Statement - The Canada Revenue Agency (CRA) has zero tolerance for fraud
Whether it be a threat from external bad actors, or taxpayers willfully submitting fraudulent returns, the CRA is...
In this article3 sections
Whether it be a threat from external bad actors, or taxpayers willfully submitting fraudulent returns, the CRA is standing on guard.
Protecting taxpayer accounts
In today’s increasingly digital world, safeguarding sensitive information against constantly evolving threats is critical for every organization, including the CRA. The protection of taxpayer information remains one of our highest priorities. Recognizing that even with our robust security controls, we, like many large organizations, are not immune to privacy breaches, and we recognize the worry and frustration this can cause for those affected.
The CRA has a wide array of security measures to protect the personal information of Canadians, and to shutdown would-be fraudsters. That said, bad actors are continually evolving their tactics and so we must be vigilant in adapting to stay one step ahead.
In fact, since 2020, the CRA has implemented numerous security measures, technologies, processes and controls to ensure the security of taxpayer information including multi-factor authentication throughout CRA login services, and proactively revoking user IDs and passwords that may have been obtained by unauthorized third parties through external sources.
We have been successful in protecting hundreds of thousands of fraudulent attempts to gain access to personal and business taxpayer accounts.
When we suspect an account is the target of an external threat actor, we take swift and immediate precautionary measures on the taxpayer’s account such as locking it to prevent transactions, conducting in–depth reviews, and contacting the individuals. The CRA formally notifies the affected individuals and provides credit protection, where warranted, at no cost to them.
Taxpayers who are confirmed victims of identity theft are not held responsible for any money paid out to scammers nor penalties or interest related to fraudulent claims.
The CRA has processes in place to report all material privacy breaches to Treasury Board of Canada Secretariat (TBS) and the Office of the Privacy Commissioner of Canada (OPC).
The CRA is prevented from commenting on taxpayer information obtained from compromised third parties, due to privacy protections found in the Income Tax Act.
Fraudulent tax returns
The vast majority of Canadians are honest, law abiding taxpayers. As such, Canada’s tax system is based on voluntary compliance and self-assessment. Individual taxpayers are responsible for ensuring the information they report on their tax returns is accurate.
Unfortunately, there are those few who believe they are above the rules of society. For that reason, the CRA has strong safeguards in place to catch this small percentage of fraudsters who willfully submit false claims in order to steal funds from the collective purse. Safeguards include automated and manual checks, as well as cooperation with financial institutions, to flag suspicious returns and participants in illegal tax schemes before funds are distributed.
The CRA does not publicly discuss tax schemes utilized by bad actors, to avoid inspiring other would-be fraudsters from following suit.
Taxpayers who claim false expenses, credits or rebates from the government are subject to serious consequences. They are liable not only for corrections to their tax returns and payment of the full amount of tax owing, but also to penalties and interest. They may also face criminal prosecution.
In rare cases where fraudulent funds are paid out, we take every available enforcement action to return the funds to the Crown and hold the offending parties accountable. This includes criminal investigations that could be referred to the RCMP.
Once convicted, tax evaders can face penalties, court fines, and jail time — in addition to having to pay the taxes they tried to evade, plus interest. High-profile enforcement actions are publicized through enforcement notifications.
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SOURCE Canada Revenue Agency
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