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Tax

Tax record 'snooping' undermines confidence in system

Although the privacy of tax records is guaranteed by law, recent reports that claim the Canada Revenue Agency (CRA) was unable to prevent several employees from improperly accessing files undermines taxpayers' confidence in the integrity of the system, Canadian tax lawyer David J. Rotfleisch tells AdvocateDaily.com.

CBC News reports that it uncovered nine significant cases last year where CRA employees allegedly extracted “sensitive private information about income, deductions, benefits, payments and employment” from government electronic records.

CBC says the CRA manages one of the biggest confidential databases in Canada, and about two-thirds of its 40,000 workers have electronic access.

As the article notes, Canada’s privacy commissioner previously exposed this problem at the agency in 2009 and in 2013 and the CRA has spent $10.5 million since 2013 “to make its computers more secure against its own workers.” CBC reports the CRA says it fired eight of the nine workers caught last year and says its systems are strong and tight controls are in place, which are continually being assessed and improved.

However, says Rotfleisch, founding tax lawyer at Rotfleisch & Samulovitch Professional Corporation, “The ongoing inability of the CRA to prevent unauthorized snooping of taxpayer files undermines the confidence of Canadians in the integrity of the tax service. There have also been data breaches in the past due to CRA employees losing data records."

For example, CBC notes, the so-called ‘Heartbleed’ computer vulnerability in April 2014 allowed a hacker to access as many as 900 social insurance numbers. Also in 2014, a CD containing confidential taxpayer information was sent to CBC News as a result of a mailroom mix-up, says the article.

“Taxpayers who have been affected by improper or negligent activities of the CRA may have grounds to sue civilly seeking damages for negligence,” says Rotfleisch.

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