CRA announces that it will tighten the VDP criteria and review its guidelines for negotiated audit settlements

CRA has released the formal response of the federal government dated February 22, 2017 to the 14 recommendations of the House Standing Committee on Finance made on October 26, 2016. Although to some extent this was an exercise in deftly matching platitude with platitude (although even these may be valuable markers of an underlying shift in attitudes), some more specific comments include:

• Finance will consider whether the current reportable transactions legislation should be expanded.
• CRA’s review of the voluntary disclosures program, to be completed by March 31, 2017, “will result in some changes to tighten the criteria for acceptance into the program.”
• CRA will review its guidelines for negotiated audit settlements (which already require settlement “on a principled basis in accordance with legislation”).
• CRA is auditing 60 of the taxpayers identified through the Panama Papers.
• The 2017 Budget will include an update on Finance’s review of “tax expenditures” – and no, there was no mention of the ½ capital gains inclusion rate.
• The authors forgot to respond to the Committee’s recommendation that the federal government “expeditiously implement initiatives aimed at simplifying the income tax system.”

Neal Armstrong. Summary of 22 February 2017 Government Response to the Sixth Report of the Standing Committee on Finance entitled: The Canada Revenue Agency, Tax Avoidance and Tax Evasion: Recommended Actions under s. 220(3.1).