Tax Evasion Archives

YouTube Contest

According to a News Release on the Canada Revenue Agency web site, Minister Jean-Pierre Blackburn has invited Algonquin College students to speak up about the underground economy in a YouTube video contest.

In a meeting with Algonquin College students on February 12, 2009, the Minister of National Revenue invited students to discuss the negative impact of the underground economy and encouraged them (and all Canadians) to have their say through the national Underground Economy – Not your Problem? YouTube video contest.

“The government is committed to addressing the costs and risks associated with the underground economy and protecting Canada's tax base,” said Minister Blackburn. “Those who participate in the underground economy avoid their tax responsibilities at the expense of law-abiding individuals and businesses. They're taking away funds needed for the programs and services relied on by Canadians, especially at a time when we should all be working to build our economy together.”

For the full news release please see the CRA web site at:
http://www.cra-arc.gc.ca/nwsrm/rlss/2009/m02/nr090212-eng.html

CRA has denied over $2.5 billion in tax shelter gifting arrangement donations

According to the Canada Revenue Agency web site, despite numerous warnings and audit actions by the CRA, some taxpayers are still participating in tax shelter gifting schemes that are likely to result in reassessment and donation claims being outright denied.

"The CRA reminds taxpayers that tax shelter numbers are used for identification purposes only. A tax shelter with an identification number does not guarantee that taxpayers are entitled to receive the proposed tax benefits."

The CRA indicates that it plans to audit all tax shelter gifting arrangements and that to date well over $2.5 billion in claimed donations have been denied.

For more information, see:
http://www.cra-arc.gc.ca/nwsrm/lrts/2008/l081204-eng.html

Tax Alert: Tax cheating software?

The Canada Revenue Agency has released a Tax Alert warning businesses against using tax cheating software.

According to the CRA, electronic sales suppression software is currently being marketed and sold to Canadian businesses allowing business to hide income and evade taxes. CRA reminds Canadian businesses that tax evasion is against the law and could result in severe penalties.

"Electronic sales suppression software is designed to work with point-of-sale systems and electronic cash registers. Businesses use the software to delete a portion of sales from their computer records to evade payment of income and sales taxes. In some cases, restaurant owners who suppressed sales using this software have collected taxes from patrons and not remitted them to the CRA as required by law.

The CRA has over 5,000 employees dedicated to finding unreported business income and ensuring that the proper amount of taxes is paid, even when sales records are missing.

The CRA is working to identify those who develop, sell, or use the software. Businesses that have used electronic sales suppression software are suspected of having hidden thousands of transactions and millions of dollars in sales. Once caught, these tax cheaters will face penalties, court fines, and possibly even jail. They will also have to pay the taxes they tried to evade, plus interest.

Although customers may not notice if a business is using electronic sales suppression software, they can do their part to ensure tax compliance by always requesting a copy of their receipt. Businesses which evade taxes are placing an unfair burden on the individuals and other businesses that accurately report their income and pay the taxes they owe."

For more information on this CRA Tax Alert, please see:
http://www.cra-arc.gc.ca/nwsrm/lrts/2008/l081210-eng.html

Newfoundland and Labrador businessman's tax scheme nets house arrest; heavy fine

The Canada Revenue Agency has issued a news release indicating that a Newfoundland and Labrador businessman and engineer has been fined more than $488,000 and sentenced to four months of house arrest after the individual was convicted on charges of tax evasion in St. John's Provincial Court.

A CRA investigation revealed that the individual deliberately hid income by incorporating his company and depositing income in offshore bank accounts in a "tax haven" jurisdictionand that he also failed to collect, remit, and file any GST/HST returns.

The news release serves as a reminder to Canadians of the potential for still penalties for tax avoidance and evasion schemes.

For more information, please see the CRA web site:
http://www.cra-arc.gc.ca/newsroom/convictions/nl/nl080304-e.html

Income earned abroad is taxable

The Canada Revenue Agency (CRA) has provided a tax alert on its web site reminding Canadian taxpayers that they must report their worldwide income from all sources, both inside and outside Canada.

The tax alert warns Canadians about tax havens for the purpose of tax avoidance and evasion -- and the serious consequences for not reporting income.

Did you know that under Foreign property ownership reporting rules you have to report foreign property with a total cost of more than $100,000 CDN on your tax filing.

For more information on this tax alert, see:
http://www.cra-arc.gc.ca/newsroom/alerts/2008/a080228-e.html

Tax cheating is a crime

Released on the Canada Revenue Agency web site, Gordon O'Connor, Minister of National Revenue, and the CRA remind Canadians that not complying with the tax laws can result in serious consequences.

“Not paying your taxes is against the law,” said Minister O'Connor. “The Canada Revenue Agency works hard to identify and correct non-compliance. This keeps the system fair for the honest Canadians who comply with the tax laws.”

2006-2007, Canada Revenue Agency (CRA) criminal investigations led to convictions in 245 cases of tax evasion, or 98% of the files prosecuted. Courts imposed fines totalling $13.4 million and sentenced 26 offenders to more than 37 years in prison. Sentences for those who were ordered to serve jail time for tax-related offences ranged from 1 month to 3 years.

Convictions for tax evasion, including not filing tax returns and making false declarations, can result in court imposed fines of up to twice the taxes evaded, plus jail time. In addition, taxpayers still have to pay the taxes owed and all other civil penalties and interest imposed by the CRA.

For more information on this or other CRA news releases, see:
http://www.cra-arc.gc.ca/newsroom/releases/2008/jan/nr080123-e.html

CRA News Release: Resolve to correct your tax information

According to the CRA web site, "last year the CRA processed 8,244 disclosures for taxpayers who used the Voluntary Disclosures Program and got a second chance to comply with their tax obligations. Coming clean saved these taxpayers from an audit or a criminal investigation, which can result in penalties, fines, and even jail time. Their valid disclosures involved more than $525 million in taxes."

The CRA is advising Canadians to "Begin the New Year with a clean slate and a clear conscience!"

The Canada Revenue Agency's (CRA) Voluntary Disclosures Program allows people to come forward and correct their tax information and, thereby, avoid being penalized, criminally investigated and/or prosecuted.

For more information on this news release, visit the CRA web site at http://www.cra-arc.gc.ca/newsroom/releases/2008/jan/nr080103-e.html

$500k fine and 2 years for GST fraud

Today the Canada Revenue Agency issued a news release citing a case of GST tax fraud in British Columbia.

The news release stated that Rolf Van Nuys and Valley Heavy Equipment Inc. pleaded guilty to 14 counts of GST fraud in Abbotsford Provincial Court. The Abbotsford businessman was sentenced to two years and six months in jail. He and the company were fined $501,830.

More information is available on the CRA web site at:
http://www.cra-arc.gc.ca/newsroom/releases/2005/feb/0202vancouver-e.html

The CRA also reported a near $350,000 fine to a London travel agency director for tax evasion. According to the CRA web site, Walter T. Whale, director of 556032 Ontario Limited (operating as Travelsource Network) was fined $254,060 for failing to remit $127,030 in GST, and fined $7,760 for evading the payment of federal corporate income taxes for the taxation years of 1995 to 1999.

More information is available on the CRA web site at:
http://www.cra-arc.gc.ca/newsroom/prosecutions/on/0202london-e.html