The Budget provides for whistle blower payments when a person discloses information to the CRA that results in collected reassessments in excess of $100,000 where the reassessments relate to non-Canadian property or transactions. The reward payment is to be 15% of the tax collected.
While this program is no doubt based on similar programs from other countries aimed primarily at undisclosed offshore bank accounts, it may be applicable to some charitable donation tax shelters. Many charitable donation tax shelters involved property that was said to have been obtained from an offshore trust prior to being donated or that was said to have been ultimately used in some alleged non-Canadian charitable activity. To the extent that someone with inside knowledge of such a shelter is prepared to disclose shelter details to the CRA, it may be possible for that person to obtain very substantial whistle blower awards, given the large volume of reassessments in some donation shelters. However, experience in other countries suggests that tax officials are not always very keen on paying whistle blowers, particularly ones with involvement in offensive transactions. As a result, anyone contemplating tax whistle blower action should get specific legal advice.