The RCMP has completed a 6-year investigation into an alleged fraud scheme at the CRA by laying 142 charges against 8 former CRA officials and 7 businessmen. Launched in 2008, the investigation looked into allegations that senior CRA auditors received bribes to turn a blind eye to millions of dollars in unpaid taxes and fraudulent tax credit claims.
According to the last round of charges, 3 CRA auditors (Americo Comparelli, Adriano Furgiuele and Antonio Girardi) were phantom shareholders in a firm called Delvex, that assisted firms apply for tax credits, including fraudulent SR&ED tax credit claims. Delvex is alleged to have collected a quarter of the total value of the SR&ED claims that were submitted.
The RCMP also announced that they have laid charges against former CRA officials Adriano Furgiuele and Nicola Iammarrone in relation to an alleged bribe from businessman Francesco Bertucci. According to the RCMP statement, Mr. Bertucci allegedly evaded payment of more than $2-million in federal taxes in relation to a business investment loss after securing the co-operation of the former CRA officials.
Revenue Minister Kerry-Lynne Findlay said in a statement that the government will hold CRA officials to the “highest ethical standards.”
Posted in SR&ED News
In a recent article in the Financial Post, Julie Bond, a SR&ED tax consultant, opined that the recommendation in the Jenkins Report to reduce the refundability of SR&ED tax credits and to move towards a grants-based system will stifle innovation for Small to Medium-sized Enterprises (SMEs).
“Grants are not practical. With grants, you would have small and medium-sized companies stop a project, write a business plan, send it in to a bureaucratic organization, wait three months for a response, and if they’re approved, then go back to and finish the project,” Ms. Bond says. “By that time, they’ve lost the job.”
According to Corinne Pohlmann, Vice-President of National Affairs at CFIB, small businesses were not represented on the Jenkins panel. The CFIB recently sent a letter to Finance Minister Jim Flaherty to make their views from a SME perspective known.
While there was very little mention of the SR&ED program in the latest 2014 federal budget, the federal government announced that it will be investing $1.5 billion over the next 10 years through the Canada First Research Excellence Fund, to fund research at post-secondary institutions.
No additional legislative changes were announced pertaining to the SR&ED program for this fiscal year.
Select first-time SR&ED claimants will receive a free in-person First-Time Claimant Advisory Service (FTCAS) that provides an opportunity to meet with local CRA SR&ED staff at the claimant’s place of business. During these visits, CRA staff will provide claimants with advice on how to:
- Identify potential eligible work in the context of their business;
- Identify allowable expenditures;
- Gather documentation and other evidence to support a claim; and
- Complete and file SR&ED claims.
SR&ED claimants selected to receive the FTCAS will be notified by letter from their local CRA office. A CRA official will then arrange a convenient time for the visit, which will take no more than half a day.
Posted in SR&ED News
Excellence in Manufacturing Consortium, Canada’s largest manufacturing consortium, is hosting a Strategic Interest Group event on January the 23rd, 2014 (9am) at Russell Industries Corporation. Jeff Mitobe, from NorthBridge Consultants, will be providing general details about the SR&ED program as well as recent Canada Revenue Agency changes that have come into effect as of January 2014. NorthBridge will also be providing a general review of government funding programs that are applicable to manufacturing companies.
Date January 23, 2014
Russell Industries Corporation
20 Grote Street
St. Catherines, ON