IRS, Canada Revenue Agency Unravel Cross-Border Tax Scheme

WASHINGTON — Officials of the Canada Revenue Agency and the United States Internal Revenue Service today announced significant progress in unraveling an abusive cross-border tax scheme. This effort stems from leads and information first developed by the Joint International Tax Shelter Information Centre (JITSIC).

The scheme involves hundreds of taxpayers and tens of millions of dollars in improper deductions and unreported income from retirement account withdrawals. U.S. and Canadian promoters have been marketing the scheme on both sides of the border to individual investors, ranging from middle to high-income individuals.

Leaders of the IRS and CRA said the collaborative effort reflects the progress being taken by JITSIC in the complex task of tracking international tax schemes and shelters involving individuals and corporations.

CRA Commissioner Michel Dorais said, “Tax administrations in many parts of the world are working together to detect and shut down abusive tax schemes. Promoters who believe they can play one country against another in developing tax schemes should beware.”

“The real time exchange of information, including the identities of promoters and hundreds of investors has been critical to this investigation,” said IRS Commissioner Mark W. Everson. “JITSIC is emerging as an important part of efforts to combat abusive schemes.” Read more at irs.gov