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Tax

Breaches of confidentiality expose taxpayers to damages

News that most of the privacy breaches reported by the Canada Revenue Agency (CRA) in 2014 were committed by the agency’s employees highlights the need for tougher sanctions against those responsible, says Toronto tax litigation lawyer David J. Rotfleisch.

CBC News recently obtained data under the Access to Information Act that details every “material” breach reported to the federal privacy commissioner in 2014. As the media outlet reports, of the 34 significant privacy breaches reported by the CRA, all but two were “deliberately committed” by the agency's employees. Files also show that law enforcement was not notified and no employees were terminated in these cases, says the CBC.

Among the incidents disclosed in the report were an accidental release of taxpayer information to a media outlet, as well as two breaches at the CRA's London, Ont. office “where workers snooped into the files of 169 and 170 taxpayers."

In comparison, the article notes that the CRA reported only seven privacy breaches in 2011.

The CRA manages one of the country's largest confidential databanks, and tens of thousands of employees have access to files, says CBC.

As such, says Rotfleisch, founding tax lawyer at Rotfleisch & Samulovitch Professional Corporation, the agency has a duty to keep taxpayer data confidential.

“A breach of that duty exposes taxpayers to damages,” he tells AdvocateDaily.com.

As a CRA spokesperson says in the article, the agency has strengthened its disciplinary measures to combat breaches, up to and including termination. 

But, Rotfleisch explains, “deliberate misconduct by employees should result in severe sanctions against employees, and that does not appear to be happening.”

“Taxpayers who have suffered damages through a deliberate or accidental data breach have a cause of action against the CRA and should consider suing,” he adds.

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