Rewards rise for informants blowing whistle on offshore federal tax non-compliance

Bennett Jones asked for new data on the CRA’s Offshore Tax Informant Program

Rewards rise for informants blowing whistle on offshore federal tax non-compliance
Martin Sorensen

A law firm’s Access to Information Act request revealed that there has been a surge of whistleblower payouts related to a Canada Revenue Agency program.

Bennett Jones LLP lawyer Martin Sorensen says the data may be useful for lawyers that work on fraud cases, litigation, as well as lawyers who collect against debtors.

“It’s of interest to tax lawyers because we like to see what the CRA is up to, and clients may have information that could give rise to a reward,” says Sorensen, a partner in firm’s the Toronto office, which has acted for whistleblowers in the past. “If you become aware of any international non-compliance involving a Canadian taxpayer, then you could consider making a submission.”

Bennett Jones asked for new data on the CRA’s Offshore Tax Informant Program, which rewards informants with between 5 per cent and 15 per cent of taxes collected, as long as the informant’s tip leads them to find international federal tax non-compliance of at least $100,000.

The CRA revealed that OTIP had received 593 written submissions which resulted in 100 audits, and CRA had entered into 38 contracts with informants, according to the law firm.

The result? The CRA discovered non-compliant taxpayers who together owed more than $33.9 million in federal taxes. So far, the revenue agency collected about $19.3 million in taxes and penalties and has paid out about $1 million to informants.

While the CRA wouldn’t go into detail on the exact figures, Bennett Jones said that as recently as 2016, the CRA hadn’t paid out any rewards. At that time, the CRA had 333 submissions and about 12 contracts with informants, Bennet Jones said.

“It’s an area where we are seeing clients come to us and ask how they can make a submission under this program,” Sorensen says.

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