It’s tax time and any new tidbits of information regarding tax changes make for interesting reading. This week, there were several reports from the CBC and others about the CRA’s new fingerprinting policy and how it could create travel problems for accused tax evaders. In a nutshell, the CRA has begun to record the fingerprints of every person charged with tax evasion, a move that could severely restrict foreign travel for any Canadian accused but not necessarily convicted of a criminal tax offence. They are hoping that this will deter tax evasion.
The new mandatory fingerprinting policy means the fingerprints of all accused tax evaders will be recorded in the Canadian Police Information Centre database, accessible by Canadian police officers as well as some foreign agencies such as the U.S. Department of Homeland Security and border officers.
Fingerprinting has several advantages when trying to catch tax dodgers, but mainly that it helps to catch an accused who fails to appear for trial or sentencing since it allows law enforcement to execute a bench warrant for the arrest of a person alleged to have committed a tax crime, including any accused who may leave the country to avoid facing penalties.
The CRA’s new policy is part of the agency’s key initiative to target tax cheats, especially offshore tax evaders, and includes $444 million earmarked in last year’s budget to combat tax evasion over five years. Since 2015, it’s also become mandatory that all financial institutions report all international electronic fund transfers of $10,000 or more directly to the CRA. In the year since, the CRA has received data on more than 17 million transactions.
The lesson? It pays to be honest and completely transparent with all your tax filings each and every year. We also asked David Walters, media communications for the CRA for further details on the fingerprinting policy. Here’s the CRA’s official response to the new fingerprinting policy, complete with all the details:
“Tax evasion is a serious crime with serious consequences. The Canada Revenue Agency (CRA) is committed to protecting the tax base by ensuring that cases of tax evasion are investigated and, where appropriate, referred to the Public Prosecution Service of Canada (PPSC) for the laying of criminal charges and subsequent criminal prosecution. Law abiding Canadians expect no less.
The Identification of Criminals Act allows for the fingerprinting of those charged with tax evasion offences which may be prosecuted by indictment. In 2016, the CRA implemented a national policy to ensure persons charged with offences associated with tax evasion, fraud, laundering the proceeds of crime, or other indictable offences under the Income Tax Act, Excise Tax Act, or the Criminal Code are consistently fingerprinted.
This new policy is in line with the CRA’s recently enhanced efforts on cracking down on tax evasion and recognizes the seriousness of tax offences and puts persons charged with criminal tax offences on a level playing field with persons charged with other criminal offences. This policy change is to ensure that CRA has a standardized national approach for the fingerprinting of those charged with tax evasion.
The implementation of this national policy is consistent with the approach taken by other law enforcement organizations as well as other federal agencies and departments, such as the Royal Canadian Mounted Police (RCMP) and the Customs Border Services Agency (CBSA). It also aligns with the CRA’s commitment to have laws applied consistently.
The collection of fingerprints is undertaken by qualified law enforcement agencies such as the RCMP and local police. Fingerprints will be recorded in the Canadian Police Information Centre (CPIC) database, which is Canada’s national police database. If an accused is acquitted on all counts, the CRA will request the fingerprints be removed from the database. CPIC allows all domestic law enforcement agencies, such as police officers, access to the identity of individuals charged with, or convicted of, tax offences. Without a national policy on fingerprinting, CRA’s convictions were not always recorded in CPIC. Therefore, some persons convicted of tax evasion were unknown to law enforcement agencies. The CRA policy to fingerprint recognizes the seriousness of tax offences, the importance of tracking these types of cases and their linkage in some instances to other serious offences under the Criminal Code.
CRA’s policy manuals were updated in the fall of 2016 to ensure that all persons charged with the following offences are to be fingerprinted:
•Sections 239(1), 239.1, and 239(1.1) of the Income Tax Act
•Sections 327(1) and 327.1 of the Excise Tax Act
•Sections 380 (Fraud), 462.31 (Laundering the proceeds of crime) or other indictable offences under the Criminal Code that may be applicable in a tax evasion prosecution.
Although the Agency has collected fingerprints in the past, there was no standardized policy and no central registry in place to record this information. It is our intention to start tracking the number of persons fingerprinted as of April 1, 2017. We expect the number of fingerprints to be consistent with the amount of charges laid. Prior to this new policy, fingerprint data was not recorded, as there was no standardized national approach for the fingerprinting of those charged with tax evasion.”
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