Category Archives: CRA Tax Fraud

Unreported PayPal Business Income

 

Recent news alerted all Canadian online business owners that their PayPal Business Accounts will be handed over to the CRA. This will have serious tax consequences if they have Unreported PayPal Business Income. This news is a result of the Canada Revenue Agency (CRA) moving forward to aggressively address non-compliance specifically unreported income or underground economy.

This news sparked wide spread of panic and fear amongst previous calm and orderly online Canadian business community. The reasons are obvious:

The disclosed files could allow the CRA to identify people who have Unreported PayPal Business Income meaning that had business income from PayPal that were either never reported or under-reported. Further more,  for those online businesses with more than $30,000 in business revenue over 12 months, which means they should be registered to collect and remit the GST/HST.

This disclosure also may identify people or corporations who owe corporate or personal income taxes. If caught Unreported PayPal Business Income, they will have to pay the tax, plus penalties and interest. If the tax avoidance is deliberate, it could be considered tax evasion and result in a criminal charge.

 

Unreported PayPal Business Income 911

 

Unreported income with Unreported PayPal Business Income is regarded as tax evasion which can result in a range of civil or criminal penalties. Do not allow this mistake to become a crime that cannot be retracted, act now before CRA sends you a notice!

You need to quickly come to us before CRA initiates any action against you for Unreported PayPal Business Income.  As soon as CRA initiates the contact, then it is too late. It could be one letter in the mail, one phone call, one personal visit, etc.

The CRA can initiate criminal charges against individuals and businesses that are suspected to intentionally evade taxes for their Unreported PayPal Business Income. A conviction in such cases usually results in a fine of up to two hundred percent of the tax evaded or imprisonment of up to five years.

If you have done similar maneuver in your taxes with Unreported PayPal Business Income, then you need to seek independent and professional advice from reputable tax firm that specialized in tax crisis relief!

If you have Unreported PayPal Business Income, then you cannot afford to wait any longer! Do something to resolve your tax problems TODAY!

We have helped clients in reducing their tax damage and negotiated excellent settlement for them. Do you need protection services for Unreported PayPal Business Income outside Canada? We have helped Canadians from all over the world to repair the damage caused by their Canadian tax problems.

Our initial consultation is FREE and CONFIDENTIAL. You will get comprehensive analysis of your tax problems and recommended solutions in the first meeting. Then you can decide what to do from there.

The Difference between Tax Evasion and Income tax Fraud?

There is a significant difference between the concept of income tax evasion and that of an income tax fraud. A comparison can be done by drawing a parallel to the Government of Switzerland and its tax treaty with the United States of America. For example, the Swiss Government will shield its largest bank from the investigative clutches of the tax authorities in the case of a tax evasion concept while an income tax fraud will signify a person who holds a Swiss bank account for the purpose of hiding illegal wealth.

To expand the example further, Switzerland is a place with full tax jurisdiction but it is also famous for its secrecy laws in the banking sector. About five years ago, the United States Justice Department deferred the prosecution of UBS AG, the largest Swiss Bank, in exchange for the revelation by the bank of the identity of about three hundred clients who were resident of USA. The bank, ultimately, acknowledged its contribution and participation in the violation of the laws of the United States. Secrecy or no secrecy, such principles or schemes contribute in defrauding the country from where the residents store their illegal and undisclosed wealth in Swiss banks, amounting to an income tax fraud.

Even then, the deferral of the criminal prosecution did not hold back the IRS from chasing claims against the U.S. taxpayers. IRS issued summons to UBS AG Bank asking for confidential information on not one but fifty two thousand accounts with an approximate value of about fifty billion dollars in assets. The Swiss Government, as expected, refused to help with the summons by declaring that such acts violated the Swiss banking secrecy laws.

There was another quaint angle to these proceedings. The U.S.-Switzerland Tax Treaty calls for information exchange requiring respective tax authorities to share the tax information for avoiding an income tax fraud. The Treaty, however, provides that neither parties is obligated to execute administrative measures that are in conflict with their domestic regulations and legislation.

The difference between income tax evasion and income tax fraud could be explained by this incident in full. The summons from IRS to the UBS AG Bank have given rise to a legal battle on an international front that are testing the tax treaty obligations against the laws of banking secrecy. The Swiss government has drawn the line on the difference by maintaining that tax evasion cannot, by itself, be evidence of an income tax fraud.

The big conjectural question on this issue is that the UBS AG Bank has admitted being guilty to activities that resulted in the deferral of the criminal prosecution, but it holds its ground at the same time that an income tax fraud is not the same as tax evasion by not disclosing the requested confidential information.

The vital distinguishing feature of an income tax fraud is an intent by the taxpayer to defraud the government by not paying the taxes which are lawfully due. An income tax fraud is punishable by both civil and criminal penalties. The government has to show the burden of proof to determine the case of an income tax fraud by a taxpayer. Practically, if the taxpayer has a reasonable legal argument to back up why he or she has not paid the due taxes, it is likely that the taxpayer will escape criminal charges.

The Tax Evasion Canada Program with Whistle Blower Rewards

The 2013 CRA budget announces the CRA’s initiative to encourage Canadians to provide relevant information identifying tax evasion especially for international tax evasion. The latest changes in the `Stop International Tax Evasion Canada Program will enable the CRA to reward those individuals who have knowledge of major cases in tax non-compliance on an international level. The incentive will be as much as fifteen per cent of the income tax amount collected on account of the information that has been provided. As per the Statistics Canada Bureau, the Canadian funds in the biggest tax havens in the world have gone up to a record one hundred and seventy billion dollars.

The fifteen per cent rewards in the tax evasion Canada Program are going to apply only to those tax assessments or the reassessments on the international transactions which are over one hundred thousand dollars. So far, the federal government has been able to convict only around forty people with offshore tax cheating through the tax evasion Canada Program since the past eight years and the total amount of fines that have been levied are about seven million dollars in taxes that had been evaded.

The new changes in the tax evasion Canada program system are going to bring Canada in line with other important countries like the United States of America, Germany and the United Kingdom. The new kind of reporting criteria is going to require the banks, the co-operative societies and the credit unions along with the loan and trust companies to report to the CRA. The reporting will include all incoming or outgoing electronic fund transfers of ten thousand dollars and above. These standards will be the same as set by FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada.

Presently, individuals, corporations and trusts who are owning foreign investment properties costing more than one hundred thousand dollars have to file a Form T1135. The CRA does not have the power to reassess these people for additional tax after the normal assessment period. The relevance of the voluntary disclosure program has been increased. It will allow the taxpayers to come forward proactively to disclose any non-compliance in the past, resulting in penalties getting waived. The interest which is assessed on the tax will get reduced. The potential criminal prosecution for tax evasion Canada also gets waived.

It has to be remembered that the tax evasion Canada prosecution is a criminal one. This kind of case is prosecuted under Section 239 of the Income Tax Act. There are a couple of ways that this kind of prosecution can proceed. One is by means of a summary conviction that carries a potential penalty of a fine which is not less than fifty per cent and not more than two hundred per cent of the tax amount that was evaded. Imprisonment can also be charged for a term not exceeding two years. The second kind of prosecution is by indictment that carries a penalty of not less than one hundred per cent and not more than two hundred per cent of the tax amount which was evaded with imprisonment not exceeding a period of five years.