Canada’s Income Tax Act contains a number of serious offences. The most serious charges are in paragraph 239(1) of the Income Tax Act.

Under this provision, it is an offence to make a false or deceptive statement in a tax return, certificate, statement or answer filed or required by the Income Tax Act.

It is an offence to destroy, alter, dispose of your books of account if that is done with the intent of avoiding tax.

It is an offence to willfully evade compliance with the Income Tax Act or the requirement to pay taxes.

It is an offence to conspire together with someone else to do any of the above.

These are the primary offences that can lead to criminal prosecution. There are also a number of important regulatory offences.

Is Tax Evasion a Criminal Offence in Canada? Can I get a Criminal record for Tax Evasion?

The answer to these questions is “yes”. An offence prosecuted under the Income Tax Act is prosecuted as if it were an offence under the Criminal Code of Canada.

Are there any Defences Available to Tax Evasion Charges?

Yes. Every case is different and an experienced tax evasion defence lawyer should assist you with your case. However, here are some defences that may apply to your case.

• Accounting – If you relied on your accountants and the accountants were negligent, you may not have the guilty mind to justify a conviction.
• Age, Infirmity – This defence will only succeed in the rarest of occasions where a disability is the actual cause of the tax evasion.
• Negligence – In extreme cases, a tax payer may be able to establish that the failure to comply with the Income Tax Act was part of an overall pattern of neglect and lack of sophistication.
• Ignorance, Mistake of Law – Again rare, in some cases it may be able to argue that aggressive tax planning that crosses the line unintentionally does not create the guilty mind required for a criminal prosecution.  This is the “honest but mistaken belief” defence.
• Limitation Periods – For summary conviction offences, there may be a limitation defence.
• Estoppel – Described as “elusive” by one commentator, there may be a defence available in certain limited situations where tax found to be owing by one tax payer (such as a corporation) is then also assessed against an individual tax payer.
• Due Diligence – If the tax payer is required to file a notice or other return and places it in the hands of his or her accountant, and the accountant fails to complete the required work, a defence of due diligence may be made out in some circumstances.
• Permissive Deductions – This defence refers to situations where it turns out that the tax payor’s income was not actually underreported because there were deductions which could have been made.
• Duplicity – This defence essentially means that a tax payor cannot be charged with more than one offence in the same count on an indictment.
• R v. Kienapple – You cannot be convicted more than once for the same offence.

Is there any Other Way to Challenge my Tax Evasion Charges?

Yes. Your criminal defence lawyer may be able to advance an argument that there has been a breach of the Canadian Charter of Rights and Freedoms. In particular, your lawyer will examine whether the gathering of evidence against you violated your right against self-incrimination. The relevant sections of the Charter in these cases are 7, 8, 10, 11 and 13.

If the Court finds, as it sometimes does, that the evidence was improperly obtained by the State, s. 24 of the Charter may apply. In some cases that evidence will be excluded.

The Crown (government) also has an obligation to disclose to the accused tax payor all relevant information relevant to the defence of the charge. Failure to comply with that obligation may also lead to a Charter breach.

Similarly, excessive delay in the prosecution of the charge may lead to a remedy under the Charter. In some cases, delay will lead to a stay of the charges.

If you or someone you know is being investigated or audited for suspected tax evasion charges, you need advice from an experienced criminal defence lawyer with a practice in tax evasion defence. Richard Auger at Auger Hollingsworth is currently meeting with selective clients with criminal tax problems or prospective criminal tax problems.

The potential penalties for tax evasion include fines, imprisonment, or sometimes, both.  The amount of the fine is usually in proportion to the amount of taxes an individual was trying to evade.  Depending on the particular circumstances and the seriousness of tax evasion, the penalties can be quite severe.  Failing to file your income tax return is usually considered to be a lesser offence with fines ranging from $1000 – $25 000.  You may also face up to twelve months in prison for not filing your taxes.  Again, this varies on a case by case basis so it is best to speak with an experienced Ontario criminal lawyer if you are facing tax evasion charges.

Making a false statement on your income taxes is more serious.  Someone who makes a false or misleading statement or intentionally tries to avoid paying taxes will usually receive a fine in the amount of fifty to two hundred percent of the amount of tax that was supposed to be paid.  An individual may also receive up to two years in prison for making a false statement on their income tax return.

Tax evasion also includes claiming false credits or deductions that an individual is not really entitled to.  This also includes conspiring with another person to claim false deductions.  The penalty for this kind of tax evasion is similar to making a false statement since the individual receives a fine between fifty and two hundred percent of the amount of tax that would be assessed if the individual had not tried to make a false deduction.  A prison sentence of up to two years can also be added as a penalty.

As you can see, tax evasion is taken seriously in Canada so it is important to file your income tax returns properly.  There are a number of services that exist to help individuals file their taxes so feel free to take advantage of this help.  If you are facing tax evasion charges, you should hire legal counsel to represent you.  The Ottawa criminal lawyers at Auger Hollingsworth can help your defence against tax evasion charges.

Although you may have had a good relationship with your accountant, it is important that you do not discuss your charges with him or her. This is because your accountant could potentially unwillingly become a witness against you in court. If this happens, you don’t want them to have anything to say against you.

The Canada Revenue Agency or the prosecutors can use your accountant as a witness in court. In fact, your accountant could be compelled to be a witness for the prosecutors, even if he or she doesn’t want to. If called as a witness, your accountant would have to honestly answer all of the prosecutor’s questions and will be required to tell the court everything that you shared with him or her. This could potentially damage your case so it is important that you do not give any information about your charges or your case with your accountant.

If you are charged with income tax evasion, the first thing you should do is enlist the help of an experienced criminal defence lawyer. If your accountant is interested in your case and wants to know details, even if they offer their “help”, it is best if you politely tell them that you are unable to discuss your case with them. It is possible that you will be able to resume contact with your accountant at a later date, but until your lawyer advises you in this way, refrain from discussing your case with your accountant. This is one way that you can do all that you can to ensure your defence is as strong as possible.

Some may think that tax evasion is a crime committed exclusively by wealthy individuals or businesses, but in reality, offences against Canada’s Income Tax Act are more common than you might think.  Whether intentionally or accidentally, many individuals fail to file their tax returns, submit their returns late, or fail to report income on their returns.

It is very important that you complete your tax return forms properly in order to avoid any criminal charges.  In the event that you are charged with violating the Income Tax Act, contact a criminal lawyer who can help you create a defence for your case.

If you are charged with violating the Income Tax Act, you may have recourse to one or more of the possible defences available to those charged with tax evasion.  If you are found guilty of the offence, you will likely be responsible for paying the tax as well as any related penalties and interest.  In some circumstances, individuals can receive a criminal sentence in addition to these financial penalties.  These criminal sentences can include additional fines as well as time in prison.  Your lawyer will be able to advise you and defend your charges appropriately, based on the specific nature of your case.

One common question we hear is: “Do I need to get help from a criminal defence lawyer if I am being audited or investigated for an Ontario tax evasion offence?”

That’s a tricky question to answer because charges have not necessarily been laid yet. Why hire a criminal lawyer if you are not facing any charges under the Criminal Code of Canada? I wrote a new article to explain why you absolutely should get a criminal defence lawyer’s help at this stage in the process.

One mistake people make is that they believe their accountant can help them. This can be a fatal error. I have seen cases where the client’s accountant is forced to testify against the client.

 You can read it here on the site: Canada Revenue Agency Investigations and Hiring an Ontario Criminal Lawyer.

An audit or investigation by the Canada Revenue Agency is to be taken seriously – it can be just as complex and stressful as many criminal investigations. Why not take some of the burden off of your own shoulders and let a top criminal lawyer help you fight the accusations early on?

If you are being investigated or audited by the Canada Revenue Agency for possible tax evasion, you need to get legal help from an Ontario criminal defence lawyer sooner rather than later. For more information, contact the Ottawa lawyers at Auger Hollingsworth by email info@ottawalawfirm.ca or by phone at (613) 233-4529.

• Income is understated in order to reduce income tax payment levels.
• Income goes unreported, even though it was allegedly received by the individual.
• Ontario Harmonized Sales Tax (HST) is not remitted even though it is owed.

If the Canada Revenue Agency flags your tax returns, their next step may be to audit or investigate you for tax evasion activity. While there may not yet be any criminal charges at this point, it is crucial that you seek the help of a top criminal defence lawyer sooner rather than later.

Wondering why you need a lawyer even though you haven’t been charged? Here are a few good reasons:

1. You need the help of someone who thoroughly understands the Agency’s guidelines, practices, and structure, and who has experience dealing with them.

Your objective at this point is probably to clear yourself of any involvement in a tax evasion scheme. I must emphasize that this is not something you are equipped to do alone – the Agency’s structure and methods are complicated and you might even accidentally say something that hurts your situation. Let a top criminal lawyer deal with your charges early on and on your behalf.

1. It’s always smarter to start building your defence as soon as possible.

Don’t lose valuable preparation and fact-gathering time by waiting until you have been charged – get a lawyer who can help you figure out what information is necessary, and help you start to gather that information immediately. You and your lawyer can use these facts and evidence to defend yourself if you are eventually charged.

1. A lawyer understands your specific tax evasion case.

A top criminal defence lawyer knows the rights you are entitled to when being investigated by the CRA and can ensure your rights are protected. Without proper legal representation, your rights may be violated without you ever knowing it.

If you are being audited or investigated by the Canada Revenue Agency, choosing the best criminal lawyer to represent you is an important decision. For more information, contact the Ottawa white-collar crime lawyers at Auger Hollingsworth by email info@ottawalawfirm.ca or by phone at (613) 233-4529.

If you are ever arrested by the police for a crime like fraud, tax evasion, assault, impaired driving or even homicide, the worst thing you can do is to talk to the police about “what happened”.  Protesting your innocence to the police will not get you anywhere and may make things much more difficult for your criminal defence lawyer.

Instead of trying to talk your way out of the criminal charges, politely but firmly indicate that you would like to speak with a criminal defence lawyer.  You really should not say more than that.  Even small comments can be used by the Crown against you in a trial.

Make the most of your telephone call with a criminal defence lawyer.  Keep in mind that you do not only get one call as they say on television.  If you do not reach your counsel of choice, in many cases you can leave a message for a return call or select another lawyer of your choice to try to call.

During the call, the lawyer will probably not want you to talk about the nitty gritty of your case.  Instead, the criminal defence lawyer will want to explain to you how to cope with the arrest process and what to expect.  The strategy for defending against the charges will be developed after the arrest process is completed and you are either released on bail or moved to the detention centre.

While your arrest is processed, you may be placed in a holding cell.  In Ottawa, most areas of the cell blocks are video taped. In some circumstances there may be audio as well.  Your behaviour during that process will be recorded.  Accordingly, you should be calm, cool and collected.

An arrest for a criminal charge is scary and undesirable.  However, with thoughtful advice from an experienced criminal defence lawyer like Richard Auger, the disruption to your life can be minimized.

• Home renovations;
• Gasoline;
• Internet & electricity bills;
• Consumer goods purchased from restaurants, bars, convenience stores, coffee shops, etc.

With that added pressure on Ontario consumers and their wallets, the temptation is greater to find methods of avoiding tax payments.

These “off-the-books” transactions are illegal and can attract criminal tax evasion. Before the introduction of HST you were required to pay sales tax on purchases, and you are still required to do so – even though the GST and PST have been harmonized.

In early July, the Toronto Star spoke with Ontario’s Revenue Minister John Wilkinson and published an article detailing his views on this subject: Province Warns of the Perils of HST Evasion.

In that article, Wilkinson points out that prosecuting tax evaders in Ontario is easier under HST. Under the old system, one case of suspected evasion had to be examined under two different tax systems at different jurisdictions.

Now that there is a harmonized tax system in effect, Ontario tax evasion cases can be prosecuted efficiently at the provincial level.

If you are being investigated or have been charged in connection with tax evasion in Ontario, it’s important that you speak with an experienced white collar crime and tax evasion lawyer who can help you fight your charges and understand your rights. For more information, contact the Ottawa criminal defence lawyers at Auger Hollingsworth by email info@ottawalawfirm.ca or by phone at (613) 233-4529.

The short answer is this: the Canada Revenue Agency (CRA) can and likely will prosecute you after you’ve committed tax evasion – even if you approached them with the intention of settling up.

In a recent online news release, the CRA briefly explained its policy regarding prosecution:

“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 valid disclosure before they become aware of any compliance action being initiated by the Canada Revenue Agency (CRA) against them.”

It’s true that you can attempt to make that voluntary correction through the CRA’s Voluntary Disclosures Program. But if the CRA has already learned of possible tax evasion– a good example being the HSBC banking information leak we blogged about last week – it may be a different matter.

If you’ve been evading taxes and the CRA has noticed this activity, you do not have the option of paying back the missed taxes. The agency usually does not hesitate to prosecute these knowing evaders, even if they try to come clean. It’s best to seek legal advice quickly.

If you are being questioned or investigated by the CRA about possible tax evasion, your first step should be speaking with a lawyer experienced in financial crime. For more information, contact the Ottawa criminal defence lawyers at Auger Hollingsworth by email info@ottawalawfirm.ca or by phone (613) 233-4529.

When an individual is evading taxes, or otherwise failing to follow guidelines under the Income Tax Act, the CRA is responsible for noticing the discrepancy and then acting on it. In cases of smaller discrepancies, this action consists of raised taxes, penalties, or interest charges.

But in some cases – ones where the CRA suspect tax evasion has been committed – the agency calls an audit or investigation of a taxpayer’s tax information. Our latest article, Canada Revenue Agency Audits and Tax Evasion, explains why and how the CRA conducts these audits and investigations. It also gives you some handy information on how to respond if you are questioned, audited, or investigated in connection with possible tax evasion.

The bottom line is that whenever you find yourself under audit or investigation by the CRA, it’s important to get in touch with a lawyer who has experience handling tax cases. That audit could lead to charges, and you’ll want someone in your corner who understands the Canadian law around tax evasion and the Income Tax Act.

If you have already been charged with tax evasion, it’s crucial that you hire a lawyer who is experienced with large-scale tax cases, and has a proven track record defending against accusations of white-collar crime. For more information, contact the criminal defence and tax evasion lawyers at Auger Hollingsworth by phone 613-233-4529 or by email info@ottawalawfirm.ca