We solve serious CRA tax problems

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.

About the Author

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.

Sam Faris helped me with a complex cross border tax matter. This issue involved 12 years of tax returns and it was as a result from mistakes that my previous accountant did. He was able to perfectly address the issue with the CRA and to fix the returns under the voluntary disclosure program. End results; CRA accepted Sam’s work with not a single question and the returns were reassessed to my satisfaction without penalties and interest. Many thanks to Sam brilliant work.
Response from the owner:Dear Sir It was a pleasure working on your file and get you the results that you aimed to have and to your satisfaction. We have been dealing with similar cases for many years and we were confident that the results are favorable. Please feel free to contact us in the future if you do require further help.
I found Sam’s firm online and I read the excellent Google reviews about him and his team. I decided to hire him to help me navigate an issue with the CRA. Sam delivered as expected and as promised. Results were to my satisfaction and I am very happy with how the process was handled. Highly professional and extremely knowledgeable.
Response from the owner:Dear Tanya Thank you for the 5 stars Google review and your kind words. We strive to provide the best customer service and make our clients relax and calm during the process. The cases we are taking are very sensitive so providing quality work to the CRA is extremely important so just to avoid any escalation and to make sure that our package is accepted from the first round. We will remain at your disposal anytime you require our services. Sam Faris
You will notice Sam is very quick with his responses. He knows his stuff and gives solid advice. Highly efficient, would recommend.
Response from the owner:Dear Jay Thank you for the 5 stars positive review. Working with you was pleasant too. Many thanks for your business and please do feel free to contact me if you have any questions. Sam Faris
after the initial assessment I had with Sam, he proposed a strategy to dispute CRA decision. He knew up front how to approach my case as he seemed that he dealt with similar cases many times. I hired him the end results were as promised and no surprises. Sam is very trust worthy and has a high business standards. May thanks Sam.
Response from the owner:Many thanks for the positive review.
I recently turned to Faris CPA for help with my tax filing, and I must say, I'm over the moon with the results! The whole process was a breeze, saving me time and stress. What really stood out was the friendly professionalism, impressive expertise, and crystal-clear communication from Sam and his team. They made what could've been a daunting task feel like a walk in the park! If you're looking for a warm, approachable tax expert who genuinely cares about his clients, I wholeheartedly recommend Sam and the folks at Faris CPA - they're great tax consultants!
Response from the owner:Many thanks.
Working with Sam and his team was an extremely valuable experience. One of the best Tax consultants in Toronto I've ever come across.

He has a ton of experience resolving problems with the CRA and was truly a big asset to me when I had issues I needed help with.

Would highly recommend Sam and Faris CPA, thanks again for all the great work!
Response from the owner:Thank you Paul for your positive feedback and we are glad we met your expectations.
I had an amazing experience working with Faris CPA for my CRA needs. They really know the CRA processes and made everything so easy. They were super professional, always ready to answer my questions, and made sure everything was done right. I couldn't have asked for better help. Highly recommend their services for anyone dealing with the CRA! -Sara
Response from the owner:Thank you Sara for the 5 stars review.
Faris CPA absolutely fantastic tax consultant firm. Sam and his team help me with an extremely difficult tax audit by CRA. They have done an amazing job. You guys are amazing and well deserve five star.
Response from the owner:Dear Eliyas Thank you for the positive Google review and the kind words. We heave dealt with many CRA audit cases. We have delivered the best services to our clients as we are confident with our work and its quality. Please feel free to reach out us if you require our services in the future. Sam Faris
Sam Faris is number one tax advisor and consultant. I contacted a few professionals but he was the only one who was able to help me with my dispute with the CRA. Many thanks to him.
Response from the owner:Said Thank you for the kind words and the 5 stars Google review. CRA issues may get very complicated. I am glad that everything worked out perfectly with you. Feel free to reach out to us any time you require our services. Sam Faris