The Canada Customs and Revenue Agency has released an information circular detailing how the CCRA can take action against individuals who counsel others to file false or misleading tax returns.

The guidelines also cover advisors who turn a blind eye to false information provided by their clients for tax purposes. The information circular is posted on the CCRA Web site.

In January, the CCRA released draft guidelines on third-party penalties for public comments. The information circular was amended to reflect those comments and it now also contains guidelines and processes for applying the third-party civil penalties.

Until the third-party civil penalties came into force on June 29, 2000, no civil penalty existed to deter false and misleading third-party advice. Only taxpayers who acted on false and misleading advice could be penalized.

The civil penalties associated with the guidelines issued today address non-compliance and will deter third parties from making false statements or omissions about income tax or GST/HST matters.

CCRA says it is committed to applying the penalties fairly, consistently, and only when clearly justified.