Mark Feldstein, Chartered Accountant, discusses some of the CRA’s tactics that even include the CRA publishing the names of those convicted of tax offences on their website.
Mark Feldstein, Chartered Accountant, discusses what can happen if you don’t declare your income to the CRA and what you can do to correct the problem if you are in this situation.
While an unresolved tax debt can wreak financial havoc on an individual and their family, what can be worse is the potential medical implications. Many Canadians who have left a tax problem (undeclared income or past due tax returns) unresolved for many years, begin to feel mounting anxiety, stress and often have physical side effects.
In 2008 the Associated Press reported on an AOL Health poll. According to the Associated presses report on the AOL poll, people dealing with mountains of debt are much more likely to report health issues like ulcers, anxiety, panic attacks, severe depression and even heart attacks. According to the AP/AOL poll and among the people reporting high debt stress:
People who reported high stress also were much more likely to have trouble concentrating and sleeping and were more prone to getting upset for no good reason.
In our business we primarily work with taxpayers, resolving tax problems that have existed for many years.
Here is one example of a common cycle we see:
This is a vicious and personally destructive cycle. A tax debt can be brought under control and it is important that an individual who has this type of problem, seek a professional to handle it. Our tax management practice places great emphasis on not only assisting the taxpayer to become compliant with the taxing authority but also to deal with the financial debt that will be left over once all income has been declared and past due returns are filed.
We see the physical consequences of avoiding and allowing a tax debt to get out of control every day.
If you are in this situation you don’t have to hide anymore and you should make a commitment to yourself to stop avoiding your tax problem. In the case of a tax problem, time is your enemy.
if you are the shareholder of more than one corporation in Ontario, or across Canada for that matter you want to watch this video blog. Mark Feldstein discusses the Canada Revenue Agency and shareholder appropriation.
Mark Feldstein discusses possible ways that the new Harmonized Sales Tax (HST) will impact the way that the Canada Revenue Agency (CRA) pursue unpaid taxes.
I thought it was important to focus on discussing charitable donations as this week’s tax topic. The government is cracking down on individuals who have declared charitable donations from unauthorized charities on their tax returns.
You see, the Canada Revenue Agency publishes a list of authorized charities on their website and if you have claimed a donation to a charity that is not on the list you could be facing a reassessment and significant interest and penalties.
The CRA requires that all receipts for authorized charitable donations have the following content:
If you have made a donation that you have declared on a tax return that is not on the CRA list of authorized charities or it was on the list but your receipt does not contain the information outlined above the CRA will show you absolutely zero compassion, not IF but WHEN you get caught.
If you are in this situation there are a couple of things you can do. One thing you should not do is attempt to negotiate with the CRA on your own.
No problem, but if so, there are some important things you need to know. Cash payments must be reported on your annual income tax return. They are also subject to GST/HST. Failure to report cash payments is tax evasion.
For example, if you fail to report all income earned, cash or otherwise, fail to report and remit GST/HST, fail to file T5018 returns for sub-contractors, file as self-employed when you are an employee or claim personal expenditures on your business tax return … there can be serious consequences. You could be subject to heavy fines, lose your assets, go to jail or all of the above
Canada Revenue Agency (CRA) uses a variety of sophisticated tools and tactics to enforce tax compliance, including:
Paying your taxes is the law. Paying your taxes is also simpler than dealing with the consequences. It may feel overwhelming if you have fallen behind, but Mark Feldstein & Associates can help you set the record straight.
You may even qualify for penalty and/or prosecution relief under the CRA’s Voluntary Disclosures Program (VDP). For more information on the VDP contact Mark Feldstein & Associates. We specialize in taxation and accounting for Tax Amnesty.
William Joseph McCarvell, a real estate agent in London, was fined a total of $16,000 after pleading guilty to 16 charges of failing to file personal and corporate tax returns by the required due dates.
McCarvell operated under the name Bill McCarvell Realty Inc. In June 2009, he was fined $8,000 for not filing his 2003 to 2006 personal income tax returns, as well as the 2001 to 2004 corporate returns. He was ordered him to file these eight outstanding returns with the Canada Revenue Agency (CRA) by September 30, 2009.
In November 2009, McCarvell pleaded guilty to not filing his 1999 to 2002 personal tax returns, as well as corporate tax returns for 1999, 2000, 2005 and 2006. He was fined an additional $8,000. A new compliance order required McCarvell to file these additional eight returns by February 1, 2010.
When convicted, in addition to court imposed fines, individuals or corporations are still obligated to file the tax return(s) and pay the full amount of taxes owing, plus interest, as well as any penalties assessed by the CRA.
If you have not filed returns, or have not reported all income, you may qualify for penalty and/or prosecution relief under the CRA’s Voluntary Disclosures Program (VDP) subject to certain conditions. One condition is that you must apply and make full disclosure before the Agency starts any action or investigation.
For more information on the Voluntary Disclosures Program contact Mark Feldstein & Associates. We specialize in taxation and accounting for Tax Amnesty. We can help.
Robert Sproats, of Brampton, pled guilty in October 2009 to two counts of failing to file tax returns. He was fined $2,000. A Canada Revenue Agency (CRA) investigation showed that Sproats failed to file his 2007 personal income tax return and as Director of Deborah Thomson School of Dance & Fitness Inc., failed to file the company’s 2007 corporate tax return.
Anyone who does not file a personal, corporate, or GST/HST return as required is guilty of an offence. On conviction, they are subject to a fine of between $1,000 and $25,000, or both the fine and imprisonment for up to 12 months, for each count. CRA says that in addition to any fines imposed by the courts, they are still obligated to file the tax return and pay the full amount of taxes owing, plus interest, as well as any penalties assessed by the CRA.
Individuals who have not filed returns, or who have not reported all their income, may qualify for penalty relief under the Voluntary Disclosures Program (VDP). “They will not be penalized or prosecuted if they make a full disclosure before the Agency starts any action or investigation against them,” says CRA in a news release. “These individuals may only have to pay the taxes owing, plus interest.”
For information on the Voluntary Disclosures Program contact us and learn how Mark Feldstein & Associates can help you correct your tax affairs.
Joseph Cirillo, of Niagara Falls, pled guilty in October 2009 to seven counts of failing to file corporate income tax returns. He was fined $1,000 for each count. A CRA investigation showed that Cirillo failed to file corporate tax returns as the director of Done-Rite Paving Co Ltd and as the director of 1602013 Ontario Inc.
When individuals or corporations are convicted of failing to file tax returns, in addition to any fines imposed by the courts, they are still obligated to file the tax return and pay the full amount of taxes owing, plus interest, as well as any civil penalties that may be assessed by the Canada.
Individuals who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They will not be penalized or prosecuted if they make a full disclosure before the Agency starts any action or investigation against them. These individuals may only have to pay the taxes owing, plus interest.
For information on the Voluntary Disclosures Program contact us and learn how Mark Feldstein & Associates can help you correct your tax affairs.