Penalties for Tax Evasion
Information on CRA penalties for not reporting income and tax evasion penalties
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Tax Evasion Penalties Canada
Tax evasion is a crime in Canada. The CRA can levy tax evasion charges if it believes that willful attempts to avoid paying taxes have been made by an individual or company. Federal tax evasion charges are very serious. In addition to requiring that the outstanding tax debt be paid, the CRA can also charge significant interest charges and penalties. In addition, offenders may also face up to five years in prison if found guilty of tax evasion.
Due to the incredible severity of tax evasion charges, it is crucial that you have an experienced lawyer whose sole focus is tax law on your side. When you work with the team at Farber Tax Solutions, we offer a comprehensive tax solution. Our team will:
- Examine your tax situation, interpret CRA actions, and determine the best course of action to proceed
- Ensure that your rights are always protected and respected
- Offer you a free consultation where you can speak with one of our tax experts about your situation
Contact us today to schedule a consultation with a member of our team. Farber Tax Solutions offers comprehensive tax solutions by our team of ex-CRA, legal, and accounting professionals. We have a proven history of successfully resolving tax problems.
What is Tax Evasion?
Tax evasion is a crime that occurs when an individual or organization willfully ignores Canadian tax law by falsifying records and claims, not reporting income, or inflating expenses, in an attempt to evade taxes. One important aspect to remember is that tax evasion must be done on purpose.
If you made an error on your tax return (such as not entering a number correctly or placing information in the wrong location on a form, for example) this is not typically considered tax evasion. However, it is the CRA that determines if your error was willful. Therefore, it is important to have an experienced professional on your side when dealing with a potential tax evasion situation.
CRA Penalties for Tax Evasion
The CRA penalty for not reporting income or evading taxes is the full amount of any taxes owing, plus interest and penalties assessed by the CRA. If a taxpayer is convicted of tax evasion, the court may fine the individual up to 200% of the taxes evaded. Potential for prison time of up to five years is also a possibility.
Even if you are able to avoid prison, being convicted of tax evasion can lead to a criminal record, which can complicate many aspects of your life, and irreparably harm your personal reputation and that of your business.
That’s why it is so crucial that you work with experienced professionals who understand how to best defend against tax evasion charges.
How Farber Tax Solutions Assists in Tax Evasion Cases
If you have not correctly reported income on prior year returns, you may be able to voluntarily come forward and do so without penalty. This is due to the CRA Voluntary Disclosure Program, which is designed to provide a second chance to correct prior year returns and file returns that have not been filed.
If you are accepted to this program, the CRA may waive penalties and interest charges against you. However, you will need to come forward before the CRA contacts you regarding your tax situation.
Farber Tax Solutions can help you apply for the VDP, giving you the best chance of being accepted into the program. Please contact us to arrange for a free consultation to discuss your tax problem.
If the CRA believes that you willfully committed tax evasion, then our team of experienced tax litigators can represent you before the CRA and at all levels of court, including the Tax Court of Canada and the Federal Court of Appeals. Working with our firm also provides you with lawyer-client privilege, freeing you to discuss all aspects of your tax matter confidentially.
Farber Tax Solutions Helps You at Every Step of the Way including:
- 1| Organizing: We analyze all documents and communication, to fight the CRA on your behalf
- 2| Audits: We assist you with audits and ensure proper conduct by tax authorities
- 3| Appeals: We can prepare a Notice of Objection, clarifying your standing with the CRA
- 4| Litigation: We represent you at all levels of court
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