Canada Eases Up on Tax Evaders

In a move related to budget cuts, Canada’s Revenue Agency is cutting its top staffed focused on international tax evasion.  The move raises concerns that the Canadian government’s crackdown on offshore tax cheats may be all talk.  However, Canada has gone to great lengths to prove that it is going after evaders, most significantly, Canada signed onto FATCA, the Foreign Account Tax Compliance Act, America’s global tax law.

A lawsuit has recently been filed against the Canadian Attorney General challenging the constitutionality of Canada’s FATCA agreement with the United States.  The legal claim is that the agreement violates provisions of the Canadian Charter of Rights and Freedoms.  That document enumerates the right to life, liberty, security of person; security against unreasonable search and seizure; and equal protection of law without discrimination.  This is a serious charge and the allegation that Canada’s FATCA agreement soars in the face of the “principle that Canada will not forfeit its sovereignty to a foreign state.”  Yet for now, due to the fact that Canada signed FATCA, the IRS will receive the data.

See Robert W. Wood, Armed With FATCA, IRS Hunts Offshore Tax Evaders, While Canada Eases Up, Forbes, Sept. 22, 2012. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.