Protect yourself from tax protester schemes. These schemes involve individuals who try to convince other Canadians to not pay their taxes. The CRA is increasing their efforts to audit and prosecute promoters of tax evasion schemes. It's important to know these facts:
Fact 1 – You are not two people for tax purposes. One of the false arguments these tax protesters use is the natural vs. legal person argument. They define the natural person as the individual that performs the labour required for the income and the legal person as the legal entity that the federal government creates by issuing a social insurance number. These tax protesters allege that only the legal person has to file an income tax return and therefore your earned income is not subject to Canadian income tax.
Fact 2 – All tax protester arguments have been rejected by the Canadian courts.
Fact 3 – Participating in these schemes will have serious financial and legal consequences for you.
Fact 4 – It's not too late to correct your mistakes. Under the Voluntary Disclosures Program, you may be able to avoid being penalized or prosecuted if you make full disclosure of any tax evasion scheme you have participated in before any audit or criminal investigation has started. You may only have to pay the taxes owing plus interest.
Fact 5 – When it comes to your tax affairs, get independent advice form a reputable professional.
Learn more about tax protestor schemes at the Canada Revenue website.
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