was "grossly negligent" and had "intended to deceive" the minister of revenue.

CRA would not discuss any details of the leaked document with CBC News, let alone say how many of the high net worth KPMG clients decided to accept the offer.

But a letter filed in court in September 2015 by a KPMG lawyer stated that 15 clients had "self-identified" to the federal tax authorities. Why they might have come forward remained a mystery until CBC News obtained a copy of the secret agreement.

A spokesman for Canada Revenue told CBC News that the CRA frequently resolves tax disputes through settlements.

"CRA practice also recognizes that the earliest possible resolution of disputes is in the public interest, as lengthy litigation is costly to all parties and the outcome of complex, tax-related litigation processes may be difficult to predict," media relations officer Philippe Brideau said in a statement.

Secret offer 'outrageous'

CBC showed the secret CRA amnesty offer to a number of tax lawyers.

Toronto tax lawyer Duane Milot, who represents middle-income Canadians in disputes with the CRA, says his clients are routinely dragged through the courts for years by Canada Revenue.

"It's outrageous," he told CBC News after reading the leaked document. "The CRA appears to be saying to Canadians, 'If you're rich and wealthy, you get a second chance, but if you're not, you're stuck.'"

Jonathan Garbutt, a veteran Bay Street tax lawyer says the CRA may be looking to avoid a long, costly court battle with KPMG's multi-millionaire investors as it lacks resources for these kinds of fights.

"These are much bigger names. These people have money. They can fight, they can afford to hire the best legal defence money can buy," Garbutt said.

"There's a lot more money at stake in these bigger cases, and it's going to cost them more to be able to fight them. So CRA will gladly say thank you very much for the money, and move on to the lower-hanging fruit," Garbutt said.

Confidentiality clause

Whatever the reason behind the offer, it's clear the CRA didn't want anyone else to find out about the amnesty deal.

The leaked document includes the clause CONFIDENTIALITY in capital letters in paragraph 18.

"The taxpayer agrees to ensure the confidentiality of the offer and will not inform any person of the conditions of the offer," the letter states.

"This doesn't pass the smell test," Milot said. "This is exactly the type of government behaviour that erodes the public's confidence in the system, these type of secret deals. Everybody should be treated equally."

The document is silent on whether KPMG itself will avoid civil or criminal penalties for setting up and selling the Isle of Man arrangement to at least 26 clients.

But experts consulted by CBC News raised concerns that the large accounting firm, with close ties to the federal government, could also be off the hook.

In an on camera interview last Friday, Ted Gallivan, the CRA's assistant commissioner of compliance, said it would be inappropriate for him to say whether KPMG also was offered amnesty over the offshore scheme.

"The CRA is still actively pursuing this matter, and so I really can't comment about what decisions we may or may not have made," he said.

- - - - SNIP - - - - -

The secret agreement, leaked to CBC producer Harvey Cashore in a brown envelope, reveals that the amnesty offer was made to these high net worth Canadians even before the CRA knew who they actually were.

The May 1, 2015 offer letter was sent to KPMG and was then passed on to its clients, 15 of whom appeared to accept the offer.

There are believed to be six more high net worth clients whose identities continued to remain a mystery.

The agency says it is now proceeding with the court case to obtain the remaining names.

"I really don't want to say anything that could jeopardize or hamper our ability to pursue it. I'll just emphasize that our work is far from done and we intend to pursue this as far as possible," the CRA Gallivan said.

For confidential tips on this story please email investigations@cbc.ca or contact Harvey Cashore at 416-526-4704, or
visit CBC Secure Drop [ https://securedrop.cbc.ca/ ] to send documents to the attention of Harvey Cashore.


Related Stories

■KPMG offshore 'sham' deceived tax authorities, CRA alleges - Sept. 9, 2015
[ http://www.cbc.ca/news/business/kpmg-of ... -1.3209838 ]

■KPMG tax 'sham' used by at least 25 wealthy Canadians, document says - Sept. 30, 2015
[ http://www.cbc.ca/news/business/kpmg-ta ... -1.3249468 ]

■Harper government partnered with industry group battling CRA over KPMG case - Oct. 6, 2015
[ http://www.cbc.ca/news/business/harper- ... -1.3257994 ]

■CRA 'special adviser' joined industry lobby group amid probe of KPMG - Oct. 7, 2015
[ http://www.cbc.ca/news/business/cra-emp ... -1.3258854 ]

■KPMG tax 'sham' could lead to criminal investigation, experts say - Sept. 10, 2015
[ http://www.cbc.ca/news/business/kpmg-ta ... -1.3223371 ]

■Read for yourself: CRA's May 2015 offer to KPMG clients - May 1, 2015
[ https://www.documentcloud.org/documents ... ients.html

■For confidential tips on this story please email investigations@cbc.ca or contact Harvey Cashore at 416-526-4704
CRA's Ted Gallivan on 'confidential' deal 1:32