By David Rotfleisch

Rotfleisch & Samulovitch Professional Corporation

Special to the Financial Independence Hub 

Imagine dad dies. The widow and children miss him terribly, but he made good money and they’ll be taken care of financially. What they don’t realize is that dad left them “black money.” He kept most of his money in a secret offshore bank account — black money  —unreported to Canada Revenue Agency (CRA). He also left his heirs a big problem.

Governments and tax collectors around the world have come down hard on the banks that harbour secret accounts. The crackdown came after the terrorist attacks of September 11, 2001, as terrorist cells need financing and want to remain under the radar. That got the ball rolling worldwide. As well, governments began cracking down on money laundering from the proceeds of crime (drugs, guns, human trafficking, exotic animal parts smuggling, and so on).

A True Story

This is a true story, with the details changed a bit to protect the heirs from embarrassment. The widow called my firm, distraught and I was able to provide some comfort. It’s good news that the money is not lost forever. But it will take a while to get it back to Canada, and the family will have a Canada Revenue Agency tax bill to pay.

The best news is mom and the kids have no fear of going to jail for tax evasion. They can sleep at night.

At my firm, 2015 started with a call from a Canadian businessman who spends part of his time outside Canada.  He was given bad advice years ago by his Canadian stock broker to set up an offshore account. Now the offshore broker is getting out of business, has sold the portfolio and wired funds back to the businessman.  But the offshore portfolio was never reported to CRA. The businessman recognizes his obligations, and we are doing voluntary disclosure to bring him onside, once again ending fear of criminal charges. Continue Reading…