Would you cheat the taxman?
(NC) One in five Canadians knows a tax cheat, but more than half would not report this person to the Canada Revenue Agency (CRA), according to a recent Leger survey conducted by H&R Block Canada.
“Cheating on your taxes has serious consequences no matter how you file your return,” says Cleo Hamel, a senior tax analyst at H&R Block Canada. “The best way to pay less tax is to take advantage of all legal avenues that are available.”
Hamel says that one of the most important steps in filing a tax return is to report all income. “The CRA receives copies of every T slip issued, so no matter whether you leave out a slip intentionally or accidentally, it will be uncovered by the CRA's matching program and you will be reassessed.”
If this happens twice in a four-year period, Hamel says you could face stiff penalties.
Claim all of your available credits, but taxpayers are urged to claim credits correctly. “Whether you file yourself or have someone else prepare it, understand your return,” she says. “Once you sign your tax return, you are solely responsible for it.”
There are some credits that are more likely to be reviewed than others, such as moving expenses. You should not be worried about making a claim as long as it is a valid expense and you have supporting receipts.
Claiming expense amounts that may seem unreasonable will automatically trigger a review as well. Claiming 95 per cent of your vehicle expenses for your business will likely result in the CRA asking to review your logbook.
Your past tax compliance may also impact whether or not you are audited. “If you have cheated on your taxes before, the CRA will be watching you closely,” says Hamel. “On the flip side, if they conduct a random review and find that you filed an honest and complete return, they may ease up on you in the future and redirect their attention and resources elsewhere.”
More information is available online at www.hrblock.ca.
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