If you fall for a tax scam, you risk your financial security and your identity. Also, you may not be meeting your obligations under Canada’s tax laws. The consequences of your action could range from embarrassment, to inconvenience, to serious legal trouble.
Keep these facts in mind
- The CRA does not use email to ask for personal information. Even though an email asking for personal information may look authentic, such email does not come from the CRA. This type of email is phishing, and it contains special coding or downloadable forms that are designed to steal your personal or financial information.
- The natural/legal person argument does not hold up in court. Promoters may try to convince you to treat yourself as two people—a natural person of flesh and blood and a legal entity created by government. Promoters argue that your income belongs to the natural person who is not subject to Canadian income tax law. These are false claims that do not hold up in Canada’s courts.
- You are responsible for the information on your return, even if someone else prepared it. Be aware of who you are dealing with at tax time and what their credentials are. Stay away from tax preparers whom offer you false, fictitious or fraudulent tax claims such as charitable donations, false child care expense claims, or false business expenses or losses. If you’re not sure if your claim is legitimate, get a second opinion from another tax professional, or contact the CRA.
- You can correct a past mistake. The CRA offers a second chance to make things right through its Voluntary Disclosures Program. If you make a valid disclosure before you are aware that the CRA has started any compliance action against you, you may only have to pay the tax owing plus interest, but not the penalties.
Even though scams may sound compelling and convincing, they are scams. In addition to high fees you may be asked to pay, scams are not legal and can cause serious tax consequences for you. If you make false claims on a return, the CRA can reassess it to determine correct amounts and you will have to pay interest on outstanding amounts. Also, you may be charged penalties and be prosecuted for tax evasion.
Don’t become a victim. Be informed. If you and your family have any tax related questions contact GB Pilley & Associates Ltd., Chartered Professional Accountants at 604 926 3522.