What are the Potential Penalties for Tax Evasion in Canada?

It’s time to file our income taxes again and the Ontario criminal lawyers at Auger Hollingsworth want to take this opportunity to remind you of the importance of filing your tax returns.  Most people don’t enjoy filling out their income tax returns and it can sometimes be easy to procrastinate.  Failing to file your income tax returns is serious and should be taken seriously.  If you don’t file your taxes, or if you conceal income or make false claims deductions, you may be charged with tax evasion.  Canada’s Income Tax Act outlines all of the offences and penalties associated with tax evasion.

The potential penalties for tax evasion include fines, imprisonment, or sometimes, both.  The amount of the fine is usually in proportion to the amount of taxes an individual was trying to evade.  Depending on the particular circumstances and the seriousness of tax evasion, the penalties can be quite severe.  Failing to file your income tax return is usually considered to be a lesser offence with fines ranging from $1000 – $25 000.  You may also face up to twelve months in prison for not filing your taxes.  Again, this varies on a case by case basis so it is best to speak with an experienced Ontario criminal lawyer if you are facing tax evasion charges.

Making a false statement on your income taxes is more serious.  Someone who makes a false or misleading statement or intentionally tries to avoid paying taxes will usually receive a fine in the amount of fifty to two hundred percent of the amount of tax that was supposed to be paid.  An individual may also receive up to two years in prison for making a false statement on their income tax return.

Tax evasion also includes claiming false credits or deductions that an individual is not really entitled to.  This also includes conspiring with another person to claim false deductions.  The penalty for this kind of tax evasion is similar to making a false statement since the individual receives a fine between fifty and two hundred percent of the amount of tax that would be assessed if the individual had not tried to make a false deduction.  A prison sentence of up to two years can also be added as a penalty.

As you can see, tax evasion is taken seriously in Canada so it is important to file your income tax returns properly.  There are a number of services that exist to help individuals file their taxes so feel free to take advantage of this help.  If you are facing tax evasion charges, you should hire legal counsel to represent you.  The Ottawa criminal lawyers at Auger Hollingsworth can help your defence against tax evasion charges.

Can My Accountant Help Me With My Income Tax Evasion Charges?

While it may seem as though your accountant would be able to help you face tax evasion charges, it is important that you stop talking with your accountant immediately. If you are charged with income tax evasion do not discuss your case with your accountant.

Although you may have had a good relationship with your accountant, it is important that you do not discuss your charges with him or her. This is because your accountant could potentially unwillingly become a witness against you in court. If this happens, you don’t want them to have anything to say against you.

The Canada Revenue Agency or the prosecutors can use your accountant as a witness in court. In fact, your accountant could be compelled to be a witness for the prosecutors, even if he or she doesn’t want to. If called as a witness, your accountant would have to honestly answer all of the prosecutor’s questions and will be required to tell the court everything that you shared with him or her. This could potentially damage your case so it is important that you do not give any information about your charges or your case with your accountant.

If you are charged with income tax evasion, the first thing you should do is enlist the help of an experienced criminal defence lawyer. If your accountant is interested in your case and wants to know details, even if they offer their “help”, it is best if you politely tell them that you are unable to discuss your case with them. It is possible that you will be able to resume contact with your accountant at a later date, but until your lawyer advises you in this way, refrain from discussing your case with your accountant. This is one way that you can do all that you can to ensure your defence is as strong as possible.

Ottawa Tax Evasion Lawyer

Tax evasion and other violations of Canada’s Income Tax Act are serious criminal offences.  Canada’s Income Tax Act outlines all of the possible offences regarding the submission, payment, and handling of tax.  Some of the more serious offences include making a false statement in a tax return, altering or destroying your account books with the intent of avoiding tax, and purposely avoiding tax payment.  In addition to these offences, less serious infringements and regulatory offences are also outlined in Canada’s Income Tax Act.

Some may think that tax evasion is a crime committed exclusively by wealthy individuals or businesses, but in reality, offences against Canada’s Income Tax Act are more common than you might think.  Whether intentionally or accidentally, many individuals fail to file their tax returns, submit their returns late, or fail to report income on their returns.

It is very important that you complete your tax return forms properly in order to avoid any criminal charges.  In the event that you are charged with violating the Income Tax Act, contact a criminal lawyer who can help you create a defence for your case.

If you are charged with violating the Income Tax Act, you may have recourse to one or more of the possible defences available to those charged with tax evasion.  If you are found guilty of the offence, you will likely be responsible for paying the tax as well as any related penalties and interest.  In some circumstances, individuals can receive a criminal sentence in addition to these financial penalties.  These criminal sentences can include additional fines as well as time in prison.  Your lawyer will be able to advise you and defend your charges appropriately, based on the specific nature of your case.

What Should I Do if I’m Audited by the CRA?

OTTAWA WHITE COLLAR CRIME LAWYER – Tax evasion in Canada is in headlines again, and to follow yesterday’s blog post about the Swiss HSBC tax information leak – involving nearly 2,000 Canadians – it would be fitting to take a look at the Canada Revenue Agency (or CRA for short).

When an individual is evading taxes, or otherwise failing to follow guidelines under the Income Tax Act, the CRA is responsible for noticing the discrepancy and then acting on it. In cases of smaller discrepancies, this action consists of raised taxes, penalties, or interest charges.

But in some cases – ones where the CRA suspect tax evasion has been committed – the agency calls an audit or investigation of a taxpayer’s tax information. Our latest article, Canada Revenue Agency Audits and Tax Evasion, explains why and how the CRA conducts these audits and investigations. It also gives you some handy information on how to respond if you are questioned, audited, or investigated in connection with possible tax evasion.

The bottom line is that whenever you find yourself under audit or investigation by the CRA, it’s important to get in touch with a lawyer who has experience handling tax cases. That audit could lead to charges, and you’ll want someone in your corner who understands the Canadian law around tax evasion and the Income Tax Act.

If you have already been charged with tax evasion, it’s crucial that you hire a lawyer who is experienced with large-scale tax cases, and has a proven track record defending against accusations of white-collar crime. For more information, contact the criminal defence and tax evasion lawyers at Auger Hollingsworth by phone 613-233-4529 or by email [email protected]