Tax raids target RRSP scams
The Canada Revenue Agency said Thursday it has executed search warrants at more than 50 locations in western Canada as part of a crackdown on fraudsters who prey on RRSP savings.
The tax agency said more than 300 of its investigators and staff have been involved in the searches, which have taken place over the past week in British Columbia, Alberta and Saskatchewan.
So far, no charges have been laid. A spokesperson for the CRA said the agency hopes to have something to report on that front in a few weeks.
The searches are targeting promoters who've been advertising schemes that promise ways to:
- Withdraw money tax-free from RRSPs or RRIFs.
- Get immediate access to "locked-in" RRSPs or RRIFs.
- Get an income tax deduction worth far more than the amount invested in an RRSP.
The CRA says these tax evasion schemes have been "popping up across Canada."
"Typically, promoters of these questionable schemes direct the owner of a self-directed RRSP or RRIF to purchase a particular investment through a specific trustee," says a circular from the CRA.
The CRA said it has finished or is in the process of reassessing the tax returns of 4,900 Canadians who'd claimed deductions for fraudulent schemes. More audits are planned.
"Canadians should know that they are responsible for taxes and interest owed on taxes evaded, even if a promoter indicates otherwise," said CRA commissioner William Baker in a statement.
Under RRSP rules, people must report all withdrawals from a registered retirement plan as income and pay taxes on them. The only exceptions are withdrawals made through specific government-sanctioned programs, such as the Home Buyers Plan and the Lifelong Learning Plan.