CRA enforcement is increasing

It has been our firm’s observation that the CRA’s vigilance is ever increasing. Audits are more probing and greater public resources have been mobilized. The Department of Justice is seeking jail terms on more and more tax evasion convictions. The Judiciary seems more willing than ever to consider such requests.

Taxpayers are discovered a number of ways; cross audits reveal discrepancies, anonymous “tipsters” phone in accusations and ever present computer monitoring spots anomalies in tax return fields.

Recent targeted audits in offshore bank accounts, increased exchange of foreign bank information and general information gathering abilities are bringing more and more tax evaders to light. The reality is however, that very few of the people who have serious tax problems have hidden Swiss bank accounts. Most of them are regular people who for a variety of reason have not followed the rules to such a degree that they run the risk of a prison sentence should their malfeasances be discovered. Often they are people who are engaged in small business who have been taking cash under the table for years. Sometimes they are people who have disposed of a single piece of property and “forgotten” to declare the gain. They are people who have claimed personal or non-existent expenses to such a degree that they cannot claim, with any credibility, that they are a victim of bad bookkeeping or inadvertence.

CRA Voluntary Disclosure Program

The Voluntary Disclosure program allows a taxpayer to come forward, provided certain conditions are met, and achieve immunity from prosecution (ie: prosecution for tax evasion) and civil penalties. A conviction for tax evasion carries with it, generally speaking, a fine of between 50% and 200% of the taxes evaded along with, a possibility of a jail sentence of up to two years (for summary conviction matters). Civil penalties are heaped on top of evasion fines and are, generally speaking, 50% of the incremental taxes assessed (interest is levied on the penalties).

The specifics of the program are well laid out at: http://www.cra-arc.gc.ca/gncy/nvstgtns/vdp-eng.html

Some firms, who aggressively market themselves, characterize the CRA as the enemy (i.e.: people who are out to get you at all cost). At CanadianTaxLawyer.com we do not subscribe to the view that CRA is the enemy of the taxpayer. We have found over the many years of helping clients that some good can come, most times, with a co-operative approach. Our approach is particularly validated when one considers that the Voluntary Disclosure program is an administrative concession of sorts. Certainly there are times when the “gloves must come off” and we will not hesitate to make use of all available remedies including the intercession of the Federal Court of Canada.

Some firms charge an excessive amount of money for Voluntary Disclosure/Tax Amnesty services. Some firms make unrealistic claims as to the effect of their services. Before you retain counsel in these matters you ought to speak with a few firms to put yourself in a position to make the right decision for your matters. Particularly, ask if it is possible to obtain relief from Tax principal under the Voluntary disclosure program.

Our track record is quite accomplished in these matters. We know and have worked with the people who make the decisions. We have a long record of working with them to achieve results for our clients. Give us a call.