The Canada Revenue Agency (CRA) has issued a warning against tax schemes that claim individuals do not have to pay their taxes.
Those who sell and promote such schemes are referred to as “tax protesters,” and in addition to not reporting on their own earnings, they try to convince others to do the same. Tax protesters try to convince individuals that they are not subject to tax laws as a “natural person.”
Participants face fines and jail time
“People who evade taxes take resources away from social programs from which all Canadians benefit,” said the CRA in a press release issued this week. “Those who choose to participate in these schemes, as well as those who promote these schemes, face serious consequences, including fines and jail time.”
The CRA had identified and reviewed tax returns of over 3,100 individuals who participated in such schemes as of March 31, 2017. The CRA has also conducted criminal investigations, executed search warrants and laid criminal tax evasion charges on individuals involved in tax protester schemes.
75 tax scheme promoters convicted
“Between 2006 and 2017, 75 tax scheme promoters from across Canada were convicted of tax offences related to tax schemes,” said the CRA. “This lead to $7.15 million in court imposed fines and a total of 936 months of jail time awarded. Furthermore, for the first time in the history of the CRA, we are seeing criminal convictions for ‘counselling others to commit a tax offense.’”
The CRA said there has been a drastic decline in these types of cases due to its actions and the significant jail sentences individuals involved in such cases face.