Anyone who thinks a CRA prosecution will not happen to them needs to take off the rose-coloured glasses. Fact: CRA prosecutes people for tax evasion and is often successful obtaining convictions. On top of penalties and interest that CRA assesses when they determine that someone has evaded their taxes, if the matter is brought to court additional criminal fines and imprisonment can be result for the person or business owner who is convicted.
Let’s look at 2014. CRA prosecutions in 2014 have led to over 80 convictions in Canada with penalties ranging from fines to jail time. In addition to being tried and convicted – those who are convicted face the humiliation of having the details of the case broadcast on CRA’s website for all the world to view. Below are some examples.
In June, Allan Curle and Bruce Johnson, directors of Norall Group Contracting Inc. of Thunder Bay, were charged with tax evasion and sentenced to 14 months (Curle) and 10 months (Johnson) in jail, as well as a total fine of over $300,000. These fines represent 100% of the federal taxes each individual evaded, plus 50% of the cumulative total of federal income taxes evaded. These sentences came about after both failed to correctly file income taxes.
In July, Peter McCallion of Mississauga was convicted on fifteen counts of failing to file corporate, GST/HST and personal income tax returns. This resulted in fines of $1,000 per count, a total of $15,000, and McCallion was given 27 months to pay the fines.
If you know that you have undeclared income and CRA is not onto you yet – all of this can be avoided through the Voluntary Disclosure Program (VDP). Through a VDP application you can get to CRA before they get to you, they can accept the undisclosed information without prosecuting you or even charging you penalties. You have to act first so act fast. Tomorrow may be too late. Even one phone call from CRA can wipe out your VDP rights.
If the ball has already started rolling and CRA is asking questions, red alert! You need to get professional representation right away. This could be a ticking time bomb and every interaction directly with CRA can weaken your ability to defend yourself.
For more about protecting yourself and declaring undeclared income, please call Tax Solutions Canada today at 1-888-868-1400.