From: AlanBaggett@volcanomail.com   
      
   Canada Revenue Agency’s uncollected taxes up by 60% since 2006 : CRA SOTW   
      
   Amount owed to the CRA soars even as they crack down   
      
   Jason Fekete Published: April 25, 2013, 5:37 pm   
      
   OTTAWA — The Canada Revenue Agency’s total uncollected tax debt has soared   
   about 60 per cent to $29 billion in the last seven years, at the same time the   
   cost of “doubtful accounts” unlikely to be collected has more than doubled to   
   almost $12 billion.   
      
   The CRA has, however, also significantly increased its collection of other tax   
   debt in recent years — resolving $40 billion in 2011-12 — demonstrating it’s   
   having mixed results in snaring the tax dollars owed by Canadians.   
      
   Federal Auditor General Michael Ferguson will release his spring report on   
   Tuesday — coincidentally, the deadline for Canadians to file their taxes —   
   that includes a follow-up audit on the CRA’s collection of tax debts.   
      
   The agency has been under fire recently for not doing enough to crack down on   
   tax evasion and collect the revenue it’s owed, as the Conservative government   
   plans to cut about 3,000 jobs and more than $300 million from the agency’s   
   budget over the next    
   three years.   
      
   Next week’s auditor general report on the CRA follows up on a scathing 2006   
   audit on the agency’s tax collection strategies, that highlighted a number of   
   concerns and recommendations for improvement, including how to better collect   
   the tax debts owed by    
   Canadians.   
      
   An analysis conducted by Postmedia News finds the CRA’s total tax debt has   
   grown more than 60 per cent since the last audit to $29 billion in 2011-12,   
   from $18 billion in the 2004-05 fiscal year. (The former Liberal government   
   also struggled on the file,    
   as total tax debt grew 88 per cent between 1996-97 and 2004-05).   
      
   Total tax debt includes taxes and other revenues assessed or estimated over   
   several years by the CRA but not yet collected.   
      
   Also, the ratio of tax debt to total cash receipts, which is a trend indicator   
   of how well the revenue agency is managing tax debt, increased to 6.9 per cent   
   in 2011-12, compared to 5.4 per cent identified in the last audit. That means   
   the agency’s tax    
   debt continues to grow at a faster rate than the cash collected.   
      
   “It’s a shocking thing, especially to be reporting now as Canadians are   
   gearing up to pay their taxes,” NDP national revenue critic Murray Rankin said   
   about the tax debt data.   
      
   “This government is not taking care of one of the basic functions of   
   government, which is to collect revenues, and that cascades indisputably into   
   service cuts.”   
      
   While the uncollected tax debt has grown, so, too, has the amount of tax debt   
   collected or resolved by the agency. For the 2011-12 year, the CRA resolved   
   $40 billion in outstanding tax debts (including billions of dollars in   
   write-offs) — an increase of    
   more than $10 billion in debts resolved over the past few years.   
      
   Both the tax debt collected in one particular year and those debts still   
   uncollected can date back several years, allowing both amounts to increase in   
   a fiscal year.   
      
   “Our government is firmly committed to ensuring the CRA is equipped with the   
   tools it requires to maintain the integrity of the tax system. All tax debt is   
   in the process of being collected by the CRA, either through repayment plans   
   or other collections    
   measures,” Revenue Minister Gail Shea said in a statement.   
      
   “The CRA takes a balanced approach to collections that maintains the integrity   
   of the tax system and ensures taxpayers are treated fairly and with respect.”   
      
   Canada Revenue Agency officials say the growth in tax debt in recent years can   
   be attributed to a number of factors, including: an increase in overall   
   revenues due to a higher population and more businesses; new harmonized   
   provincial taxes in Ontario;    
   and combatting aggressive tax planning, which increases the amount of tax   
   assessed.   
      
   Also, the size of the CRA’s “allowance for doubtful accounts” — tax debts   
   viewed as having little potential for recovery — has grown more than 150 per   
   cent since the last audit to about $11.9 billion, compared to $4.7 billion   
   seven years ago, according    
   to CRA data.   
      
   In the 2006 report, the auditor general highlighted concerns with more than   
   one-quarter of the government’s tax debt being considered doubtful accounts   
   that were likely uncollectable. Today, more than 40 per cent of the tax debt   
   is from doubtful accounts.   
      
   The 2011-12 doubtful accounts included approximately $6.1 billion from   
   individuals, more than $1 billion from employers, $1.8 billion from   
   corporations and $2.8 billion from GST/HST.   
      
   Total CRA write-offs were more than $2.8 billion in 2011-12, up slightly from   
   almost $2.7 billion in the last audit, but a significant increase from the   
   $1.9 billion in write-offs in 2005-06.   
      
   Rankin believes the government should be hiring additional CRA staff — rather   
   than cutting thousands of positions — to help collect the dollars owed by   
   taxpayers.   
      
   “The enforcement priorities of this government are really dubious,” he added.   
      
   Total tax debt (taxes and other revenues assessed/estimated by CRA but not yet   
   collected):   
      
   2004-05: $18 billion   
   2005-06: $18.5 billion   
   2006-07: $20 billion   
   2007-08: $23.2 billion   
   2008-09: $24.4 billion   
   2009-10: $25 billion   
   2010-11: $27.4 billion   
   2011-12: $29 billion   
      
   Allowance for doubtful accounts:   
   2004-05: $5.7 billion   
   2005-06: $4.7 billion   
   2006-07: $6.4 billion   
   2007-08: $8.6 billion   
   2008-09: $9.3 billion   
   2009-10: $9.9 billion   
   2010-11: $10.9 billion   
   2011-12: $11.9 billion   
      
   Tax debt resolved:   
   2007-08: $30.5 billion   
   2008-09: $35.2 billion   
   2009-10: $29.6 billion   
   2010-11: $34.1 billion   
   2011-12: $40 billion   
      
   twitter.com/jasonfekete   
   © COPYRIGHT - POSTMEDIA NEWS   
      
   -----------------------------------------------------------    
   Miss a Tax Tale Miss a lot!    
   Visit the CRA SOTW Library at http://canada.revenue.agency.angelfire.com    
   ------------------------------------------------------------    
   Alan Baggett – Tax Collector’s Bible -  http://taxcollectorsbible.com/   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)