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July 22, 2020
CRA & Global Tax Authorities Increasing Enforcement Capabilities On Existing Tax Legislation

If you own U.S. real estate, whether for personal use or for investment purposes, now may be a good time to ensure that you’re fully compliant with your Canadian tax filing obligations, as it appears that the Canada Revenue Agency may soon be doing some mass sleuthing of publicly-available U.S. property records.

In a Request for Information (RFI) posted online on June 25 entitled “Bulk United States (U.S.) Real Property Data (re Canadian residents),” the CRA announced that it is looking for a provider to supply the Agency with U.S. real property data. In the RFI, the government stated that it is specifically looking for “U.S. real estate and real property data where a Canadian resident is the owner or party to the purchase, sale, or transfer. Real estate and property data is required in bulk form in order to identify current and historical records, mortgage transactions, property taxes, real property records, and deeds.”

The RFI goes on to say that the requested information “will enhance the CRA’s ability to administer tax programs, to enforce the various Tax Acts in order to protect Canada’s revenue base, and to support the CRA’s business and research processes.”

Governments around the world are going to find it very difficult to increases taxes in general as personal taxes are pretty maxed out.

How will governments around the world raise incremental revenues = Enforcement of existing tax legislation.

The CRA is looking to get its hand on big data that shows every Canadian housing transaction in the USA.

Purpose – Failure to report and account for taxable income / benefits.

It’s all about using data to drive enforcement and the CRA Is addressing the lack of data.

We know that many Canadians have a place in the USA….

But 98% of employees have (considerably larger than a home in the USA) a cellphone.

What are the tax revenues for Canada associated with enforcing existing tax legislation on cellphones = Minimum CAD $1.6 billion.

We estimate in the USA it will be in excess of USD $16 billion annually.

You do the math for your country as Canada has 34m people and pre-covid a 65% labour force participation rate.

Without the data to separate business from personal the CRA and global tax authorities will tell you what they feel the # is, and you have to prove (with data/substantiation) why they are wrong.

Easy money sitting on the table for CRA and governments around the world especially in the G20 due to 98% of all employees using a smartphone & that the vast majority of usage is personal in nature.

CRA & Global Tax Authorities Increasing Enforcement Capabilities On Existing Tax Legislation