Tax Tip:  Foreign Reporting

Recently, CRA began sending letters to some Canadians strongly suggesting that they review their income tax filing to ensure that any foreign income and gains have been properly reported and that proper Forms have been filed.

The letter is signed by the Manager of the CRA Offshore Compliance Section (OCS). It was recently noted by a large Law Firm in Canada that these letters are being sent to individuals identified as being “high risk” for noncompliance in respect of reporting foreign assets or income. The letter notes the potential for gross negligence penalties, and even criminal prosecution, where offshore assets or income are not reported and suggests using the Voluntary Disclosure process to avoid criminal charges or civil penalties.

Action Item: Call us if you receive one of these letters.