Tax Prosecutions

Tax evasion and falsifying or filing misleading information in tax returns can result in criminal or quasi-criminal charges with severe penalties including hefty fines and sometimes even jail time. This is a complex category of offences involving overlapping areas of law and multiple statutes.


What are Tax Prosecutions?

Tax Prosecutions Lawyer in Toronto Ontario

Benjamin Franklin once quipped: "In this world nothing can be said to be certain, except death and taxes."

The majority of Canadian citizens pay their taxes. To help prevent the minority from evading payment, the Canadian Revenue Agency operates a regular compliance program. Tax Evasion, Filing a False or Misleading Statement or Failure to File are among the most common offences charged by the CRA. These offences should be taken extremely seriously.

Individuals convicted of tax evasion can face serious penalties, ranging from fines to imprisonment. Fines typically range from 50 percent to 200 percent of the taxes evaded. In the most serious cases, an individual may be charged with fraud under the Criminal Code. If convicted, this offence can carry a jail term of up to 14 years.

The Income Tax Act is one of the more elaborate areas of the law. Working with the CRA's Criminal Investigations Program, for the 2015-2016 fiscal year, federal prosecutors had a conviction rate of 88%.

If you are being investigated by the CRA, it is imperative to have the proper legal support to protect your interests. Individuals facing a tax prosecution should enlist the assistance of a law firm with in depth knowledge of tax law, as well as experience in the defence of criminal law. In cases such as these, knowledge of the Income Tax Act and the Criminal Code is required.

We have the experience, track record and resources to take on such cases. Whether the case is at the beginning of an investigation with the Canada Revenue Agency or after charges are laid, whether you are an individual or a business, Caramanna Friedberg LLP can provide comprehensive advice and passionate advocacy.

Please feel free to all us at (416) 924-5969 for a consultation with experienced counsel.

See also, environmental prosecutions, quasi-criminal prosecutions, fraud

Frequently Asked Questions

The CRA can ask business owners for their complete banking records where a CRA assessment suggests that a business may have unreported income. The CRA can also request the banking records of the individual's spouse.

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Tax-related offences are governed by the Income Tax Act, Excise Tax Act, and the Criminal Code. If convicted under the Income Tax Act, one can face severe fines, as well as imprisonment.

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Under the Income Tax Act, the CRA has four years from the date on your Notice of Assessment to go back and conduct an audit. However, this rule does not apply where the CRA believes tax offences have taken place. The CRA has the discretion to look further back if there is reason to believe offences have been committed or if one has been convicted of an offence, such as tax evasion.

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Tax prosecutions deal with both criminal and quasi-criminal (regulatory) offences. Tax Evasion, Filing a False or Misleading Statement or Failure to File are among the most common offences charged by the CRA. These offences should be taken extremely seriously.

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If facing charges under the Criminal Code, if the Crown is unable to prove the essential elements of the particular offence beyond a reasonable doubt, they will have failed to discharge their burden, and the accused will be acquitted.

There may also be a Charter violation argument in a tax offence case. Under the Canadian Charter of Rights and Freedoms, individuals are afforded specific rights, including:

  • the right against unreasonable search and seizure;
  • the right to not be arbitrarily detained;
  • the right to be informed promptly of the reasons for arrest;
  • the right to retain and instruct counsel without delay; and
  • the right to be tried within a reasonable time.

In cases where a search warrant was executed, the defence may be able to challenge the validity of the search warrant and/or argue that there was an illegal search and seizure. There may also be a violation of one’s rights to counsel. A successful Charter challenge may also result in a stay of proceedings, or evidence from your case being excluded.

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Individuals convicted of tax evasion can face serious penalties, ranging from fines to imprisonment. Fines typically range from 50 percent to 200 percent of the taxes evaded. In the most serious cases, an individual may be charged with fraud under the Criminal Code. If convicted, this offence can carry a jail term of up to 14 years.

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Individuals convicted of tax evasion can face serious penalties, ranging from fines to imprisonment. Fines typically range from 50 percent to 200 percent of the taxes evaded. In the most serious cases, an individual may be charged with fraud under the Criminal Code. If convicted, this offence can carry a jail term of up to 14 years.

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As a Canadian resident receiving taxable income, you are required to file an Income Tax Return each year. If you have several years of outstanding returns, the CRA can issue a Notice of Assessment. These assessments often require you to pay more tax than you would have had you filed properly, as the CRA will select the highest earnings bracket (since they do not have your actual income to base it off of). You may also be required to pay late filing fees.

The Canadian Revenue Agency operates a regular compliance

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It is an offence under the Income Tax Act to file false or deceptive statements or make false or deceptive entries on an income tax return. The penalties include substantial fines and potentially jail time, with a maximum punishment of 2 years imprisonment.

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