Tax & Trade Blog
Can I Go To Jail For Tax Evasion?
Over the past number of years the CRA has been taking an increasingly aggressive stance against Canadian taxpayers who don’t meet their tax obligations. This approach has only intensified – and perhaps very rightly so – since the Panama Papers scandal broke. Since then the Canadian government has earmarked an additional $444.4-million between 2016 and 2021 to help the CRA crackdown on tax evaders.
In years past, tax evaders caught by the CRA could expect hefty fines and penalties, but would rarely face jail time. More recently however the CRA has been trying to put people engaged in tax fraud or tax evasion in jail.
In a recent example a taxpayer was found guilty of fraud and tax evasion and sentenced to 11 years in prison. In addition to jail time the taxpayer was ordered to pay $1.8 million in restitution to the victims of his Ponzi scheme and a $550,000 fine. If the taxpayer fails to pay these fines, his prison sentence is to be extended for an additional four years. [Read more about the case by clicking here].
As the federal government prosecutor in the case cautioned: “Tax evasion is one of the things that undermines the fabric of what holds this country together, which is that we share what we have...when someone exempts himself from that obligation to share what he has… the penalty that's imposed for that should be sharp."
This seems to be the CRA’s current approach, and it is hard to knock that, at least from the perspective of other compliant taxpayers – as taxes pay for the benefits that we all enjoy as citizens of this great country.
Taxpayers finding themselves wondering about this sort of possible exposure should contact legal counsel immediately. Legal counsel is important as a taxpayer in this situation wants the protection that Solicitor Client Privilege offers, and that can only be obtained from a dues paying lawyer, in a solicitor-client relationship.
One option might be to seek tax amnesty and avail oneself of the CRA’s Voluntary Disclosure Program, which can be still be initiated on a no-names basis – although that may be changing soon! (Again, Solicitor-Client Privilege should be secured if proceeding on a no-names basis).
Read more about the CRA’s current plans for changing Canada’s Voluntary Disclosure Program here.