Taxes paid benefit all Canadians
The quality of life that all Canadians enjoy is supported by the taxes all Canadians pay, which help to fund programs and services such as health care, childcare, education, and infrastructure projects that benefit all Canadians. When someone is evading paying their share, it erodes the resources available for all.
Tax evasion and tax fraud include:
- falsifying records and claims;
- not reporting income;
- inflating expenses;
- claiming a fraudulent refund or benefit;
- refusal to pay taxes in protest;
- participation in tax schemes.
The CRA has set up a free subscription service to increase Canadian taxpayers’ awareness of enforcement actions and warn them about potential tax schemes, which include information on:
- the execution of searches;
- the laying of criminal charges;
- convictions; and
- sentencing.
The CRA’s general advice in regard to participation in the tax schemes is to be reasonable – “if it sounds too good to be true, it probably is”.
Tax evasion is an offence
Tax evasion is an offence under section 239 of the Income Tax Act and section 327 of the Excise Tax Act. Tax fraud is an offence under section 380 of the Criminal Code. Tax evasion and tax fraud offences involve using deceit, falsehoods and any other fraudulent means to defraud a person or the public of money or anything else of value.
Audit and Criminal Investigation
The Canada Revenue Agency’s (the “CRA”) conducts audits and criminal investigations.
An audit is the verification of information provided by taxpayers to the CRA. When an audit is conducted, it is to determine a tax liability, and taxpayers may be ordered to pay sums of money to the Receiver General for Canada to correct their tax affairs. Audits are a civil matter, and they relate to possible tax avoidance, which is different from tax evasion and is not an offence.
In a criminal investigation, the CRA investigators gather evidence to determine whether there has been tax evasion, tax fraud and/or other serious violations of tax laws. Once investigations have been carried out, the CRA recommend cases to the Public Prosecution Service of Canada (the “PPSC”) for possible criminal prosecution. The PPSC will evaluate whether the laying of a charge is in the public interest, and whether there is a high likelihood of a conviction.
uring the prosecution stage, the Crown has to show that a taxpayer wilfully contravened Canadian tax laws in order to evade taxes. The Crown case must meet the beyond a reasonable doubt standard to secure a conviction; if convicted of tax evasion and/or tax fraud, a taxpayer may face court-ordered fines and/or imprisonment.
CRA publishes statistics of its Criminal Investigations Program and from April 1, 2019, to March 31, 2024, there were:
- 135 convictions
- $25.1M in court-imposed fines
- More than 108 total years in jail for 58 individuals
- Over $44Min federal tax evaded
Consequences
Whether it is cheating on personal or corporate taxes, or hiding assets or money in foreign jurisdictions, the consequences are serious.
Conviction of tax evasion involves:
- Payment of the full amount of taxes owing, plus interest and any civil penalties;
- Fines of up to 200% of the taxes evaded;
- A jail term of up to five years.
Conviction of tax fraud carries a sentence of up to 14 years in prison. Other consequences include fingerprinting and foreign-travel restrictions.
Why Choose Granville Law Group?
- Expertise: Our legal team possesses extensive experience in resolving CRA disputes, ensuring compliance and minimizing potential penalties.
- Client-Centric Approach: We prioritize your understanding and involvement, empowering you to make decisions that best protect your interests.
- Proven Strategies: Our integrated legal solutions address the multifaceted nature of tax disputes, considering all aspects of your personal or corporate tax situation.
Take Control of Your Tax Matters Today!
Whether you’re facing a personal or corporate audit, or require assistance in responding to CRA inquiries, proactive legal support is crucial. Contact tax lawyer Alina V. Nikolaeva today at avn@granvillelaw.com to discuss your case and take control of your financial future.
- Address: 850 W Hastings St Suite 911, Vancouver, BC V6C 3J1
- Website: https://granvillelaw.com/cra-disputes/
Secure your peace of mind with expert legal guidance—reach out to Granville Law Group today!
