Fighting accusations of tax evasion

Fighting accusations of tax evasion

On behalf of Howard C. Cohen & Associates on July 31, 2018

Like many in Ontario, you work hard for your money. You obtained an education, received the proper training for your position and do whatever is necessary to stay on top of the changes and developments in your industry. You understand your obligations to others, including the government of Canada, but you are careful of how you distribute your wealth.

Perhaps this is why you are in the crosshairs of the Canada Revenue Agency. This government agency investigates and pursues those who violate tax laws through fraud, tax evasion and other offences. If you are under investigation for tax evasion, you have a lot at stake, and you would do well to understand the process and potential consequences of such an inquiry.

What does tax evasion look like?

Tax evasion is a willful refusal to pay the taxes the Canadian government says you owe. There are numerous ways citizens may attempt to evade their duty to pay taxes, such as these:

  • Reporting higher expenses than you have
  • Hiding income or intentionally omitting income on your tax returns
  • Making false claims on your tax returns
  • Not filing your returns

Often, convictions for these offences result in fines and prison, but for an individual, the government may allow you to avoid more severe penalties if you make restitution. However, serious problems are in store for you if the CRA believes you are evading your tax obligation for criminal purposes. The Criminal Investigations Program of the CRA will focus on your case if they suspect you are involved in any of the following:

  • Evading taxes that total a significant amount
  • Failing to report international sources of income
  • Promoting or organizing complex systems, such as illegal tax shelters, to commit fraud
  • Combining tax evasion with other crimes, such as terrorism, drug trafficking or money laundering
  • Avoiding Goods and Services Taxes/Harmonized Sales Taxes through black market transactions

The CRA and the Royal Canadian Mounted Police work with law enforcement agencies across the country to track down suspected tax evaders. These entities have access to domestic and international intelligence, and you can be certain they will put every resource to work if they suspect you of attempting to cheat the government on a criminal level.

Whether you are dealing with a tax dispute in civil court or facing criminal charges of tax evasion, you have heavy consequences to consider. You do not have to deal with these issues alone, and you may benefit from the counsel of a knowledgeable legal professional.