Response to Tax Dodge - shows Trudeau's true colours??

[Oscar]

Response to Tax Dodging by Rich Will Show Trudeau's True Colours

[ http://www.thetyee.ca/Opinion/2016/05/1 ... x-Dodging/ ]

CRA ties to industry, special deals demand Liberal action.

By Murray Dobbin, 13 May 2016, TheTyee.ca

"Smell Test" - Cartoon by Greg Perry

Note to Prime Minister Justin Trudeau:

We will not be distracted forever by your explanation of quantum computers and yoga poses. Or even by the admittedly impressive list of low-hanging fruit (most recently, the return of the long-form census) you have picked thanks to Stephen Harper.

It's a comforting distraction to think that we might actually have a government that isn't totally in the thrall of Bay Street billionaires and transnational corporations. But everything we know about your party suggests that nothing fundamental has changed. The litmus test will be how you deal with KPMG over an outrageous tax-avoidance scheme, and with the giant firm's apologists in the Canada Revenue Agency.

By now most people are familiar with the KPMG tax "sham" uncovered by CBC News. [ http://www.cbc.ca/news/business/canada- ... -1.3479594 ] The scheme involved at least 26 wealthy clients (minimum contribution, $5 million) for whom KPMG set up shell companies in the Isle of Man, one of many tax havens for the rich and large corporations.

The Canada Revenue Agency initially said the scheme was "grossly negligent" and "intended to deceive."

Secretive 'amnesty' deals

But 15 of the 26 participants would end up getting special treatment. Some of the first ones caught were assessed huge penalties, but later KPMG clients were offered a secret deal. The "amnesty" agreement granted rich KPMG clients immunity from civil and criminal prosecution and freedom from any penalties, fines or interest as long as they paid the taxes they had dodged. Secrecy was written into the agreement: "The taxpayer agrees to ensure the confidentiality of the offer and will not inform any person of the conditions of the offer..." [ https://www.documentcloud.org/documents ... ients.html ]

Dennis Howlett of Canadians for Tax Fairness [disclosure: I am on the board] said KPMG should be charged with facilitating tax evasion. [ http://www.advisor.ca/news/industry-new ... dog-203872 ] Other tax experts said a criminal investigation is warranted. [ http://www.cbc.ca/news/business/kpmg-ta ... -1.3223371 ]

Canadian anti-fraud lawyer Martin Kenney thinks Canadian authorities should be prosecuting more often. [ http://www.advisor.ca/news/industry-new ... dog-203872 ] "If there's clear tax evasion, you have to put some people in jail to make it clear people should not be playing games with their tax returns." And Duane Milot, a Toronto tax lawyer with middle-income clients who end up in court agrees: "It's outrageous. 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.'" [ http://www.cbc.ca/news/business/canada- ... -1.3479594 ]

People do go to jail for tax evasion, but the richer you are and the more tax you evade the more likely it is that you'll get away with it. The CRA justifies the practice, saying it's too expensive to take the big fish to court and fight the best lawyers money can buy. "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," CRA media relations officer Philippe Brideau said in a statement. [ http://www.cbc.ca/news/business/canada- ... -1.3479594 ]

Better to have the justice department prosecute the small fish and cut deals with the wealthy. But this isn't justice -- it's expediency. The CRA and the justice department have a moral obligation to the Canadian people to name and prosecute those who have grossly and arrogantly flouted the law.

Right now, the CRA seems uninterested in pursuing these cases. In spite of the renewed focus on tax havens and the unprecedented revelations of the Panama Papers, the stalling and obfuscation on the part of the CRA and KPMG continues.

The revenue agency's investigation into KPMG's tax scheme has been stalled for more than three years, and no one will explain why. According the CBC's investigation, "In February 2013, a federal court judge ordered KPMG to turn over a list of unidentified multimillionaire clients who placed their fortunes in an Isle of Man tax shelter scheme." [ http://www.cbc.ca/news/business/federal ... -1.3210113 ] KPMG has still not complied and the fact that the CRA has not requested a court date to enforce its court order has been described as "mysterious." Maybe not.

MORE:

[ http://www.thetyee.ca/Opinion/2016/05/1 ... x-Dodging/ ]

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Related

Canada Joins 21st Century Fight against Tax Dodgers - March 24, 2016
[ http://www.thetyee.ca/Opinion/2016/03/2 ... x-Dodgers/ ]
Federal budget earmarks $90 million annually to tackle evasion. It's about time.


Tax Evasion Convictions Plummet, But Are There Fewer Tax Cheats? - April 16, 2016
[ http://www.thetyee.ca/News/2015/04/16/C ... nvictions/ ]
Critics say federal cutbacks have hobbled investigators.


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[ http://www.thetyee.ca/Opinion/2014/07/2 ... Charities/ ]
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