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CRA’s Tax Evasion Investigation goes Middle-Class

14 August 2013

For several months now Canadians have known about the massive investigation performed by CRA (Canada Revenue Agency) that’s been trying to expose tax cheats. Up until this point the investigation has mostly focused on offshore tax accounts, and multi-millionaires that are simply trying to hide their money from the government so they don’t have to pay erroneous taxes on it. Now though, while the CRA still focuses on this elite group, they’ve also turned their attention to another group that may not be paying their fair share of taxes – the middle-class.

“The big focus so far has been on high net worth projects, as well as offshore tax evasion,” says Jamie Golombek, managing director of CIBC Private Wealth Management. “But one area government can always go after is compliance. Why don’t we get the existing Canadians who are not paying their fair share of taxes to comply and pay up?”

And that’s just what the Canadian government and CRA is doing. In addition to those that simply have overdue balances with the CRA, But there are two other groups that are being brought into focus now as well. Those are individuals and businesses involved in the “underground economy” – that in which commercial activity takes place, but it’s never reported to the government.

Individuals in this category may be serving staff in restaurants that don’t claim their tips and gratuities to the government. A CRA blitz in St. Catharines, Ontario recently just flushed out $1.7 millioon in tips; while a similar project in Burnaby, B.C. took on “curbers” – individuals that sell used cars on auction sites such as Craigslist and never report those earnings.

In addition to the “underground economy,” the CRA also looked at businesses in remote areas of northern British Columbia and the Yukon. These industries included pilot car drivers, the individuals who guide oversized and overloaded trucks on remote raods; as well as mobile first aid staff who provide paramedic services at remote job locations. “Hot shots,” couriers who deliver packages to these remote locations, were also investigated.

“Much of the work occurs in remote and sparsely populated areas that traditionally have limited visible interactions with the CRA,” the agency’s report stated. “It can be very challenging to meet with them.”

But that doesn’t mean that they won’t. Or that wait staff in other parts of the country are safe either. As the CRA gets even more serious about collecting taxes, one thing is clear – Canadians need to be paying their taxes.

“If you’re out there,” says Golombek, “you should be paying your fair share of taxes. Even if you are paid in cash, or even if you live off the grid in remote parts of Canada. If not, we’re going to get you.”

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