According to a recently released Canada Revenue Agency (CRA) report, Canadian individuals who file their income-tax returns electronically are more likely to 'cheat' by underestimating the amount of taxes they owe.
The Canadian Press Agency reported this week that a specialist group of analysts working for the CRA uncovered the phenomenon after they studied a selection of internet returns at random for the 2005 tax year.
Shockingly, the analysts found that aroud 15% of these electronic submissions were 'non-compliant' - and had subsequently cost the government approximately USD569mn in unpaid taxes.
According to the report, the Netfile filing system, which does not require physical proof of revenue (such as receipts), was found to make it easier for the taxpayers in question to underestimate the amount of tax they owed.
"The participants demonstrated a perception that not having to attach receipts to the return creates a temptation for electronic filers to overstate their claims for deductions and credits," says the document dated in September and obtained by The Canadian Press under the Access to Information Act, which also stated:
"They believed they would not be caught as long as the overstatements were relatively small."
Those who had sent in paper returns - which do require physical evidence - were more likely to have fully complied with the tax laws, according to the CRA's findings.
However, Cleo Hamel, a senior tax analyst with H&R Block, has stepped up to defend those who have been accused of cheating. Speaking on Monday to CTV.ca, she observed that:
"They are not necessarily cheating."
"The underestimating part could be more forgetting or not adding things up properly or maybe they're not sure they have all their information."
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