It’s increasingly important for advisors to ensure their clients' offshore accounts are handled with care after the Auditor General praised the Canadian Revenue Agency for nailing a list of offshore holdings, in a report released Tuesday.
According to the report, the CRA received tips in 2007 about possible undeclared income in offshore accounts in Liechtenstein. With limited information, the CRA completed 46 audits and assessed more than $24 million in taxes owed.
Valuable intelligence into the complicated schemes has enhanced the CRA's detection and audit procedures for cases of international tax evasion and aggressive tax avoidance.
Action plans are underway to implement the Auditor General's recommendations and further strengthen the CRA's capacity to address non-compliance by taxpayers with offshore holdings.
New tools and legislative measures, announced in the 2013 budget, include:
The new Stop International Tax Evasion Program
The mandatory reporting of international electronic funds transfers more than $10,000 to the CRA
Enhanced reporting requirements for Canadian taxpayers with foreign income or assets - Foreign Income Verification Statement
Streamlining the judicial process in which the CRA seeks authorization to obtain information on unnamed persons from third parties such as banks
Extending the normal reassessment period by three years for taxpayers who have failed to report income from a specified foreign property on their annual income tax return and failed to properly file the Foreign Income Verification Statement