Sharing tax docs found during drug searches with CRA a 'common practice': police
London Community News
By Paul Everest/London Community News/Twitter: @PaulEverest
If you’re dabbling in illegal activities, you may not want to leave tax documents lying around your home just in case the police come knocking.
London police have admitted they frequently turn over financial and taxation information found during crime-related searches to the Canada Revenue Agency (CRA).
This information came to light in a judgment issued in July on a London man’s appeal against reassessments the CRA penalized him with for four years of undeclared income.
In October of 2007, London police executed a Controlled Drugs and Substances Act (CDSA) search warrant at the residence of Everton Brown due to allegations he was trafficking cocaine.
During the course of the search, in which, according to the judgment, police found a quantity of crack cocaine, investigators came across tax records and other documents belonging to Brown, which police shared with the CRA.
Const. Rafiq Bhabba of the London police testified, the judgment states, that “it was common practice for (London police) to turn over to the CRA information obtained on persons charged with trafficking or other illegal business activities.”
London police spokesman Const. Dennis Rivest said London police often does “work closely” with the CRA during drug trafficking and proceeds of crime investigations.
He added that when police do seize financial information documents during an investigation, officers “have a duty to safeguard a person’s rights.”
“There must be a judicial, or otherwise lawful authority for police to seize any type of evidence,” he said.
As a result of the document sharing, the CRA found Brown failed to declare more than $195,000 from 2004 to 2007 based on evidence of cash deposits and cash purchases and he was handed $24,159 in penalties.
Brown, however, claimed the deposits and purchases were from savings accumulated prior to 2004 as well as gifts from family and friends that were kept in private homes.
He also argued his privacy and rights under Section 8 of the Charter of Rights and Freedom, which protects against unreasonable search and seizure, were violated when London police handed over his tax documents to the CRA.
Brown said the warrant police used to enter his residence focused on an alleged offence under the CDSA for which he was not convicted and made no mention of sharing any information found during a search with the CRA.
And, he argued, since the tax documents mention other people, such as a woman he dated between 2003 and 2005, the seizure and sharing of the information resulted in rights violations for other individuals.
Justice Robert J. Hogan, in his judgment dated July 12, concluded that since it has been determined by the courts that no Charter violations took place in cases where CRA personnel have shared information discovered during an audit with police for the purposes of a criminal investigation, then police sharing tax documents discovered during a search “should be acceptable.”
He added due to the powers granted to the CRA under the Income Tax Act (ITA) regarding demanding and inspecting tax information, Brown could only expect a low level of privacy for his tax documents.
Hogan also said Brown’s argument about his drug-related charges being dropped “has no relevance to the question of whether Mr. Brown’s privacy interest in the documents was sufficiently high to render CRA inspection of the documents a violation of his Charter rights.”
He said the CRA’s use of its inspection and production powers is only inappropriate when the agency’s main purpose is criminal investigation rather than making sure a taxpayer is complying with the ITA.
“Here, there is no suggestion that the CRA auditor, in accepting the documents from the (London police), intended to carry out a criminal investigation,” Hogan wrote.
Finally, Hogan said only a person alleging his or her rights have been infringed can bring forth a challenge, so Brown’s concerns about the rights of other people being violated by the sharing of his documents are unfounded.
As for Brown’s defence of his undeclared income, Hogan found that Brown’s arguments and evidence was unreliable or lacked credibility and he concluded “a taxpayer must keep reliable books and records of all his income, including income from illegal sources.”
“If he does not, the Minister (of National Revenue) may issue a so-called arbitrary assessment using any method that is appropriate in the circumstances,” Hogan wrote in his decision. “In the absence of reliable books and records and plausible or reliable evidence from (Brown) or third parties, a deposit analysis based on (Brown’s) bank deposits is sufficient to uphold the reassessments.”
Hogan therefore dismissed Brown’s appeal.