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canadian flag Our neighbors to the north have their own version of the IRS, called the “Canada Revenue Agency” (CRA). Recently, a news item came to my attention that may not have an immediate impact on US taxpayers but should be a warning sign that immoral behavior by revenue agency officials can happen anywhere!

The CRA, which is staffed by 40,000 people and serves a similar function to the IRS, recently uncovered a shocking number of cases in which CRA employees used government information inappropriately: It seems that sometimes they snooped on spouses or friends and other times they accessed income tax data to give their family and friends preferable tax treatment. In fact, the article reported that in one office alone 13 employees accessed tax records and confidential information inappropriately, with 10 of them providing preferential treatment to people.

(Read the article here)

What does that mean for Americans?

There are about 120,000 IRS employees. If it can happen in Canada’s CRA with only one-third of staff that the IRS has, it can certainly happen in the IRS. In fact, I’d suggest that the size of our highly bureaucratic system could make it even more susceptible to such nefarious usage simply because the bigger things are, the more complex they tend to be.

So, while you might be suffering with a tax problem and hopeful of a resolution, you need to wonder if those exact same people that are knocking on your door demanding money are not also extending preferential treatment to their friends and family!

Even the current Treasury Secretary Timothy Geithner admitted to tax problems due to “irregularities” in past 1040 tax returns.

We can only hope that periodic tax audits and careful watchdogging will keep this from happening… but we can never be completely sure. The IRS is the largest collection agency in the world, and they have nearly unlimited power to enforce tax collection.

[image credit: scazon]

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