Criminal Tax Evasion Questions
Tax evasion is a very serious issue. Every year, thousands are prosecuted by the CRA. Farber Tax Solutions can help protect you against such a outcome.
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Is owing money to CRA tax evasion?
Tax evasion is the willful attempt to suppress or not disclose income that is required to be reported. Owing money to the CRA is not tax evasion. Some Canadians fall behind on their tax obligations and as a result cannot pay back tax arrears immediately. In such situations, the CRA can negotiate a payment arrangement, although it may do so reluctantly.
Is filing a late tax return tax evasion
Tax evasion is the willful attempt to suppress or not disclose income that is required to be reported. Late filing a tax return could be characterized by the CRA as an attempt to avoid disclosing income and an attempt at evading taxes.
Is making a mistake on a tax return tax evasion?
Tax evasion is the willful attempt to suppress or not disclose income that is required to be reported. A mistake on a tax return is not necessarily tax evasion, although the CRA may attempt to characterize the mistake as willful and an attempt at evading taxes.
What is tax evasion?
Tax evasion is the willful attempt to suppress or not disclose income that is required to be reported. Ordinarily, tax evasion involves one or more of the following:
- Not filing a tax return;
- Filing a tax return but willfully excluding income;
- Filing a tax return but willfully misrepresenting the nature or amount of income;
- Arranging for the receipt of income in a way that hides it from the CRA and willfully excluding that income in a tax return (i.e. earning income in cash which the taxpayer believes is untraceable); and/or
- Characterizing a transaction in a manner so as to disguise the real object or benefit of the transaction (i.e. recording an expense which has not been incurred).
Does tax evasion really lead to criminal prosecution?
All too often individuals and businesses, in attempting to avoid a tax debt, will turn a financial problem into a legal one. Tax evasion is a crime. While all evidence of tax evasion is pursued, the CRA’s Criminal Investigations Program (CIP) is specifically dedicated to ensuring that significant cases of tax evasion are investigated and, where appropriate, referred to the Public Prosecution Service of Canada for criminal prosecution.
The CIP focuses on the most egregious cases that meet one or more of the following priorities:
- Significant and/or material cases of tax evasion with an international element;
- Promoters of sophisticated tax schemes aimed at defrauding the government;
- Financial crime cases investigated jointly with the Royal Canadian Mounted Police and other domestic or international law enforcement partners; and
- Significant and/or material cases involving income tax and/or GST/HST tax evasion, including the underground economy.
Under the Income Tax Act and the Excise Tax Act, persons convicted of tax evasion can face fines ranging from 50% to 200% of the taxes evaded and up to two years imprisonment. Further, upon conviction on an indictment, a fine ranging from 100% to 200% of evaded taxes and up to five years in imprisonment can be imposed.
If convicted of fraud under Section 380 of the Criminal Code of Canada, an individual can face up to 14 years in jail.
Court convictions are publicized in local, regional and national media to communicate the consequences of fraud committed against the Canadian public and to maximize the deterrent effect of these convictions.
If you are at risk of or currently in the midst of a criminal investigation, contact Farber Tax Solutions immediately. Our experienced ex-CRA and legal professionals will help guide you through the process of a criminal investigation, advising you each step of the way.
Farber Tax Solutions can help you successfully deal with CRA problems. We utilize the experience of our tax experts to:
- 1| Offer a comprehensive solution that is focused on achieving the most favourable possible outcome for your tax issue;
- 2| Communicate with the CRA on your behalf and navigate the entire CRA dispute process; and
- 3| Offer a complete solution to your tax problems, including ex-CRA professionals and tax lawyers from Farber Tax Law.
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