Enhanced CRA Audits
The 2005 Federal Budget proposed to invest $30 million annually in enhanced CRA audit and collection activities in respect of international tax evasion and aggressive international tax planning.
Question
Could the CRA advise us on how these funds will be deployed and what steps have been taken to date?
Response
The International Tax Directorate (“ITD”) and the Tax Avoidance and Special Audit Division (“TA”) have formed a strategic partnership to undertake a new initiative with respect to the announcement in the 2005 Federal Budget of a $30 million investment to specifically address Aggressive International Tax Planning (“AITP”). These resources will be used to increase audit and compliance capacity with respect to cross-border and international transactions using a risk-based approach and investing in research and analytical capability. This funding will help ensure that more high-risk schemes, especially those involving AITP, will be identified and audited than was possible previously.
The resources will be used in:
- Creating 11 centres of expertise across the country (combining international tax and tax avoidance officers to develop new ways to track and combat AITP);
- Having auditors in each region;
- Identifying potential projects and conducting research;
- Doing test audits and identifying risk indicators; and
- Building acquired experience into risk models.
The resources have already been allocated to the field, and the field offices are now in the process of filling the positions.
The AITP Resources to be allocated to the field on an on-going basis are:
| FTEs* | Total Costs $ | |
| Total ITD & TA (50% & 50%) | 213 | 21.5M |
| Other Areas – Appeals, Collections, Investigations, etc. | 36 | 3.3M |
| Corporate Support Costs | 32 | 1.9M |
| Other Government Departmental Costs (Justice, etc.) | 3.3M | |
| Total Resources | 281 | 30M |