Revenue Agency says 44 offshore tax cheats convicted since 2006, won't say who

OTTAWA – As an international investigation of tax evaders broadens to include Canadian authorities, the federal government says it has convicted just 44 individuals of offshore tax cheating since 2006 — but won’t say who they are.

The Canada Revenue Agency reports that a total of $6.8 million in fines were assessed on offshore cheaters who evaded $7.7 million in taxes between April 2006 and March 2012.

A total of 44 convicted tax cheats were collectively sentenced to 337 months in jail, with sentences ranging from no jail time to two years. Fines ranged from $12,000 to $1.1 million.

The information had to be pried out of the CRA by a Liberal opposition MP’s order paper question in Parliament.

However, the agency is withholding not only the names of individuals convicted, but also any information that would link a particular penalty to a dollar amount in taxes evaded.

“The conviction details related to monies or assets located offshore are, in most of the cases noted, not part of the public record and not detailed in the court records,” said the CRA’s written response.

It said making such information public would break privacy rules.

“Furthermore, to provide the information sought might lead to inferences being drawn between those named and any assets and money held offshore …”

Revenue Minister Gail Shea announced this week that Ottawa is being given access to Canadian data from a continuing offshore tax-evasion investigation being conducted by American, Australian and British authorities.

Last month, a consortium of international media began reporting on a massive leak of financial data from 10 offshore tax havens involving about 130,000 individuals, including 450 Canadians.

“We have secured a commitment for our international partners to share this list with Canada so that’s a very important step,” Shea said Friday outside the House of Commons.

“Once this information is received, of course it’ll be properly followed up and investigated.”

She added that “the message is for those who want to participate in international tax evasion that we will find you.”

But critics say that message is curiously muted.

Scathing comparisons between the perceived severity of a crime and the eventual sentence handed down upon conviction are a staple of critiques of the criminal justice system.

The current Conservative government mantra — “Do the crime, do the time” — is based on public perceptions about the proportionality of sentences.

However, the tax system appears set up to shield convicted tax cheats and tax enforcement authorities from this kind of public scrutiny, say critics.

“It’s a mystery,” said Percy Downe, the Liberal senator who has been leading the charge to crack down on offshore tax cheats.

“We’ve been trying for years to get information from the CRA and I find you have to keep asking the same question in various ways before they disclose anything.”

Six years ago, CRA received a list of 106 Canadians who held accounts in Liechtenstein, and the agency was given another 1,785 Canadian offshore accounts two years later.

From those 106 Liechtenstein accounts, the CRA said it has assessed $22 million in tax owing — of which it has collected $8 million to date.

It appears no one has been charged, says Downe.

“I’m not aware of a world where people pay $8 million (in evaded taxes) and they have not done anything wrong, not one person in that file has been charged with any offence. How does that work? And who are they?”

Deep budget cuts by the Conservatives to the Canada Revenue Agency are raising further fears that Ottawa’s tax investigative powers are being hobbled, although the government insists otherwise.

Downe says tax evaders who bank domestically are almost always caught, frequently for small amounts that the CRA pursues aggressively.

“They go after the easier cases because they don’t have the resources to go after the harder cases,” said the Liberal senator.

“It undermines the confidence of the tax system. It undermines the confidence that Canadians have that everyone’s being treated fairly. It’s a serious problem.”

Although the revenue agency publishes the names of people convicted of domestic and offshore tax offences, it posts their names online for only six months — after which it says privacy rules prevent it from identifying the individuals.