Telephone calls by fraudsters posing as Canada Revenue Agency
("CRA") representatives who threaten immediate legal
action unless a purported tax debt is paid continue despite
warnings published by the CRA1, media2, and
others. The fraudsters are often reported to have South Asian
accents and to use aggressive and threatening language unless the
fictitious tax debt is paid immediately (often by wire transfer or
pre-paid credit card).
For taxpayers with unfiled returns, outstanding tax debts, or
other non-compliance issues the scam may appear more real. That was
the case at our firm last week when a client with unfiled returns
received the call threatening his immediate arrest. Fortunately,
the client referred the call to our firm and we identified the scam
(which used a non-CRA telephone number: 613.800.9164). The client
was noticeably relieved when we passed along the news that this was
a scam. The relief is not surprising since the fraudsters
ultimately are playing with a foundational human emotion –
fear – and using an intimidating and complex area – tax
law – to facilitate such fraud. This is shameful!
The Canadian tax system has many procedures in place to
establish the correct amount of tax payable starting with the
delivery of a written notice of assessment. An outstanding tax debt
is not, by itself, a criminal offence. CRA Collections will also
not ask a taxpayer to provide an access code to a pre-paid credit
card to satisfy a tax debt, will not ask a taxpayer to wire funds
to pay a tax debt, and will not threaten an individual's arrest
or prosecution if a tax debt is not immediately paid3.
For taxpayers with unfiled returns, the CRA's practice is to
issue a written request to file your return by a specified date
before taking any criminal enforcement action. However, should the
CRA decide to pursue a criminal investigation, then the taxpayer
will generally be notified of the investigation prior to any
charge, an information must be sworn setting out the charge, a
summons (or similar document) will be served on the taxpayer as
notice of a court appearance, and paying the tax owing will not
resolve the criminal proceeding.
When a telephone call from an individual claiming to represent
the CRA doesn't smell right, write down the caller's
information and follow up with one of the CRA's published
general information lines4 to verify the authenticity of
the call. Fraudulent calls should be reported to the Canadian
Anti-Fraud Centre5, and victims or those who have
provided personal or financial information to fraudsters should
contact their local police. It should be noted that losses suffered
by victims of the scam are not tax deductible.
Let's hope that our police services crack this case and
bring the perpetrators to justice. In the meantime, be careful out
there. Warn your family and friends who may be susceptible to such
a fraud to not fall victim to this scam.
Moodys Gartner Tax Law is only about tax. It is
not an add-on service, it is our singular focus. Our Canadian and
US lawyers and Chartered Accountants work together to develop
effective tax strategies that get results, for individuals and
corporate clients with interests in Canada, the US or both. Our
strengths lie in Canadian and US cross-border tax advisory
services, estateplanning, and tax litigation/dispute resolution. We
identify areas of risk and opportunity, and create plans that yield
the right balance of protection, optimization and compliance for
each of our clients' special circumstances.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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