CRA has launched a new initiative called “Project Trident” in which they are targeting the “Triple Threat Tax Fraud” namely “identity theft, charities?related fraud, and tax preparer fraud.”

Here is a copy of the CRA news release:

http://www.cra-arc.gc.ca/nwsrm/rlss/2009/m01/nr090123-eng.html

News release Triple threat tax fraud targeted by the Canada Revenue Agency Minister Blackburn declares

Ottawa, Ontario, January 23, 2009… The Canada Revenue Agency (CRA) has launched a Web page dedicated to Project Trident, a nationwide enforcement and awareness project that targets three types of illegal activity: identity theft, charities?related fraud, and tax preparer fraud. This Web page will help Canadians recognize tax fraud and learn how to protect themselves against it.

“Project Trident is a hard-hitting CRA project that protects the tax base by prosecuting players in fraudulent tax schemes and reassessing tax returns,” said the Honourable Jean?Pierre Blackburn, Minister of National Revenue. “We have had good results in prosecuting the people who perpetrate these activities, and have reassessed a significant number of returns,” added Minister Blackburn.

There are currently over 70 cases that make up Project Trident in various stages of investigation. In addition, there have already been 13 convictions, resulting in over $1.8 million in fines and a total of 210 months in mandatory jail time.

“The three types of illegal activity are often used in combination,” indicated Minister Blackburn. “Many of the cases involving tax preparer fraud also involve charities-related fraud or identity theft. For example, some unscrupulous tax preparers sell false receipts for charitable donations to their clients. Others commit identity theft by using personal information from legitimate clients to file fraudulent tax returns.”

Charities-related fraud can be committed on its own, without involving identity theft or unscrupulous tax preparers. For example, a charity could be set up to sell inflated tax receipts, but perform little to no charity work. 

The CRA audits charities to put a stop to such fraudulent schemes and intends to prosecute tax preparers, directors of charities, and donors who are found to be involved.

The CRA is on the lookout for identity theft. As soon as the CRA confirms that taxpayer information has been compromised, we do everything necessary to prevent the fraudulent use of that information.

Visit www.cra.gc.ca/projecttrident to find out more about these types of fraud, to see a summary of convictions, and to stay up to date on the fines, jail time, and reassessments in these cases.

Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario.  He can be contacted at mark@blumbergs.ca or at 416-361-1982 x. 237. To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit the Blumbergs’ Non-Profit and Charities page at www.blumbergs.ca/non_profit.php or www.globalphilanthropy.ca

This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.