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How the CRA Catches Tax Cheats

The Canadian Government has put hundreds of millions of dollars into the Canada Revenue Agency to catch tax cheats. Professional Accountant Toronto has noticed the effect of this. One of the ways the CRA catches tax cheats is through a net worth audit. The CRA, on a net worth audit, does its own investigation into a taxpayer’s income. This is where a professional tax lawyer in Hamilton or Toronto is valuable.

When the CRA gets all your financial data from others, including banks, and then uses estimates and assumptions to guess at how much income you really made, a Professional Accountant Toronto can ensure that they don’t make wrong assumptions or use problematic methods. Unlike other areas of life, you as taxpayer have the burden of proving the CRA wrong. The CRA can make assumptions, even without proof. These assumptions in a net worth audit often prove difficult to disprove after the fact. This leaves taxpayers who have not kept proper records, who live beyond their obvious means, or otherwise appear healthier than the CRA thinks they can legitimately be at risk.

This particularly affects wealthy immigrants from cultures that like cash and who bring wealth from their home country to Canada. If, on a net worth audit, the CRA assumed this money and wealth to be taxable income, the taxpayer and a Professional Accountant Toronto have an expensive, uphill battle to fight the assessment. The best method, short of keeping full records and declaring all amounts, is to get a Professional Accountant Toronto on board as soon as you know you face a net worth audit. Prevention is always cheaper and more effective than after the fact cures.

How the CRA Catches Tax Cheats FAQs

How can a person cheat on their taxes in Canada?

Taxpayers can cheat on their taxes in Canada by:

  • Making deceptive or false records and documents
  • Falsely claiming tax credits and benefits
  • Not remitting proper source deductions
  • Making a fake business to reduce taxes and claim losses
  • Not filing tax returns when necessary
  • Taking cash “under the table”.
  • Making false tax deductions and expenses
  • Not declaring all income
  • Making a charity and earning from non-charitable activities

Using the Canada Emergency Student Benefit (CESB) or Canada Emergency Response Benefit (CERB),

but you don’t meet the criteria Organizations and businesses can also cheat on their taxes in Canada by:

  • Misusing the Canada Emergency Rent Subsidy (CERS)
  • Misusing the Canada Recovery Hiring Program (CRHP)
  • Misusing the Canada Emergency Wage Subsidy (CEWS)

Using the Canada Recovery Caregiving Benefit (CRCB), the Canada Recovery Sickness Benefit (CRSB), or the Canada Recovery Benefit (CRB) but don’t meet the eligibility criteria.

What happens if you cheat on your taxes in Canada?

When taxpayers are found guilty of tax evasion, they should still repay the total amount of taxes owing, plus civil penalties and interest. In addition to that, the court can charge you about 200% of the taxes evaded and impose a five-year imprisonment term. CRA can seize your wages, assets, and more until you pay the interest, penalties, and taxes.

Can I go to jail for cheating on my taxes?

In most cases, the CRA is more interested in collecting the money you owe than seeing people end up in jail. For that reason, the CRA has implemented high-interest charges and penalties on an outstanding tax debt. If you use the Voluntary Disclosures Program, the CRA may not charge fines, and you’ll only be expected to pay the amount you owe plus interest. However, it only applies to individuals who the CRA has not yet contacted.

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pro-tip

Pro Tip

ACCESSING THE SMALL BUSINESS DEDUCTION IN YOUR BUSINESS

The Small Business Deduction gives businesses a tax deduction on the first $500,000 of income. This saves an eligible corporation around up to $50,000 in income taxes. There are a number of conditions that have to be met to be eligible for this deduction.

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This is an announcement from Aaron Baer, legal counsel to Faris CPA.

I have been working with Faris CPA for more than 10 years.

Faris CPA is being attacked by Kenneth John Weakley (Oct 1969).

I am posting this review because Kenneth John Weakley has been deleting his reviews and has been reposting them, so that Faris CPA's responses don't always show up.

Faris CPA's position is as follows:

Faris CPA is a well-regarded firm that is compliant with CPA Ontario obligations and has a good track record.

Under no circumstances will Faris CPA be paying Kenneth John Weakley any amount.

Kenneth John Weakley's claims do not have any merit.
Response from the owner:Thank you Aaron for your help with this matter. Please see below my entire response to Kenneth John Weakley fake reviews: “Attention all readers: Kenneth John Weakley DOB October 20, 1969 Address: Address: 821A Fulham Road, London, U.K. SW6 5HG ( Title: NGL449634) Faris CPA and 3 other reputable lawyers in the GTA are being aggressively attacked with fake Google reviews posted by Kenneth John Weakley (DOB October 20, 1969). Unfortunately, his repeated blackmailing and extortion attempts in the past few months have failed and he is still hoping to be successful by keep posting those false and fake reviews. Please note all personal information mentioned in our response is available online, publicly available and anyone can access it and none of the information was obtained while doing business with Kenneth John Weakley. Feel free to Google his name and see the below link to confirm. As such, there is no breaching confidentiality issue whatsoever. https://find-and-update.company-information.service.gov.uk/officers/EfbNEs5kNSRQeb9uq8kdZL0LGm8/appointments Based on the above link you will see the following information: This is a fake review posted by Kenneth John Weakley (DOB: October, 20 1969). Address: 821A Fulham Road, London, U.K. SW6 5HG
Had a very good experience with Sam and his team. They dealt with my CRA audit in the most efficient way possible. I admire their professionalism and expertise in providing answers to the CRA and providing a perfectly reconciled package which was a key to resolve the tax issue. If you look for a tax consultant firm, hire Farid CPA. 10 stars
Response from the owner:Thank you for the five stars and the positive review.
I was referred to Sam Faris by a family member who highly recommended him to deal with my CRA audit matter which has been ongoing for almost 2 years. Considering that this was a sensitive issue, I needed to make sure that Sam would be the right fit to handle my case. I requested an in-person meeting. I met with Sam for more than 2 hours. He went through CRA proposal letter and immediately identified the weaknesses in CRA’s calculations. He immediately advised on the best approach to dispute this proposal and provided a time line when he will submit the counter analysis. I was impressed with his confidence and his expertise and decided to retain his services. He worked on my file around the clock to ensure meeting the deadline. At the end, Sam was able to reduce the tax bill and I was able to pay it with no hesitation. While Sam was working on the file, he was in a full control with the situation by communicating with the auditor on timely and professional manners. I never felt that I was left in the dark as Sam was always providing me with an update. I do recommend to hire Sam for any dispute with the CRA. Thanks
Response from the owner:Thank you for your positive reviews and kind words.