The federal government is giving lucrative contracts to suppliers who avoid paying their share of taxes by using tax havens. This includes individuals and organizations named in the Panama Papers. Those findings, and recommended changes to the current rules, are contained in a report by Canadians for Tax Fairness and the labour organization Unite Here.
Why are Tax Haven Users Getting Govt Contracts? Canadians for Tax Fairness
Tax Court Denies Claim in Offshore Account Case with Very Unusual Facts Because the Information Did Not Produce Collected Proceeds
In Awad v. Commissioner, T.C. Memo 2017-108, here, a whistleblower case,
the following is the key time line:
Awad files WB claim (Form 211) identifying husband and wife (TH and TW, respectively) and their three adult children as owners of undisclosed foreign bank account.
WBO assigns to LB&I
LB&I Agent reviews returns and decides to accept as filed based on insufficient information
TW and children file "voluntary disclosures pertaining to a previously undisclosed account at the same foreign bank" Awad had disclosed.to WBO
SB/SE opens exam incident to voluntary disclosure
LB&I returns the case to WBO (although a year after LB&I made decision not to pursue)
WBO discovers SB/SE exam and forwards information to SB/SE for possible use in examination
SB/SE Agent interviews Awad by telephone; Awad provides additional information
SB/SE advises WBO that the information did not assist in the audit
IRS enters closing agreement on the voluntary disclosure requiring tax, penalties (including MOP) in excess of $2M for TW and estate
WBO learns of estate tax exam for TPH and refers information to SB/SE Estate and Gift Tax
WBO denies award.
but they are not relevant to the outcome because the examining agents involved in LB&I and SB/SE all attested that the Form 211 information did not contribute to the ultimate outcome -- the acceptance of the TH Estate and TW's voluntary disclosure. After all, for collection, the information does have to contribute to collected proceeds to permit a WB award.
The thing that is curious to me is that there were no procedures to flag the matter when the WBO first assigned it to LB&I so that, after that date, the taxpayers could not qualify for voluntary disclosure. It is true that the procedure assumes disqualification only after the IRS has flagged the taxpayer for audit. (I have had one client thus disqualified even though the IRS had never notified him of the audit.) I understand that LB&I had not yet decided to audit, but it seems to me that there should be some way to disqualify once WBO decides the information has sufficient gravitas to refer to Examination, at least while it is in that status. Just my view.
Globalisation Work: Better Lives for All, I have a piece in Inside Story, headlined: The OECD joins the backlash against unfettered globalisation looking at a recent report they’ve issued. The subheading is
But can an organisation that has promoted a globalised world economy take on the massively powerful finance sector?
"Too soon we grow old, too late we grow smart..."
John Quiggin OECD vs Globalisation
Sydney's primary school overcrowding to hit high schools
SSCL is a joint venture between the Cabinet Office and French outsourcer Sopra Steria, intended to shift departments' back office servers and ERP systems into privately owned shared services centres Oh the irony: Government Digital Services can't pay staff because of tech problems