The tax deadline is behind us, and even though you may have filed your returns online, there is always a chance that you incorrectly claimed expenses or miscalculated earnings. These can be remedied through various tax solutions like the Voluntary Disclosure Program, which, for example, allows you to amend and re-file returns and declare errors and non-disclosure that has occurred on a past return – all without penalty.
Maybe the issue occurred on a past return and some years have passed so you are thinking it is best left alone. Well, the problem with this is that the CRA has a number of resources (including the CRA Snitch Line) to catch up to you – and you cannot qualify under programs like the Voluntary Disclosure Program once the CRA has contacted you because disclosure will no longer be voluntary. Penalties and interest will be assessed and, depending on how much time has passed, interest and penalties can double and even triple the size of your tax debt.
Just because you don’t file your taxes or don’t report earnings, that doesn’t mean that the Canada Revenue Agency doesn’t know about them. Any earnings reported by employers, clients, etc. are taxable, and just because you don’t make the CRA aware of them, doesn’t mean that others haven’t. And even if no one reported your earnings, that doesn’t mean others have not reported you. The CRA Snitch Line does exist – and people use it.
What is the CRA Snitch Line? The CRA Snitch Line is a direct link to the CRA where individuals can call anonymously to report others who have not reported earnings. And the CRA takes these tips very seriously, investigating in a police-like manner any calls they receive. As the Financial Post recently stated “The CRA is a collection agency working for the government, with police powers to investigate you and charge you with offences against the tax code. Anything you tell them can be used against you in tax court or criminal court. (Reference found at http://www.financialpost.com/scripts/story.html?id=cece2c18-8c2d-4416-8a30-161fcd688c81)
Take this example. You own your own business and earned some cash income that you didn’t declare on a return. You think that you are safe because the CRA has not contacted you and you think that because there is no record of the cash exchange it will be difficult to prove that you earned the income. Then you and your spouse split up and she is demanding alimony and a lot of additional support. She knows you had some cash income so not only does she tell her lawyer, but she also reports you to the CRA Snitch Line.
Ex-spouses, ex-business partners, disgruntled accountants, suppliers and even past clients have been known to call the CRA Snitch Line to create problems for someone they have a dispute with. Say for example your books are clean – a call to the CRA Snitch Line can result in an audit and high costs to you to hire audit representation.
Don’t think that just because your income has not been reported that you are safe from CRA audits or enforcement action. The CRA Snitch Line exists for a reason. Don’t get caught up in a CRA audit after having been reported to the CRA Snitch Line. Settle your tax problems now by working with an organization experienced with and committed to resolving them and who can leverage resources like the Voluntary Disclosure Program to mitigate your tax liability.
For more information about the CRA Snitch Line, please contact Tax Solutions Canada by calling 1.888.868.1400 or visiting us online at www.taxsolutionscanada.com.