IRS, CANADA FIGHT BORDER TAX SCHEMEWASHINGTON - Officials of the Canada Revenue Agency and the U.S. Internal Revenue Service announced progress in unraveling an abusive cross-border tax scheme. The scheme - involving hundreds of taxpayers and tens of millions of dollars in improper deductions and unreported income from retirement account withdrawals - was unearthed through leads developed through the agencies' Joint International Tax Shelter Information Centre.
Promoters from both countries have reportedly been marketing the scheme to individual investors. Middle- to high-income individuals purchased what appear to be high-yield offshore investments through offshore corporations and foreign bank accounts, usually using cash or proceeds from withdrawals, allegedly tax free, of retirement funds. Investors also make purchases using tax refunds improperly generated by alleged losses claimed for natural resource industry investments.
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