Vancouver Sun - CRA won't collect FBAR penalties

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The Vancouver Sun's Don Cayo, who has been following the FBAR issue, posted a Finance Department e-mail to his blog just now saying that the CRA won't collect non-reporting penalties under FBAR. I can't get the link to work, but Google "Verbatim: What Canada says about collecting IRS non-filing penalties"

[quote]The Canada-United States Income Tax Convention contains such a reciprocal provision, which allows for the collection by a country of taxes imposed by the other country, including civil penalties. The provision applies to all categories of taxes collected, and to contributions to social security and employment insurance premiums levied, by or on behalf of the governments of the respective parties. This means that the provision does not apply to penalties imposed pursuant to laws that impose only a reporting requirement (as opposed to those that impose taxation along with reporting [b]requirements[/b]).

Thus, penalties imposed under the U.S. Bank Secrecy Act for failure to file Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, commonly known as “Foreign Bank Account Reportâ€￾, or “FBARâ€￾) are not covered by the above provision of the Canada-U.S. Income Tax Convention and would not be collected by the CRA.[/quote]

The links at the bottom of the column are also worth following.