Targeted by the taxman: Why the CRA is playing tough with small business

The MGM Restaurant in Nanaimo, B.C., has always been a bit like a community centre. It hosts dance lessons, Wednesday night chess, even stamp-collector meetings. The city’s emergency response workers – paramedics, firefighters and local RCMP – used to have their own standing reservation in a separate section. But they stopped coming in soon after federal tax auditors made a bombshell allegation.

The Canada Revenue Agency began poring through the MGM’s books in 2006 and became convinced that owner-operators Tony and Helen Samaroo were tax cheats of the highest order. The agency accused them of skimming $1.7-million over a two-year period, resulting in 21 criminal tax-evasion charges in 2008. The Samaroos faced serious prison time and financial ruin.

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Many individual taxpayers, accountants, tax lawyers and former CRA employees describe the

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