From: AlanBaggett@volcanomail.com   
      
    The Canada Revenue Agency is rotten to the core. Time to clean house :CRA SOTW   
   Alan Freeman   
      
   If Al Capone had lived in Canada, he might never have seen the inside of a   
   prison. After authorities in Chicago tried and failed to prosecute the   
   notorious 1920s gangster for murder, racketeering and extortion, the U.S.   
   Treasury was brought in and Capone    
   was charged with tax evasion.   
      
   Capone, who was earning millions off the proceeds of crime, never bothered to   
   file a U.S. income tax return. He was convicted and sentenced to 11 years; he   
   served seven and a half and died a broken man. A modern Capone living in   
   Canada — and smart    
   enough to hire a well-connected accountant — would have made a voluntary   
   disclosure, paid his back taxes with a bit of interest and gone back to his   
   nasty business.   
      
   My late father — who was about as straight an arrow as they come — told me   
   once how the Americans treat tax evasion. “In the U.S., if you dodge taxes,   
   the IRS will get you thrown in jail. In Canada, you can always do a deal with   
   Revenue Canada.    
   They just want the cash.â€�   
      
   Which explains why the Canada Revenue Agency was in such a hurry to offer a   
   secret amnesty deal last year to the wealthy clients of KPMG who had been   
   caught evading millions of dollars in taxes. The CRA reported participants in   
   the scheme paid a 15 per    
   cent cut on taxes saved to KPMG, sent their fortunes to the Isle of Man — a   
   well-known tax haven — and got it paid back to them as tax-free gifts.   
      
   Meanwhile, the rest of us are expected to candidly file our taxes and be   
   grateful for a few bucks saved on a TFSA or a tax credit for our children’s   
   ballet lessons.   
      
   According to the CBC, which conducted a thorough investigation of the scam,   
   beneficiaries of the KPMG scheme won’t face penalties, won’t be threatened   
   with criminal prosecution or — God forbid — jail. As for the professional   
   accountants and    
   lawyers who concoct such schemes and profit handsomely from them, they can go   
   back to dreaming up new ways of ripping off the Canadian taxpayer and scoring   
   fat government contracts — while remaining generous contributors to our   
   governing parties. That†  
   ™s the Canadian way.   
      
   This disgraceful action on the part of the CRA is just the latest in a long   
   line of scandals that prove it has forgotten that its role is to protect the   
   tax system — not destroy it through corruption, lax controls and a tendency   
   to protect the wealthy    
   from the consequences of their greed.   
      
   Remember that corruption scandal that erupted in the Montreal’s CRA office a   
   few years back? A police probe of the Montreal mafia turned up a scheme which   
   allegedly saw government-employed auditors conspiring with crooked   
   entrepreneurs to help them    
   evade millions of dollars worth of taxes. There were reportedly cash bribes   
   and outings to Montreal Canadiens hockey games, where CRA auditors were wined   
   and dined by their unsavory business partners.   
      
   Several CRA officials were fired and charged with bribery, breach of trust and   
   fraud. Their cases are still winding their way through the courts — but what   
   has never been addressed is the question of how.   
      
   How was this rot allowed to spread? Why has the CRA’s leadership never been   
   held to account for it?   
      
   Then there was the systematic abuse of the CRA by the Harper Conservatives   
   through special audits targeting environmental non-profits that didn’t align   
   with the Harperite view of the world. It was a tactic lifted directly from the   
   Putin playbook — a    
   concerted effort to tar environmental groups opposed to new pipelines as   
   enemies of the state. The CRA’s leadership, cheerfully following orders,   
   went along with the audits and further undermined the agency’s integrity.   
      
   The CRA has also shown itself to be incapable of protecting the privacy of   
   Canadians against unreasonable intrusion. Last month, the Security   
   Intelligence Review Committee disclosed that the Canadian Security   
   Intelligence Service had managed to get its    
   hands on private taxpayer information from the CRA without a warrant and in   
   clear breach of the law. The CRA, clueless as ever, said it didn’t know what   
   information had been shared but assured the public that the rogue employee who   
   had handed over the    
   data was no longer there.   
      
   This week, we learned that the CRA turned over 155,000 banking records to the   
   U.S. Internal Revenue Service in the middle of last year’s federal election   
   â€” without waiting for the outcome of a court challenge to this unprecedented   
   sharing of taxpayer    
   data, without hearing an opinion from the Privacy Commissioner. And the   
   individuals involved have never been informed by the CRA of its action.   
      
   All of this is important. We live in a democracy, and our tax system is part   
   of it — the means by which we make sure that the cost of government is   
   shared fairly by citizens. But the system is only legitimate if it is   
   rules-based and plays no favorites.   
    If we want Canadians to respect the law, accountants and lawyers who cook up   
   schemes to defraud the government should be hauled before the courts and   
   thrown in jail if necessary.   
      
   It would take years and millions of dollars in legal fees. It would be worth   
   it.   
      
   Alan Freeman is a Senior Fellow at the University of Ottawa’s Graduate   
   School of Public and International Affairs. He came to the U of O from the   
   Department of Finance, where he served as assistant deputy minister of   
   consultations and communications.    
   Alan joined the public service in 2008 after a distinguished career in   
   journalism as a parliamentary reporter and business journalist for The   
   Canadian Press, The Wall Street Journal and The Globe and Mail. At the Globe,   
   he spent more than 10 years as a    
   foreign correspondent based in Berlin, London and Washington.   
      
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