Canada Revenue Agency Conducts Raids in Panama Papers Investigation

February 15, 2018
Personal Tax Planning

written on behalf of Feigenbaum Law

Earlier this week, the Canada Revenue Agency (CRA) announced that it has executed three search warrants stemming from their investigation into offshore tax evasion made public in the Panama Papers.

The Investigation

This investigation is one of 42 international or offshore tax evasion cases that the CRA is currently investigating. The CRA is particularly focused on sophisticated and well-organized tax evasion schemes.

Yesterday, approximately 30 CRA officers, assisted by the RCMP and local police forces, executed the warrants and raided locations in West Vancouver, Calgary, and the GTA. They were searching for any evidence related to offences against the Income Tax Act and the Excise Tax Act. The CRA has identified a series of transactions involving transfers involving offshore bank accounts and foreign corporations that it believes were being used to evade taxes.

The Agency has not identified which businesses or individuals were targeted in this week’s raid, and a spokesperson would not provide CBC News with any further information. The CRA has, however, noted several times that it is pursuing criminal investigations related to potential tax evasions based on the data leaked through Panama Papers and that it has executed an unspecified number of other search warrants since summer 2016.

While CBC News has attempted to obtain further information about these investigations from the CRA, the Agency has refused to disclose anything about them, citing taxpayer privacy.

Senator Percy Downe, a member of the Senate’s Liberal caucus and long-time critic of the CRA’s approach to tax evaders, told the CBC:

“The CRA over the years has not been doing a very good job at explaining to Canadians what they’re doing and why they’re doing it…[a]ny effort they’re making to be more transparent in their activities is obviously welcome.”

Panama Papers

The Panama Papers leak was initially revealed in April 2016. Within a month, the CRA obtained all the leaked records via official channels.

Since then, while about a dozen governments worldwide claim to have recovered a combined total to $500 million in unpaid taxes, the CRA has not collected any money. This has increased continued criticism of the ability of the Agency to effectively address tax evasion.

Legal Consequences of Tax Evasion

Failing to comply with Canadian tax laws can result in serious consequences including audits and reassessments, civil penalties, criminal tax investigations, criminal charges, and prosecutions that could result in fines, jail time, and even a criminal record.

Individuals convicted of tax evasion under the Income Tax Act and/or the Excise Tax Act. can face fines ranging from 50% to 200% of unpaid taxes and up to five years in prison. Individuals convicted of fraud under the Criminal Code can face up to 14 years in prison.

We will continue to follow developments in this investigation and will provide updates as details unfold.

Contact Mark Feigenbaum for a custom solution to your personal or corporate tax needs. Our goal is to create the best tax strategy possible for our clients. We work with you to create a personalized solution that will streamline your compliance requirements and set you up to take advantage of all possible current and future opportunities. Our focus is complex matters related to tax planning for individuals with high net-worth. Contact us to learn more about how we can help or call us at (905) 695-1269 or toll free at (877) 275-4792.


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