The Canada Revenue Agency is investigating allegations that auditors at its Montreal offices sought kickbacks from companies in exchange for reducing their tax bills, sources said.
According to information obtained by The Globe and Mail and Radio-Canada, the CRA has obtained evidence that auditors approached companies directly, and offered them beneficial treatment. The auditors allegedly closed files for a fraction of the maximum potential tax bill, or promised that the files would get stuck in administrative limbo.
The CRA is mired in one of the biggest scandals in its history, having suspended or fired at least nine officials. It has also called in the RCMP to probe potential criminal wrongdoing by its former employees, including allegations that two CRA auditors and a businessman placed $1.7-million in a bank account in the Bahamas.
Investigators are now interviewing businesspeople who settled with the CRA in recent years on favourable terms, looking for people who had been solicited for a kickback.
"It was a fairly widespread practice," one investigator told The Globe. "We're looking into the fact that auditors went to see business owners and offered to settle their tax bill under the table."
In an interview with Radio-Canada, a source close to the CRA's auditing unit said the agency's problems go back more than a decade, with many auditors "having witnessed acts that lead them to believe there was corruption within the Canada Revenue Agency."
The source, whose identity is shielded in the television interview, said CRA investigators were brought in from Ottawa to probe the situation in Montreal, where "anomalies" were found in a number of files.
The source said investigators discovered evidence of botched audits, as well as dozens of delicate files stored in filing cabinets where they were basically outside of the auditing process.
In addition, the source said officials at the CRA grew concerned at the deal-making involving auditors who settled tax bills for "minimal amounts." He lamented the fact it took an anonymous denunciation from an outsider to launch the current wave of investigations.
The situation could lead "society as a whole to lose confidence in the organization that collects the money that provides services to the population." He added: "This absolutely has to stop."
The government has provided little information on recent developments in its investigation, beyond saying that it takes the matter seriously and will deal with its employees in an appropriate manner.
"Any misconduct by CRA employees as alleged in these cases will not be tolerated. Our government is supportive of this investigation and will ensure that the CRA co-operates with all investigations," a spokeswoman for Revenue Minister Keith Ashfield said.
Former revenue minister Jean-Pierre Blackburn attended an unusual news conference in Montreal in 2009 in which the CRA laid out a tax-avoidance scheme involving shell companies that allegedly benefited from the help of agency insiders.
No charges have been laid against former CRA employees, and none of the allegations against them have been proven in court.
Still, the agency has obtained guilty pleas in tax evasion cases involving three Montreal-based construction firms that benefited from the alleged help of CRA auditors to bring down their tax bills with the use of fake invoices. Two of the companies that pleaded guilty were administered at the time of the infractions by Antonio Accurso, a major player in the Quebec construction industry.
The owner of the third company involved in tax evasion, Frank Bruno of B.T. Céramique, allegedly held a bank account containing $1.7-million in the Bahamas with two CRA auditors, one of whom is his cousin.