The Canada Revenue Agency (CRA) has always been serious about penalizing tax evasion, and they are sharpening their focus on investigating anyone who facilitates or encourages non-compliance. Here’s a graphic case in point to keep in mind if you’re thinking of skirting the rules.
In a dramatic move, a Calgary investment promoter, Milowe Allen Brost, was fined $390,878 for tax evasion on April 16, 2015, and sentenced to a jail term of 27 months. As head of Capital Alternatives Inc., and then the Institute for Financial Learning Group of Companies Inc., Mr. Brost promoted national and international investments to the public, trained others to promote them as part of what turned out to be his Ponzi scheme, and knowingly failed to claim the income on which he was earning commission and other income.
You might think the Brost case is unique and drew CRA’s attention because of its complex elements. But it doesn’t take such an elaborate scheme to run afoul of the taxman. Simply failing to file a return will attract fines, too. For example, on May 8, 2015, CRA announced that a taxpayer from Surrey, BC, was fined $5,000 for failing to file personal income tax returns from 2003 to 2007.
According to the CRA, “When taxpayers are convicted of failing to file tax returns, in addition to any fines imposed by the courts, they must still file the returns and pay the full amount of taxes owing, plus interest owed, as well as any civil penalties that may be assessed by the CRA.” And, in the case of income tax and GST evasion, the court may impose an additional fine of up to 200% of the taxes evaded and impose a jail term of up to five years.
Bottom line, if you haven’t filed yet, fess up. It will definitely be cheaper in the long run. It’s best to get qualified legal and financial help if you’re in this situation.
Deadline alert:June 15 is the deadline for business proprietorships to file their taxes. Be sure to see your advisor to avoid facing a higher tax bill than necessary.
Consumer alert:Failing to file your taxes on time is not an innocent case of procrastination or simply an oversight. CRA views this as a serious offence and will penalize you accordingly. If you’re not up to date on your tax returns, consult your financial advisor as soon as possible and find out how you can set things straight through CRA’s Voluntary Disclosures Program, before CRA takes action against you (www.cra.gc.ca/voluntarydisclosures).
Courtesy Fundata Canada Inc.© 2015. Evelyn Jacks is president of Knowledge Bureau. This article originally appeared in the Knowledge Bureau Report. Reprinted with permission. All rights reserved.
