CRA pays out fraudulent $5M tax refund: report

Court records claim a B.C. woman fraudulently claimed a refund on non-existent foreign income she claims came from "The United Nations"

Published Apr 16, 2026  •  Last updated 24 minutes ago  •  2 minute read

The Canada Revenue Agency.

Despite submitting a “bogus” return allegedly containing falsified information, Canada’s tax agency erroneously handed out a $5 million tax refund to a single person.

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That’s according to court records obtained by CBC’s The Fifth Estate, which shows the Canada Revenue Agency (CRA) gave the hefty $4,958,716.63 refund in May 2025 to a B.C. woman who allegedly only made $54,000 annually running her West Kootenay region hemp and grain processing business.

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“Upon review by the senior program officer at (refund examination headquarters,) it was determined (that one of the forms on file) was invalid, and the resulting $4.9-million refund from the erroneously allowed slip was unwarranted,” the CRA said in court document.

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Fraudulent $5M part of a bigger problem at CRA

This comes just months after CBC News uncovered a $4.9 million refund handed out in 2023 to a Quebec body shop that the government accused of falsely claiming payment of taxes on a large capital gain, despite no records existing of such a transaction.

The two payments are part of a larger problem at the CRA, accused of automatically paying out large tax refunds without conducting even basic checks.

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While the Quebec $4.9 million refund was just under CRA’s supposed threshold for triggering a manual review, court records show last May’s payment was indeed flagged for manual review, but nobody in the agency followed through.

According to court records, the woman is accused of falsely reporting $9,999,999 in foreign income during the 2023 tax year and claimed $5 million as an overpayment — but despite claiming she’d paid the exact same amount in income tax to the CRA, putting her in a situation where her tax rate was 100%, nobody in the CRA bothered to take a second look.

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Woman’s assets frozen, recovery process ongoing

A CRA affidavit in the court records show the agency realized the mistake two months after the $5 million cheque was cut, and noted no action was taken even after the problem was brought to human attention.

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Authorities now believe the woman paid no taxes at all that year, and that the nearly $10 million in foreign income she claimed — which she insisted came from “The United Nations” — never existed.

The CBC’s inquiries to the woman weren’t returned.

The CRA now determined she now owes the CRA $7.9 million — a figure that includes interest and penalties — and that authorities only managed to freeze $4.2 million of that amount.

An order was obtained in January to freeze the woman’s assets and efforts to recover the money are ongoing.

This payment came six months after former revenue minister Marie-Claude Bibeau and former CRA commissioner Bob Hamilton were dragged before the House Standing Ethics Committee to testify about previous bogus refunds issued by the agency.

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