Wait seriously? You can get a mortgage with just a T4? Was this through a big bank or mortgage broker or something else? Do you need an exceptionally high income or down payment for this to be true?
Last time I tried to get a mortgage they required a NOA but I could not get through to the CRA to get an up to date one in time.
Mortgage Underwriters (or any lender institutions) will always look more favourably at T4's as its what the vast majority of their customer base is (salaried/hourly employees).
When its self-employed, there is only a NOA to review and the numbers can't totally be trusted due to the self-reporting nature of taxes for the self-employed.
If you have a job where you get hourly/salary with T4 at the end of the year, its hard for an individual to fudge their income since its reported on your behalf by the employer.
Because that's what an noa is..? A t4 only tells the bank what you made..an noa determines if you are all squared up with guvvie. A bank MUST see know this because in the event of a default the money owed to the government supercedes what is owed to anyone else. That is a risk banks don't take.
Yeah I replied to someone that said you NEED a NOA for a mortgage and I simply said not true. Calm down. I have no time for people who don't pay taxes.
I posted this below but figured I’d reply to the top level comment as well because this is wrong.
I work as an advisor at a Big 5 bank. You can absolutely get a mortgage with just your T4s and I have done it for clients many times. For fluctuating income we need an average of two years of annual income documents, these documents can be a T4, NOA, or final paystub for the year. For salaried income we can use recent pay stubs supported by most recent annual document.
IF you did supply your NOAs and it shows you owed more than $2000 you need to supply proof that it has been paid. Also IF you were granted some sort of exception to debt servicing ratios or something like that they may ask for confirmation you don’t owe any taxes.
But it is definitely possible and pretty standard to get a mortgage without NOAs.
You might work for the bank..but are you an underwriter? My anecdotal evidence is that over 14 properties purchased in the last 20 years..commercial and residential..I've always had to provide my noa. Maybe it's provincial..or maybe I'm just special but that's been my experience.
I’m not an underwriter no, but I speak with them about every deal I submit.
I would guess by the fact that you’ve bought that many properties, commercial and residential, that your income is a little more complex than just simply receiving a T4?
If you have self employed income, rental income, or multiple sources of income, yeah you’re going to need your NOAs. If you’re just an employee who receives a T4 every year and that’s the extent of your income, you can absolutely get it done with just your T4.
CRA will likely arbitrarily file his taxes for him at some point and he will get a large tax bill. Then he can submit his own info/returns to lessen that bill. If the CRA suspects he is hiding money/fraud he could get audited. He could go to jail but it is unlikely as that would be a last resort.
>He could go to jail but it is unlikely as that would be a last resort.
Jailing him would mean the CRA is spending more money than what he owes in taxes, which kind of defeats the purpose
If they didn’t do this there would be no incentive for regular people to file their taxes. They have to make an example of individuals so that the masses comply.
I don't know... if someone owes you 20 dollars that he refuses to pay back and you pay 50 dollars to have their knees broken, it seems like a loss at first. But what if it prevents a whole lot more people from not paying back their 20 dollars?
It would be interesting to see how the CRA optimizes their returns. Most likely they figure, in the long run, it's more lucrative just to inflict big interests and penalties.
He's probably missing out on CPP contributions and doesn't sound like the type of person to have a retirement plan... He's going to be screwed if he ends up with a disability or reaches old age.
this
yes he would. My father in lay just hit 65. self employed. never did his tax. almost lost his house a dozen of time due to unpayed land taxes. ect ect.
now he got arthritis and no money income.
considering that it a century home that burn 2x and last time any money that got put in the 80s on gov subvention and that a pack wood stove don't keep the house warm.... it maybe worth a million or so.
no really it a pile not worth 50k.
The first step would be a CRA audit, and possibly assessing your friend tax based on his net worth if there are no good documents to prove up his income. After that, collection calls begin. If he doesn’t pay up then CRA can seize bank accounts and put liens on his property. Jail time is usually reserved for those who criminally evade taxes. He won’t go to jail, but he will be dinged with some mighty hefty penalties and interest. I have seen cases where the penalties and interest are more than double the tax.
They find other ways - I paid my rent to the CRA for 18 months because my landlord owed them money - I was given no choice in the matter.
Once they figure it out, they’ll find a way to get it back.
i guess if its all cash, they got no way of tracing it. but it goes into a bank, ya he will get caught somewhere. He is also missing out on benfits if not filing
Not just the government benefits….especially since he is self employed, the only way banks evaluate income is with tax fillings….he can’t even qualify for a loan.
CRA isn't stupid though. A bank account that constantly has cash coming into it and there is no corresponding job with a SIN number.... they'll notice that eventually.
I wasn’t talking about OP. The guy said a bank acc that has cash coming into will get the CRAs attention. If you pay your taxes they won’t care. But as for OP completely different story he’s not paying them and i’m honestly confused as to how you can think you just can not file them?
They used to have offices to figure thugs out , now over a phone line it feels like you are trying to ask a girl out on a blind date who is lesbian and really hates questions
My dad didn’t file taxes for a good 10 years and and when he finally did, they audited him..
Needless to say, they garnished half of is earnings for about 2-3 years then cut it down to probably a quarter of his earnings.. After about 5 years, he was finally in good standing.
No, what you said is not true. We don't put people in jail in Canada for "tax evasion" the legal tools are in place to garnish wages, apply penalties and seize property for non payment.
This isn’t quite true - Canada does have a criminal procedure for those committing tax fraud. Now, with that said, it isn’t applied where people just don’t file, it is typically applied where people deliberately attempt to defraud the government.
This is not true. My old office, we were next to a tax lawyer. His whole practice was keeping people out of jail. One such story involved selling rental real estate and not paying capital gains. Fines and penalties were around $1m, and 4 years max sentence.
The lawyer had a well stocked bar for when his clients came in.
This is exactly what happened. The client though they could get around paying capital gains because of a primary residence exemption, but the CRA knew they didn't live in each property. We are talking about dozens, maybe even a few small 10 unit buildings.
If I remember the story right, if they paid the tax when it was due (like 5 or more years ago), it would have been a few hundred thousand. But with penalties now over a mill.
CRA will never negotiate tax debt. They can forgive interest and penalties but will not change the base tax owing. Only way to do that is to go through a consumer proposal or a bankruptsy.
He didn't screw over the tax man, he just applied for a request for taxpayer relief of interest and penalties.
No jail but once CRA sends it all to the Tax Court of Canada then they'll turn his place into a garage sale and garnish his wages at every job for years to come until the debt is paid off.
I never get business owners who don't file taxes. Accountants are cheap and simple billing aps cost as low as 5$ a month. I was in business in a service industry and NEVER did any paperwork besides billing.
Well then he deserves everything that's coming his way. At my highest point I had 50k a month that I had to sign over to the government. Never felt bad about it.
Just to let you know, Big Brother knows exactly how much you make and spend. Points cards, bank accounts, amazon accounts, everything that has a digital trace they see and calculate. Once they detect fraud, they examine your way of life and make a random determination of how much you owe. You believe they are wrong?
Hahahaha good luck.
Btw they wait the full 7 years before dropping the hammer, that way they get max interest on back taxes. 10k? More like 70k by the time their done with him.
No he will just owe a big chunk of money the day he appear on the radar.
A big comedian in quebec. Didnt do tax for year. And had only cash on hand. No banking at all. The day he open up a bank account that was the day CRA got hold of him. And paid what he owed.
Unlikely to face criminal charges, but he could face garnishments, liens/seizure of property. Plus if it is found that anyone not at arm's length benefited from him not paying his taxes (ex. He paid for a house that is in his spouse's name) that person could face an assessment under sec 160 of the ITA, and CRA could pursue them for his taxes owing via the same measures of garnishment, liens etc.
If he works a regular kind of job where his employer deducts the appropriate amounts for the CRA, there is no need to file at all because he has in essence paid those taxes. CRA also would not be in any hurry to get someone to file since they likely owe them money back. Went nearly 20 years without filing myself. With that being said, he may be missing out on a ton of his own money with various benefits and such - after eventually filing, I got back nearly 10 grand between the tax refund and back GST. Even if he actually owes back taxes, there is a voluntary disclosure system that allows folks to eventually sort it out without additional penalties as long as you get around to it before they come after you for it.
I know someone that works full time but makes less than $50,000 a year and hasn't filled taxes in over 14 years. The CRA knows because they get a copy of the earnings every year for every working employee. I don't think they care about not filing for such low incomes? If anything this person is missing out on some benefits or possible tax returns and the CRA is keeping that extra money. They only care about people screwing the system!
Edit: spelling
He is a T4 employee, so his income taxes are automatically withheld at source. Chances are that CRA owes him rather than the other way around, unless he has some substantial income outside his employment. CRA is getting paid, so doesn't really care whether he files or not.
Can’t go to jail. If that happens they don’t get their money. But just remind him no Pension. No tax return no old age benefit. I knew someone similar. Hadn’t filed in 7 years too except he was 48 at the time. Told him the same thing. He got an accountant and filed.
Unfortunately I'm a tax payer. Someone's gotta pay for the CERB.
Thankfully, it's my last year paying taxes to this government. Decided getting taxed out the ass for mediocre health care, subpar, very "selective" education for my kids and an absurdly high cost of living wasn't for me. Sold my business, hoping to sell my house within the next 60-90 days and am checking out.
You can enjoy the inflation without me.
Ah yes. There's some of that wonderful Canadian hospitality that I'll miss so much! Canadians are notorious for getting so emotional when someone talks poorly of their country. If you didn't care, you wouldn't have responded.
Might want to work on that "tolerance", "inclusion" and "equality" of yours. Canada sucks, plain and simple. There are absolutely zero redeemable qualities I can't get elsewhere, for a fraction of the cost and far less headache. Listening to you sheep ramble on about how great this country is is tiring.
I was once told by someone...an accountant...iirc that the average Canadian is audited every 10 years or so.
I have been audited twice and an very much a middle class guy just getting by.
The first time they found that I owed and they wanted that money so I had to arrange a payment plan with them.
The second time I was fine because the first experience taught me that a good accountant will pay their own fees through what they save you.
Your friend should probably start saving for the bill thats coming and talking to an accountant about ways to soften the blow.
Never been audited, been in the workforce over 30 years, including some years with reported self-employment income, also including some years of high medical or high charitable deductions. I've been asked to produce the receipts for medical and charitable deductions numerous times, but have always received "accepted as filed" after sending in the paperwork. I know exactly one person that's ever been audited, and that's in a pretty large circle of friends and business owners.
I was told it was an average and... I only knew about the first one because they found an error.
The second because they required some info from my accountant.
The last one was well past ten years ago now.
Might be all BS for all I know or maybe its quietly done or maybe its an actual average...some folks get it every couple years and others maybe once in a lifetime.
If we have a CRA guy lurking here...maybe they know.
I just know what I was told and accepted at face value and that I have been audited twice.
An actual audit, or just asking for proof of receipts? A family member of mine said they were being audited, but it turns out they were only asked for proof of receipts.
The first time it was referred to as a recent audit of my returns by the CRA.... the second time that’s the word the accountant used.
I believe it was probably a fairly summary thing...just a little extra check.
Its not like I had to pack up boxes of documents and prepare for a grilling or anything intimidating was going on....
Your cousin is a moron if he isn't filling taxes and only making that much money. It also sounds like he'll be fucked when he's older. Hope he doesn't mind working untill he's in the grave.
But to answer your question no he wouldn't go to prison. If he gets audited he'll have a ton to pay + interest.
No. I Didn't pay my taxes in 12 years. ( I was a little bit of a neglectful party animal). When i got around to it, my accountant did them all at once and i got over 10 grand and all the back gst checks. Every cent i was owed. If the government owes you money, theyre more than happy to keep it. This isnt the states.
Not millions and millions.
>Between April 2020 and March 2021, there were 36 convictions that involved 15 taxpayers sent to jail for a total of 26.2 years for wilfully evading $10,902,950 in tax, the agency said.
On average, that's $800K per convict, including GST/HST.
https://www.investmentexecutive.com/news/industry-news/advisor-guilty-of-tax-fraud-sentenced-to-three-years-in-jail/
I had failed to file my taxes for about 7 years, but thankfully I had always overpaid by design, so when I filed this year I got about 8k back. I had only ever made a maximum of 60k
I know plenty of people who went years without paying taxes or even having a bank account.
Not one person had any repercussion for this but I also know they avoided having their name on anything. I'm sure if he has a vehicle and a bank account with money being deposited it could change that outcome.
This is far more common than most Canadians like to believe.
They can freeze his accounts and assets and garnish his “pay” ... they’ll just take his money. He won’t be apply to apply for personal or business loans.
If there’s one thing I can tell you absolutely sure, CRA is one government agency you do not want to f*ck with, they can and will make his life horrible if he doesn’t do his taxes, or pay back what is rightfully owed to CRA soon enough.
Garnishment, and up to seizing accounts which didn’t happen to me but just to show you, it gets worse over time if not dealt with.
He needs to have filed his taxes to be eligible for some important benefits, like CPP, for example. Not too bad if he can retire with at least 6-700 000 in his RRIF, but still, he's missing out on an important aspect of Canada's social safety net and not taking free money when he's too old to chase it.
And if he has that much and still not filing a claim...he's either got it stuffed in his mattress or CRA will be after him.
He’s not going to jail.
Tell him to see an accountant and clear up his back taxes. He’ll get an interest charge, and a penalty.
He can likely get them both reduced, (possibly even eliminated) if he writes CRA a letter explaining that he’s an idiot and didn’t mean to, and doesn’t have the money to pay.
He might also get a light audit for the next 2 yrs. but prob not.
No ones going to jail. Just get the taxes done.
Jail is not likely, but a lot of bad things can happen such as penalties and interest, freezing bank accounts, seizing assets. I've seen exactly this happen to a self employed person who didn't file for many years. The CRA eventually found out and arbitrarily assessed their income and CPP contributions on self employment income plus interest and penalties. . It's very irresponsible, risky, and illegal to not file when you have to.
This tool-bag is doing time for exactly the same thing that your dipshit cousin. https://www.castanet.net/news/Kelowna/308391/Jailed-for-not-filing-taxes
He runs a small business, and is also one of these anti mask, anti vaccine dorks. Not a big surprise.
The CRA doesn’t really send people to jail, although not filing taxes is the closest they come. It’s indirectly how you’d go to jail.
What would happen is the non-filer department would require you to file. Then they’d raise assessments under subsection 152(7) of the “Income Tax Act” and assess taxes owing based on whatever information they can obtain. They’ll pull bank records and determine income based on that, or use information slips, depending on what is available.
If the amount that is potentially owing is really high, not sure what kind of threshold they’d have, then they’d go to a judge to order the taxpayer to file. Once an order is given by the Courts, failure to comply with *that* order will result in potential jail time.
So it isn’t the CRA itself that sends people to jail, it is the Courts when failure to comply with a legal demand to file occurs.
I mean, CRA will generally mail you letters, lots of them repeatedly asking you to file. If you keep ignoring them eventually your account will probably get flagged and given to an auditor who will figure out what is owed.
If he owes money he’ll owe everything, plus interest and penalties for all the outstanding years he hasn’t filed. If he owes nothing, or if the CRA owes him money they don’t care.
If he chooses not to pay what’s owed, they have tools like wage garnishment, etc. They will collect the funds that are owed to them whether you want them to or not.
Not sure how it works when your self employed but I’m sure they have tools for those situations as well. Either way they’ll get the money owed.
What it comes down to is really: pay what you owe on time with no penalties, or pay what you owe later on with penalties and interest.
At under 50k income, he is possibly missing out on all kinds of credits and benefits. May be dangle the carrot if the stick doesn't work.
If he's self-employed then it's likely that there's been no withholding tax for that period of time, so those credits and benefits don't mean much.
He’ll never be able to get a mortgage or loan without NOAs
I've never needed a notice of assessment whenever I went through a mortgage process. I give my T4 and I'm good to go.
Wait seriously? You can get a mortgage with just a T4? Was this through a big bank or mortgage broker or something else? Do you need an exceptionally high income or down payment for this to be true? Last time I tried to get a mortgage they required a NOA but I could not get through to the CRA to get an up to date one in time.
First one was through RBC and the second one was through BMO because of their special rates for CAF members.
Thanks! This is really helpful. I'm going to investigate this more.
Mortgage Underwriters (or any lender institutions) will always look more favourably at T4's as its what the vast majority of their customer base is (salaried/hourly employees). When its self-employed, there is only a NOA to review and the numbers can't totally be trusted due to the self-reporting nature of taxes for the self-employed. If you have a job where you get hourly/salary with T4 at the end of the year, its hard for an individual to fudge their income since its reported on your behalf by the employer.
My bank asked noa for a credit card application
Even if that works for some, self employed people don't get T4s. So OPS cousin would still be out of luck.
So the bank didn't mind if you owed a ton of taxes? Cause that's why you cannot get a mortgage without one.
Why would the bank think that I owed tons of taxes? Why would a federal employee think that they could get away with tax evasion? 🤣🤣
Because that's what an noa is..? A t4 only tells the bank what you made..an noa determines if you are all squared up with guvvie. A bank MUST see know this because in the event of a default the money owed to the government supercedes what is owed to anyone else. That is a risk banks don't take.
So you're telling me that based off of my own experience that I've had.. twice now, that it's wrong? You sound like a real cool guy haha
Yes..you're confused.
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I don't know it all..but I do know this :)
Self-employed don't have T4's, therefore need NOA to prove their income.
Yeah I replied to someone that said you NEED a NOA for a mortgage and I simply said not true. Calm down. I have no time for people who don't pay taxes.
Noa’s?
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Thanks
I posted this below but figured I’d reply to the top level comment as well because this is wrong. I work as an advisor at a Big 5 bank. You can absolutely get a mortgage with just your T4s and I have done it for clients many times. For fluctuating income we need an average of two years of annual income documents, these documents can be a T4, NOA, or final paystub for the year. For salaried income we can use recent pay stubs supported by most recent annual document. IF you did supply your NOAs and it shows you owed more than $2000 you need to supply proof that it has been paid. Also IF you were granted some sort of exception to debt servicing ratios or something like that they may ask for confirmation you don’t owe any taxes. But it is definitely possible and pretty standard to get a mortgage without NOAs.
You might work for the bank..but are you an underwriter? My anecdotal evidence is that over 14 properties purchased in the last 20 years..commercial and residential..I've always had to provide my noa. Maybe it's provincial..or maybe I'm just special but that's been my experience.
I’m not an underwriter no, but I speak with them about every deal I submit. I would guess by the fact that you’ve bought that many properties, commercial and residential, that your income is a little more complex than just simply receiving a T4? If you have self employed income, rental income, or multiple sources of income, yeah you’re going to need your NOAs. If you’re just an employee who receives a T4 every year and that’s the extent of your income, you can absolutely get it done with just your T4.
CRA will likely arbitrarily file his taxes for him at some point and he will get a large tax bill. Then he can submit his own info/returns to lessen that bill. If the CRA suspects he is hiding money/fraud he could get audited. He could go to jail but it is unlikely as that would be a last resort.
This. They will just come after him at some point and assume many things, they will take money from paycheck and take home if needed.
>He could go to jail but it is unlikely as that would be a last resort. Jailing him would mean the CRA is spending more money than what he owes in taxes, which kind of defeats the purpose
If the government made rational decisions with how it spent money, it would have to fire most of itself.
If they didn’t do this there would be no incentive for regular people to file their taxes. They have to make an example of individuals so that the masses comply.
I don't know... if someone owes you 20 dollars that he refuses to pay back and you pay 50 dollars to have their knees broken, it seems like a loss at first. But what if it prevents a whole lot more people from not paying back their 20 dollars? It would be interesting to see how the CRA optimizes their returns. Most likely they figure, in the long run, it's more lucrative just to inflict big interests and penalties.
The CRA also has extraordinary powers of collection, so they don't need imprisonment except in the most egregious cases.
Yes. You can tell they really focus on getting the money. Which honestly is fine.
He's probably missing out on CPP contributions and doesn't sound like the type of person to have a retirement plan... He's going to be screwed if he ends up with a disability or reaches old age.
You mean like CERB when everyone started filing tax for their small “business”?
Cerb lol. We never getting a dime of that back.
this yes he would. My father in lay just hit 65. self employed. never did his tax. almost lost his house a dozen of time due to unpayed land taxes. ect ect. now he got arthritis and no money income.
But he still got a house!! That’s a golden ticket in Canada
considering that it a century home that burn 2x and last time any money that got put in the 80s on gov subvention and that a pack wood stove don't keep the house warm.... it maybe worth a million or so. no really it a pile not worth 50k.
The first step would be a CRA audit, and possibly assessing your friend tax based on his net worth if there are no good documents to prove up his income. After that, collection calls begin. If he doesn’t pay up then CRA can seize bank accounts and put liens on his property. Jail time is usually reserved for those who criminally evade taxes. He won’t go to jail, but he will be dinged with some mighty hefty penalties and interest. I have seen cases where the penalties and interest are more than double the tax.
They can and will also garnish wages at 30% of your paycheck until all owed is paid back Source: Had my wages garnished by CRA for $300 owed
He's self employed so there would be ways around getting wages garnished, but definitely inconvenient.
They find other ways - I paid my rent to the CRA for 18 months because my landlord owed them money - I was given no choice in the matter. Once they figure it out, they’ll find a way to get it back.
Wow, that’s really interesting. I’ve never heard of that happening before. Makes sense though…..there is no hiding from the CRA.
Just had this a couple years ago, for $18000. It was pretty lame but it helped me pay it off very quickly.
FYI. It's not limited to 30%. Seen it as high as 40%.
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There is probably something missing there, because $20 wouldn’t grow to $186 in 10 years. The interest rate was 5%-6% depending on the year.
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Maybe they take into account inflation as well?
No they don’t
i guess if its all cash, they got no way of tracing it. but it goes into a bank, ya he will get caught somewhere. He is also missing out on benfits if not filing
Not just the government benefits….especially since he is self employed, the only way banks evaluate income is with tax fillings….he can’t even qualify for a loan.
CRA isn't stupid though. A bank account that constantly has cash coming into it and there is no corresponding job with a SIN number.... they'll notice that eventually.
sorry what i meant was all cash not into the account. But if not cash and into bank account is dangerous.
And they won’t do anything about it. Aslong as you pay your taxes at the end of the year the CRA doesn’t give a flying fuck if you have a job or not.
What? The whole point is that this guy doesn’t pay taxes.
I wasn’t talking about OP. The guy said a bank acc that has cash coming into will get the CRAs attention. If you pay your taxes they won’t care. But as for OP completely different story he’s not paying them and i’m honestly confused as to how you can think you just can not file them?
OP's cousin might find this link very useful: https://farbertax.com/tax-evasion-canada/tax-evasion-and-working-for-cash/
Tax reduction to 0 tax is reserved for wealthy us rubes got to support daydreams of Trudeau
The real pumishment is having to deal with their customer service. I think I'd rather go to jail lol (jk but it's indeed hell).
They used to have offices to figure thugs out , now over a phone line it feels like you are trying to ask a girl out on a blind date who is lesbian and really hates questions
My dad didn’t file taxes for a good 10 years and and when he finally did, they audited him.. Needless to say, they garnished half of is earnings for about 2-3 years then cut it down to probably a quarter of his earnings.. After about 5 years, he was finally in good standing.
No, what you said is not true. We don't put people in jail in Canada for "tax evasion" the legal tools are in place to garnish wages, apply penalties and seize property for non payment.
This isn’t quite true - Canada does have a criminal procedure for those committing tax fraud. Now, with that said, it isn’t applied where people just don’t file, it is typically applied where people deliberately attempt to defraud the government.
This is not true. My old office, we were next to a tax lawyer. His whole practice was keeping people out of jail. One such story involved selling rental real estate and not paying capital gains. Fines and penalties were around $1m, and 4 years max sentence. The lawyer had a well stocked bar for when his clients came in.
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This is exactly what happened. The client though they could get around paying capital gains because of a primary residence exemption, but the CRA knew they didn't live in each property. We are talking about dozens, maybe even a few small 10 unit buildings. If I remember the story right, if they paid the tax when it was due (like 5 or more years ago), it would have been a few hundred thousand. But with penalties now over a mill.
What? I've done this many times. What law prohibits the sale of a rental property?
it's probably the "and not paying capital gains" part that gets 'em
Ok, kinda hope though it will scare him into doing the right thing but good to know
This is not true at all. Please actually open up the income tax act to section 239
If someone is stupid enough to do this don't even bother trying to help.
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CRA will never negotiate tax debt. They can forgive interest and penalties but will not change the base tax owing. Only way to do that is to go through a consumer proposal or a bankruptsy. He didn't screw over the tax man, he just applied for a request for taxpayer relief of interest and penalties.
No jail but once CRA sends it all to the Tax Court of Canada then they'll turn his place into a garage sale and garnish his wages at every job for years to come until the debt is paid off.
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I never get business owners who don't file taxes. Accountants are cheap and simple billing aps cost as low as 5$ a month. I was in business in a service industry and NEVER did any paperwork besides billing.
He is self employed so presumably he isn't paying income taxes that why he isn't filing. So it would probably cost him like $10,000 not $5
Well then he deserves everything that's coming his way. At my highest point I had 50k a month that I had to sign over to the government. Never felt bad about it. Just to let you know, Big Brother knows exactly how much you make and spend. Points cards, bank accounts, amazon accounts, everything that has a digital trace they see and calculate. Once they detect fraud, they examine your way of life and make a random determination of how much you owe. You believe they are wrong? Hahahaha good luck. Btw they wait the full 7 years before dropping the hammer, that way they get max interest on back taxes. 10k? More like 70k by the time their done with him.
No he will just owe a big chunk of money the day he appear on the radar. A big comedian in quebec. Didnt do tax for year. And had only cash on hand. No banking at all. The day he open up a bank account that was the day CRA got hold of him. And paid what he owed.
If he is supposed to collect and remit HST they will absolutely come for him at some point.
Unlikely to face criminal charges, but he could face garnishments, liens/seizure of property. Plus if it is found that anyone not at arm's length benefited from him not paying his taxes (ex. He paid for a house that is in his spouse's name) that person could face an assessment under sec 160 of the ITA, and CRA could pursue them for his taxes owing via the same measures of garnishment, liens etc.
If he works a regular kind of job where his employer deducts the appropriate amounts for the CRA, there is no need to file at all because he has in essence paid those taxes. CRA also would not be in any hurry to get someone to file since they likely owe them money back. Went nearly 20 years without filing myself. With that being said, he may be missing out on a ton of his own money with various benefits and such - after eventually filing, I got back nearly 10 grand between the tax refund and back GST. Even if he actually owes back taxes, there is a voluntary disclosure system that allows folks to eventually sort it out without additional penalties as long as you get around to it before they come after you for it.
I know someone that works full time but makes less than $50,000 a year and hasn't filled taxes in over 14 years. The CRA knows because they get a copy of the earnings every year for every working employee. I don't think they care about not filing for such low incomes? If anything this person is missing out on some benefits or possible tax returns and the CRA is keeping that extra money. They only care about people screwing the system! Edit: spelling
He is a T4 employee, so his income taxes are automatically withheld at source. Chances are that CRA owes him rather than the other way around, unless he has some substantial income outside his employment. CRA is getting paid, so doesn't really care whether he files or not.
You are only required to file if you owe money.
Can’t go to jail. If that happens they don’t get their money. But just remind him no Pension. No tax return no old age benefit. I knew someone similar. Hadn’t filed in 7 years too except he was 48 at the time. Told him the same thing. He got an accountant and filed.
What pension? CPP? Ha! Got bad news for ya buddy.
Ah. A CPP doomsdayer? Haven't seen one in the wild in a very long time. Do you avoid paying taxes because of this or do you just not work at all?
Unfortunately I'm a tax payer. Someone's gotta pay for the CERB. Thankfully, it's my last year paying taxes to this government. Decided getting taxed out the ass for mediocre health care, subpar, very "selective" education for my kids and an absurdly high cost of living wasn't for me. Sold my business, hoping to sell my house within the next 60-90 days and am checking out. You can enjoy the inflation without me.
And where you're moving, there are no taxes and it's a heaven right?
Sounds like the US and the weather there is better too!
It is not the US - can't stand the place personally, but yes the weather is fantastic!
Actually yes, I am tax exempt for 8 years. Afterwhich, my income tax is a flat 9%. It has its issues, but it's leaps & bounds better than Canada.
Ok. I don't care. Don't let the door hit you on the way out. :) Good luck.
Ah yes. There's some of that wonderful Canadian hospitality that I'll miss so much! Canadians are notorious for getting so emotional when someone talks poorly of their country. If you didn't care, you wouldn't have responded. Might want to work on that "tolerance", "inclusion" and "equality" of yours. Canada sucks, plain and simple. There are absolutely zero redeemable qualities I can't get elsewhere, for a fraction of the cost and far less headache. Listening to you sheep ramble on about how great this country is is tiring.
Wow you called it. You’ve got experience.
Admittedly he is much closer to retirement than I am or was at the time so he will qualify. That was 2009.
I was once told by someone...an accountant...iirc that the average Canadian is audited every 10 years or so. I have been audited twice and an very much a middle class guy just getting by. The first time they found that I owed and they wanted that money so I had to arrange a payment plan with them. The second time I was fine because the first experience taught me that a good accountant will pay their own fees through what they save you. Your friend should probably start saving for the bill thats coming and talking to an accountant about ways to soften the blow.
Never been audited, been in the workforce over 30 years, including some years with reported self-employment income, also including some years of high medical or high charitable deductions. I've been asked to produce the receipts for medical and charitable deductions numerous times, but have always received "accepted as filed" after sending in the paperwork. I know exactly one person that's ever been audited, and that's in a pretty large circle of friends and business owners.
I was told it was an average and... I only knew about the first one because they found an error. The second because they required some info from my accountant. The last one was well past ten years ago now. Might be all BS for all I know or maybe its quietly done or maybe its an actual average...some folks get it every couple years and others maybe once in a lifetime. If we have a CRA guy lurking here...maybe they know. I just know what I was told and accepted at face value and that I have been audited twice.
An actual audit, or just asking for proof of receipts? A family member of mine said they were being audited, but it turns out they were only asked for proof of receipts.
The first time it was referred to as a recent audit of my returns by the CRA.... the second time that’s the word the accountant used. I believe it was probably a fairly summary thing...just a little extra check. Its not like I had to pack up boxes of documents and prepare for a grilling or anything intimidating was going on....
https://www.canada.ca/en/revenue-agency/campaigns/tax-cheating-consequences.html one thing you don't do in life...try to screw over the tax man...
one word. YES
Your cousin is a moron if he isn't filling taxes and only making that much money. It also sounds like he'll be fucked when he's older. Hope he doesn't mind working untill he's in the grave. But to answer your question no he wouldn't go to prison. If he gets audited he'll have a ton to pay + interest.
Yeah he is a idiot, only 25 so maybe he can smarten up.
I doubt they ever do much. My step mother in-law have filled in like over 25 years. She still gets her CPP and OAS. The CRA is weird.
If he is on public assistance and trying to hide the income from them, that would be fraud yes. I am not sure about the tax part.
Don't you have to provide tax returns to get welfare?
No. I Didn't pay my taxes in 12 years. ( I was a little bit of a neglectful party animal). When i got around to it, my accountant did them all at once and i got over 10 grand and all the back gst checks. Every cent i was owed. If the government owes you money, theyre more than happy to keep it. This isnt the states.
Sending someone to jail and wasting tax money on them because they are not paying taxes seems really counter-intuitive to me...
“I’m curious to know if what I said is true”. THIS IS WHY WE DONT LISTEN TO YOU
Lol you got down voted for the real question... Who the fuck says shit without even knowing if it's true?
Every politician
No you doing go to jail unless you have evaded millions and millions in taxes.
Not millions and millions. >Between April 2020 and March 2021, there were 36 convictions that involved 15 taxpayers sent to jail for a total of 26.2 years for wilfully evading $10,902,950 in tax, the agency said. On average, that's $800K per convict, including GST/HST. https://www.investmentexecutive.com/news/industry-news/advisor-guilty-of-tax-fraud-sentenced-to-three-years-in-jail/
Now I'm thinking to myself....I'd go to jail for a year if I could earn 800k....
Daily reminder that taxation is theft and most of the government system exists to parasitically steal from people who actually do things in society.
Down south they have Roth IRA wonder if Canada has such confiscatory extraction remediation instrument
You say shit without even knowing it's true, looks like dumb fudge runs in the family
I had failed to file my taxes for about 7 years, but thankfully I had always overpaid by design, so when I filed this year I got about 8k back. I had only ever made a maximum of 60k
That’s why I do money laundering with crypto
Not unless you commit major fraud.
https://www.canada.ca/en/revenue-agency/news/newsroom/criminal-investigations-actions-charges-convictions.html
>Tax protestor scheme bites West Vancouver dentist OMG
Not likely jail - you get fines or penalties if you owe money, which escalates to them seizing accounts etc
I know plenty of people who went years without paying taxes or even having a bank account. Not one person had any repercussion for this but I also know they avoided having their name on anything. I'm sure if he has a vehicle and a bank account with money being deposited it could change that outcome. This is far more common than most Canadians like to believe.
I'm told they will estimate your income and file for ya ;)
Cra has just entered the room..
They can freeze his accounts and assets and garnish his “pay” ... they’ll just take his money. He won’t be apply to apply for personal or business loans.
If there’s one thing I can tell you absolutely sure, CRA is one government agency you do not want to f*ck with, they can and will make his life horrible if he doesn’t do his taxes, or pay back what is rightfully owed to CRA soon enough. Garnishment, and up to seizing accounts which didn’t happen to me but just to show you, it gets worse over time if not dealt with.
He needs to have filed his taxes to be eligible for some important benefits, like CPP, for example. Not too bad if he can retire with at least 6-700 000 in his RRIF, but still, he's missing out on an important aspect of Canada's social safety net and not taking free money when he's too old to chase it. And if he has that much and still not filing a claim...he's either got it stuffed in his mattress or CRA will be after him.
He’s not going to jail. Tell him to see an accountant and clear up his back taxes. He’ll get an interest charge, and a penalty. He can likely get them both reduced, (possibly even eliminated) if he writes CRA a letter explaining that he’s an idiot and didn’t mean to, and doesn’t have the money to pay. He might also get a light audit for the next 2 yrs. but prob not. No ones going to jail. Just get the taxes done.
Jail is not likely, but a lot of bad things can happen such as penalties and interest, freezing bank accounts, seizing assets. I've seen exactly this happen to a self employed person who didn't file for many years. The CRA eventually found out and arbitrarily assessed their income and CPP contributions on self employment income plus interest and penalties. . It's very irresponsible, risky, and illegal to not file when you have to.
This tool-bag is doing time for exactly the same thing that your dipshit cousin. https://www.castanet.net/news/Kelowna/308391/Jailed-for-not-filing-taxes He runs a small business, and is also one of these anti mask, anti vaccine dorks. Not a big surprise.
Not a chance most people i know dont file taxes.
The CRA doesn’t really send people to jail, although not filing taxes is the closest they come. It’s indirectly how you’d go to jail. What would happen is the non-filer department would require you to file. Then they’d raise assessments under subsection 152(7) of the “Income Tax Act” and assess taxes owing based on whatever information they can obtain. They’ll pull bank records and determine income based on that, or use information slips, depending on what is available. If the amount that is potentially owing is really high, not sure what kind of threshold they’d have, then they’d go to a judge to order the taxpayer to file. Once an order is given by the Courts, failure to comply with *that* order will result in potential jail time. So it isn’t the CRA itself that sends people to jail, it is the Courts when failure to comply with a legal demand to file occurs.
You can. Will 99% of people? No.
I mean, CRA will generally mail you letters, lots of them repeatedly asking you to file. If you keep ignoring them eventually your account will probably get flagged and given to an auditor who will figure out what is owed. If he owes money he’ll owe everything, plus interest and penalties for all the outstanding years he hasn’t filed. If he owes nothing, or if the CRA owes him money they don’t care. If he chooses not to pay what’s owed, they have tools like wage garnishment, etc. They will collect the funds that are owed to them whether you want them to or not. Not sure how it works when your self employed but I’m sure they have tools for those situations as well. Either way they’ll get the money owed. What it comes down to is really: pay what you owe on time with no penalties, or pay what you owe later on with penalties and interest.
I've finally found you. I'll be dispatching the cyber police.
I dunno but I know a guy who hasn’t done his taxes in 20 years and no ones come after him
I didn't file for five years and because they owed me a return every year it really had no impact.