Misconduct & Mistakes by CRA Employees: What Canadian Taxpayers Need to Know

Key Insights from the CRA’s 2024–2025 Report on Accountability, Privacy, and Public Trust

The Canada Revenue Agency plays a critical role in administering Canada’s tax system, collecting public revenues, and protecting confidential taxpayer information. Given the breadth of this responsibility, public trust in the CRA rests not only on its statutory authority, but also on the integrity, professionalism, and accountability of its employees.

The CRA’s 2024–2025 Annual Report on Employee Misconduct and Wrongdoing outlines how the Agency detects, investigates, and responds to internal misconduct and mistakes against taxpayers. For taxpayers, business owners, and professionals—especially those involved in audits, assessments, objections, or tax litigation—the report provides valuable insight into how the CRA manages internal compliance issues while continuing to enforce Canada’s tax laws.

CRA Employee Misconduct and Wrongdoing Explained

The CRA draws a clear distinction between employee misconduct and wrongdoing, each governed by separate legal and administrative regimes.

Employee misconduct generally encompasses acts or omissions that violate CRA policies, employment duties, or the CRA Code of Integrity and Professional Conduct. This includes conduct such as unauthorized access to taxpayer information, improper handling of confidential data, misuse of CRA resources, timekeeping violations, or behaviour inconsistent with a respectful workplace. By contrast, wrongdoing—as defined under the Public Servants Disclosure Protection Act—covers more serious matters, including breaches of federal law, misuse of public funds, gross mismanagement, or conduct that poses a significant risk to health, safety, or the environment.

For the 2024–2025 fiscal year, the CRA reported no substantiated cases of wrongdoing resulting in disciplinary action, while identifying a substantial number of founded misconduct cases.

Notable Findings from the CRA’s 2024–2025 Misconduct Review

The CRA reported hundreds of substantiated misconduct cases across Canada, leading to disciplinary actions ranging from written reprimands to suspensions and terminations. Suspensions were the most frequently imposed sanction, followed by reprimands and disciplinary dismissals.

A significant share of these cases involved privacy-related breaches, particularly unauthorized access to taxpayer accounts. In serious instances, affected taxpayers were notified directly, underscoring the CRA’s statutory duty to safeguard confidential taxpayer information.

From a governance perspective, the CRA noted that the rise in reported cases reflects stronger internal controls, enhanced detection processes, and increased transparency, rather than a widespread erosion of employee integrity.

Unauthorized Access and Privacy Violations Involving Taxpayer Information

Breaches involving the protection of taxpayer information accounted for the largest share of misconduct cases. These incidents included employees accessing their own tax files or those of other individuals without authorization, improperly transmitting sensitive information, and failing to comply with secure workstation requirements.

For taxpayers in Ontario and across Canada, these findings reinforce the importance of the CRA’s privacy safeguards and demonstrate that unauthorized access is treated as a serious internal matter. They also serve as a reminder that individuals involved in audits, assessments, or tax litigation should remain mindful of how their personal and financial information is accessed and managed.

CRA Oversight: Investigations, Discipline, and Internal Controls

Allegations of employee misconduct are addressed through a combination of internal investigations, management oversight, and labour relations procedures. Employees are guaranteed procedural fairness, including the right to file grievances under applicable collective agreements.

These internal disciplinary mechanisms operate separately from taxpayer-facing enforcement actions. While employee misconduct may highlight governance issues, it does not, on its own, affect the validity of a tax audit, assessment, or reassessment.

Criminal Prosecutions Involving CRA Employees: Findings from the Public Record

While the CRA’s annual misconduct report primarily addresses internal discipline, certain instances of employee misconduct can, in rare cases, result in criminal prosecution. Such prosecutions fall outside the CRA’s internal employment framework and are pursued by law enforcement when conduct meets the criteria for offences under the Criminal Code or the Income Tax Act.

Public records show that former CRA employees have faced charges, and in some cases convictions, where misconduct involved fraud against the Crown, breach of trust by a public officer, or unauthorized use of CRA computer systems. A notable recent case involved a former CRA employee during the administration of COVID-19 emergency benefits, charged by the RCMP for allegedly fraudulently obtaining benefits using privileged access. Charges included fraud, breach of trust, unauthorized computer use, and violations related to confidential taxpayer information under the Income Tax Act.

There are also historical instances where former CRA employees were convicted after accessing taxpayer accounts without authorization and facilitating improper refunds. These examples illustrate that, although criminal prosecutions are uncommon, they occur when misconduct involves deliberate deception, misuse of confidential data, or significant financial harm.

The distinction is important: internal disciplinary action addresses employment-related misconduct, whereas criminal prosecution addresses violations of criminal or federal tax law. When conduct meets the threshold for criminality, the matter is referred to law enforcement and proceeds independently through the justice system.

Tax Pro Tips

• Taxpayers should not assume that misconduct by CRA employees, or any resulting prosecutions, automatically impacts the validity of a tax audit or assessment. Challenges must be based on substantive provisions of tax law and procedural fairness, rather than internal employment outcomes.
• When concerns arise regarding improper CRA conduct that could influence your file, early legal advice can help determine whether options such as access-to-information requests, administrative complaints, or procedural arguments are appropriate.
• In disputed matters, including objections, appeals, and tax litigation, the primary focus should remain on statutory compliance, evidentiary requirements, and relevant case law, including Supreme Court of Canada guidance such as Jarvis, which clarifies the distinction between civil tax proceedings and criminal investigations.

FAQs (Frequently Asked Questions): Criminal Prosecutions of CRA Employees and Tax Disputes

Can a CRA employee’s criminal charges or conviction invalidate a taxpayer’s audit or assessment?

No. The prosecution or conviction of a CRA employee does not, by itself, nullify a tax audit, assessment, or reassessment. Each case is evaluated independently based on its legal and factual circumstances.

Can employee misconduct be used to contest a reassessment?

Only in rare situations. To succeed, you would need to show that the misconduct had a direct impact on procedural fairness, the collection of evidence, or compliance with statutory requirements in your particular file.

Does employee misconduct or criminal prosecution halt ongoing CRA enforcement actions?

No. CRA enforcement, including audits, collections, or assessments, proceeds independently of internal disciplinary or criminal proceedings, unless a court specifically intervenes.

Can employee misconduct be used in tax litigation?

Potentially, but only if there is a clear link between the misconduct and the fairness or integrity of the taxpayer’s case. Courts prioritize statutory rules, evidentiary standards, and procedural fairness over internal CRA disciplinary actions.

Will the CRA inform taxpayers if their information is compromised in a breach?

Yes. Under CRA policy, taxpayers affected by significant privacy breaches are notified directly.

Key Takeaways

The CRA’s 2024–2025 Annual Report on Employee Misconduct and Wrongdoing underscores the Agency’s ongoing commitment to transparency, accountability, and maintaining public confidence in Canada’s tax system. While most cases of misconduct are managed through internal disciplinary measures, occasional criminal prosecutions highlight that abuse of authority or misuse of taxpayer information can carry serious legal consequences.

For taxpayers, business owners, and professionals involved in audits, assessments, objections, or tax litigation, the key point is clear: internal CRA misconduct or employee prosecutions do not automatically affect the legal validity of tax enforcement actions, which are assessed independently based on the applicable law and facts.

Disclaimer: This article is intended for general informational purposes only and reflects the law as of the date of posting. It has not been updated and may no longer be current. The content does not constitute legal advice and should not be relied upon as such. Each tax situation is unique and may differ from the examples discussed. You should consult a qualified Canadian tax lawyer for advice tailored to your circumstances.