How does the Canada Revenue Agency find out about undeclared income?
- Author Paul Mangion
- Published May 8, 2012
- Word count 543
The Canada Revenue Agency is extremely resourceful when it comes to finding out about undeclared income. The age of technology has made it very easy for them to find out information and when they do they will come after the taxes that they believe that you owe. So how does the Canada Revenue Agency find out about undeclared income?
Here are some of the common ways that the Canada Revenue Agency can find out that you have earned income that you haven't declared:
• Audits. When one company is audited it often triggers a chain reaction. If you are self-employed and have performed services or worked for a company who is audited, the Canada Revenue Agency will often look at invoices and cheques that have been paid to other companies and then check to see if the other company is up to date in their tax filings or if the amounts of the invoices exceed the companies declared income.
• Tax Slips. Many contractors assume that because they are paid by cheque that the CRA won't know about their income until they file a tax return. Companies must file a T4A for each contractor who they paid during a given tax year that includes the amount of income paid to the contractor for that tax year.
• CRA Snitch Line. The CRA has an anonymous phone number where people can report friends, family members, colleagues, suppliers etc… who have undeclared income. Commonly ex-spouses and business partners will exploit these services to wreak havoc on another which they once had a relationship with and now hold ill will towards them.
Once the CRA thinks that you may have undeclared income the real trouble can start. If you are up to date in your tax filings they can audit or re-assess your tax returns. If you have not filed a tax return they can file a notional assessment which is filing your return on your behalf and then assessing income and taxes that you will owe. They will add penalties to any tax that you owe in association to undeclared income and charge interest on the tax debt and penalties retroactively. This can double and even triple the size of a tax debt.
So what can you do if you have undeclared income? First, don't wait until the CRA catches up to you. If you know you have undeclared income, if you come forward and declare it under the voluntary disclosure program before they contact you about the undeclared income; you can avoid interest and penalties altogether. Organizations that specialize in helping people with tax problems can make an application from you under the voluntary disclosure program on your behalf.
If the CRA is already pursuing you about undeclared income, hire representation immediately. A representative who is skilled at working with taxpayers who have tax problems can act on your behalf to help you become tax compliant.
The worst thing you can do is ignore the problem because it won't go away by itself. Failing to declare income is tax evasion under the income tax act and the CRA has many tools at their disposal to come after you including criminal prosecution. Time is your enemy and the faster you deal with your undeclared income the better!
We Solve Tax Problems! Call 877-718-4848 for a FREE Consultation - Past Due Returns? Undeclared Income? Need Tax Relief? Stop Tax Collections - We Can Help! Don't Wait Until It's Too Late.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Smooth Skin Ahead: How to Remove Skin Tags Safely and Naturally.
- Smooth Skin Ahead: Natural Paths to Reducing the Appearance of Scars.
- The Art of Carved Doors: From Rustic Charm to Modern Elegance
- The Pediroller: A Simple Tool with a Profound Impact on Foot Health
- Fading Scars Naturally: How to Restore Smoother, Even-Toned Skin.
- Say Goodbye to Skin Tags Naturally: A Complete Guide to Gentle Removal.
- Refresh Your Home with the Carefree Spirit of Boho Decor
- The Charm of Modern Farmhouse Décor
- Luxury That Lasts: Why Happy Feet Flooring Is a Smart Investment
- The Real Reason Bamboo Pajamas Cost More—And Why GYS Makes Them Worth Every Penny
- Mastering Camera Support: How Precision Fluid Heads Transform Cinematic Movement
- Color Reproduction and Skin Tones — The Real Challenge for Modern Cinema Lenses
- The Use of Electric Callus Removers: A Modern Approach to Foot Care
- Clearer Skin Naturally: The Complete Guide to Safe and Effective Skin Tag Removal.
- Fading Scars Naturally: How to Restore Smoother, Even-Toned Skin.
- Varicose Veins Demystified: From Early Warning Signs to Proven Relief.
- Clearer Days Ahead: How to Effectively Treat and Manage Rosacea Symptoms.
- The Death of Expertise: Navigating the Political Landscape
- Hospitality Meets Worship: Church Carpet That Welcomes
- Using Toe Straighteners to Help Foot Problems
- Emerging technologies shaping the future of digital
- Do Magnetic Eyelashes Actually Work?
- Why Bamboo Pajamas Are Worth It: Comfort, Health, and Sustainability with GYS
- Use of podiatry felt to treat foot problems
- Soothe the Red: Proven Treatments and Everyday Solutions for Rosacea Relief.
- Breaking Free from Heavy Legs: A Complete Guide to Varicose Veins.
- Automatic Driving Lessons in Glasgow: Your Top Questions Answered
- How Carpet Runners and Wool Rugs Transform Stairs, Halls, and Rooms
- When Detail Becomes the Story: Macro Lenses in Narrative and Commercial Filmmaking
- 10 Simple Ways To Make Your Office More Secure