Armed With FATCA, IRS Hunts Offshore Tax Evaders, While Canada Eases Up

In a move tied to budgets, Canada’s Revenue Agency is cutting its top staff focused on international tax evasion. Cuts to experienced personnel who ferret out aggressive tax planning appear to be deepest, despite comments by MP Gerald Keddy that “the CRA is not reducing the number of auditors, nor the number of tax evasion and tax avoidance experts.” See CRA to cut managers, fold tax-evasion units, memo shows.

The shake-up is raising concerns that the Canadian government’s crackdown on offshore tax cheats may be all talk. or at least more talk than action. Yet Canada has gone to great pains to make clear that it is going after evaders. For example, Canada signed on to FATCA, the Foreign Account Tax Compliance Act, America’s global tax law.

FATCA is a key weapon in the American war on tax evasion. It requires foreign banks to reveal American accounts holding over $50,000. Non-compliant institutions could be frozen out of U.S. markets, so everyone is complying, even China and Russia. The IRS has a searchable list of financial institutions. See FFI List Search and Download Tool and a User Guide. Countries on board are at FATCA – Archive.