The Canada Revenue Agency (CRA) conducted surveys of accountants and tax lawyers to get their opinions on whether to provide amnesty to scofflaws who confess to not paying their taxes..According to Blacklock’s Reporter, internal research at the CRA recognized the idea was "contentious.".“Most Canadians file and pay their taxes in full and on time, and it is important the relief provided under the Voluntary Disclosures Program be fair and not reward individuals or corporations looking for a way to avoid paying their fair share of taxes,” said the Voluntary Disclosures Program Research..The program allows Canadians who have failed to pay taxes and were never audited to apply for a 50% penalty reduction by admitting their failure to pay..Tax experts in focus groups cited a “belief that generally there is a very low chance of clients being audited by the Canada Revenue Agency.”.“Participants identified several suggestions to enhance the design of the Voluntary Disclosure Program,” wrote researchers. .“These included a program based on the principle of amnesty, allowing clients to come forward with any errors and only pay the amount owing without any added penalties or interest.”.“Many participants felt incentives offered under the general program, namely partial interest relief at 50% and a ten-year limitation period, were not enticing enough, which resulted in an attitude characterized by individuals taking their chances and hoping not to get caught,” said the report. .“Instead, they suggested if clients are expected to act in good faith by coming forward with prior errors and missteps, they should only be required to pay the amount owing rather than opening themselves up to the potential of unknown interest or penalties.”.“A system of amnesty where applicants should only be required to pay the amount owing and not be subject to a limitation period was thus felt to be more effective,” wrote the CRA. The idea was contentious, it admitted..“This suggestion was contentious for others who felt that offering incentives or guaranteed relief may be unfair and create a ‘moral hazard’ in that relief may incentivize taxpayers in the wrong direction towards intentionally evading taxes or making errors as there would be minimal consequences,” said Program Research..Findings were based on eight focus groups with chartered accountants, tax lawyers and tax preparers nationwide. The CRA paid $90,493 for the research by Ipsos..According to official estimates, approximately 9,000 Canadians apply for relief under the program each year. The program has successfully collected unpaid taxes through disclosures from domestic income, with the annual value reaching as high as $900 million..The Voluntary Disclosures Program gained attention when former prime minister Brian Mulroney used it in 2000. He reported receiving $225,000 in undisclosed cash payments, which he had received six years earlier from a German arms dealer Karlheinz Schreiber..Mulroney later testified that he had stored the cash in an office safe and a deposit box in New York..“In 1999, Mr Schreiber was arrested in Toronto under an international warrant and charged in Germany with corruption, fraud, bribery and income tax evasion,” Mulroney testified at the Commons Ethics committee at the time. .“This stunning new development put in serious doubt my relationship with him.”
The Canada Revenue Agency (CRA) conducted surveys of accountants and tax lawyers to get their opinions on whether to provide amnesty to scofflaws who confess to not paying their taxes..According to Blacklock’s Reporter, internal research at the CRA recognized the idea was "contentious.".“Most Canadians file and pay their taxes in full and on time, and it is important the relief provided under the Voluntary Disclosures Program be fair and not reward individuals or corporations looking for a way to avoid paying their fair share of taxes,” said the Voluntary Disclosures Program Research..The program allows Canadians who have failed to pay taxes and were never audited to apply for a 50% penalty reduction by admitting their failure to pay..Tax experts in focus groups cited a “belief that generally there is a very low chance of clients being audited by the Canada Revenue Agency.”.“Participants identified several suggestions to enhance the design of the Voluntary Disclosure Program,” wrote researchers. .“These included a program based on the principle of amnesty, allowing clients to come forward with any errors and only pay the amount owing without any added penalties or interest.”.“Many participants felt incentives offered under the general program, namely partial interest relief at 50% and a ten-year limitation period, were not enticing enough, which resulted in an attitude characterized by individuals taking their chances and hoping not to get caught,” said the report. .“Instead, they suggested if clients are expected to act in good faith by coming forward with prior errors and missteps, they should only be required to pay the amount owing rather than opening themselves up to the potential of unknown interest or penalties.”.“A system of amnesty where applicants should only be required to pay the amount owing and not be subject to a limitation period was thus felt to be more effective,” wrote the CRA. The idea was contentious, it admitted..“This suggestion was contentious for others who felt that offering incentives or guaranteed relief may be unfair and create a ‘moral hazard’ in that relief may incentivize taxpayers in the wrong direction towards intentionally evading taxes or making errors as there would be minimal consequences,” said Program Research..Findings were based on eight focus groups with chartered accountants, tax lawyers and tax preparers nationwide. The CRA paid $90,493 for the research by Ipsos..According to official estimates, approximately 9,000 Canadians apply for relief under the program each year. The program has successfully collected unpaid taxes through disclosures from domestic income, with the annual value reaching as high as $900 million..The Voluntary Disclosures Program gained attention when former prime minister Brian Mulroney used it in 2000. He reported receiving $225,000 in undisclosed cash payments, which he had received six years earlier from a German arms dealer Karlheinz Schreiber..Mulroney later testified that he had stored the cash in an office safe and a deposit box in New York..“In 1999, Mr Schreiber was arrested in Toronto under an international warrant and charged in Germany with corruption, fraud, bribery and income tax evasion,” Mulroney testified at the Commons Ethics committee at the time. .“This stunning new development put in serious doubt my relationship with him.”
