CRA Trusts a Mobster? Mobster Owing $1.5M Sent Rebate Cheque for Almost $400K

While the CRA is busy running down average hardworking Canadians, mobsters appear to be getting cheques. The CRA, particularly the office in Montreal, has come under close scrutiny in the last few months after news of an odd rebate cheque surfaced. Why is this an issue – rebate cheques are, after all, distributed on a daily basis? Because the recipient was Nicolo Rizzuto - not an unknown name, especially within the Quebec underground.  

When the cheque was made out in September 2007, Rizzuto was in jail (arrested and charged with extortion, bookmaking and drug smuggling in one of the biggest police crackdowns on Mafia related activity in Canadian history) and, as a recent CBC News report explained, “Court records show that at the time, he also owed the tax department $1.55 million, which the Canada Revenue Agency tried to collect by getting a tax lien on his home.” 

When this glaring slip was noticed by a veteran investigator within CRA, more than a few individuals raised eyebrows. The cheque was subsequently returned by the family, but it has left many questioning how this cheque made its way past the numerous controls at CRA and into the mail in the first place. 

An internal investigation into this situation and the claims of corruption has since been launched, and a number of CRA employees have been fired - some of these individuals have also been charged by the RCMP with crimes including tax fraud, extortion and breach of trust.

So this begs the question, if the system is corrupt enough to let an almost $400K rebate cheque be issued to someone with a $1.5M tax debt, what measures are in place to ensure that that same organization is on the ball (or dare we say trustworthy) when it comes to the average person’s taxes? And how can you trust CRA promises made to you when you think or know that money is owed. CRA agents have a reputation for duplicity when it comes to extracting money owed, so why voluntarily open yourself up to tax problems? 

Sure, the likelihood of dealing with a corrupt CRA agent is not so high for the average Canadian, but does this mean that you shouldn’t do everything to protect yourself from CRA incompetence? If you know that there are mistakes in past filings, or if you have failed to file past returns, an audit may be in your future. And likely CRA audit and collection team’s agents will contact you in an attempt to discover any inconsistencies or incorrect accounts. If this happens, never just hand over the information being requested (this will not make the “nice agent” your friend - they are the collector using collector strategy to collect from you). It is highly advisable that you contact a professional organization with the specific expertise to help keep CRA hands off of your information and manage the process to avoid enforcement action. There are a number of different programs offered to help individuals with tax debts, but things need to be done correctly the first time to avoid rejection or further intrusive investigations. 

For more about how to protect yourself from the CRA please contact Tax Solutions Canada by calling 1-888-868-1400.