canadian people

Hey there, I have a few questions regarding taxes in Canada.

If you don't report any of your earnings, how would the cra calculate it?
None of the networks or people i got paid from has my tax #
All of the money is in my bank account, my bank don't have my tax # either.
The amount of money is in the low six figures.

What would you do in my situation?

Please note that I do feel its important to pay your taxes and I will be doing so next year now that I figured out the best ways to structure things(register a business) and all that. I'm just worried about the money i made a while back which i never reported.

Not sure why you felt that registering a business would change your tax liability, unless you are incorporated. The only the CRA would know is if your bank reports it to them, either voluntarily, or because the CRA questioned them. Did you file a report of ANY income at all? Were you collecting any unemployment or welfare benefits? Do you have any dependents you will claim on future/past returns? Will anyone claim they worked for you or paid you money (like contractors, not cpa networks/affiliate companies)?

You can still have people file a report on you based on your name/address and have the CRA do an investigation and check your bank records to find out. If one of the companies you worked for is based out of Canada, they may wish to claim a deduction and file manually and instead of having your SIN#, they give your name/address/PH# and tell the CRA to look into it.

Or you can just be randomly selected etc.

But basically the only way it would be proven is by them checking your bank records.

I appreciate you taking the time to reply.

I have never filed any income nor have I claimed anything. I actually just became a permanent resident and received my SIN# in the beginning of 2010. Around the same time i started making a decent amount of money working for myself.

If the CRA is aware of me would they be sending me letters or calling me?

I really wish I could just phone them and ask "Hey, how much money do i owe you"
That would be so much easier.

Oh also, do you have any idea what they do during an audit?
If I end up making a voluntary disclosure and they dont like the #'s I'm telling them.

anonymousjoe said:

I appreciate you taking the time to reply.

I have never filed any income nor have I claimed anything. I actually just became a permanent resident and received my SIN# in the beginning of 2010. Around the same time i started making a decent amount of money working for myself.

If the CRA is aware of me would they be sending me letters or calling me?

I really wish I could just phone them and ask "Hey, how much money do i owe you"
That would be so much easier.

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I have done taxes for permanent residents 1st year before and the CRA will definitely look much closer at your first tax return. You can't skip a year with CRA when you are new to the country, so you will have to file SOMETHING for whatever time you were first in Canada.

The CRA wants to know (for the year you arrived):
1) What was your income BEFORE you came to Canada
2) Did you make any income AFTER you arrived in Canada

They will 99.999% just take whatever you say as the truth. If you say 0, they will take 0. If you say 10,000, they will take 10,000. But there is always a very small chance they will look further into it.

They will not send you letters and phone calls. You do not owe them any money as far as they are aware. Until you or someone else files a piece of paper on your behalf, or you try to apply for some social benefits like Employment Insurance or Welfare or Health Insurance, they really have no reason to look into you.

So right now, if we were being real here, you probably owe the government like 30% of everything you made in the year 2010, and 2011. I am not going to straight out give advice how to defraud the CRA, but lets just say you have a bit of time before they will ever find out about your tax issues, but then when you DO actually want to file, which you will need to do if you actually plan to make Canada your home, they will be suspicious why it took you so long to file, + charge you probably a 30% penalty on all taxes owed.

They may look at your bank records because of your situation. So start planning to save save save lots of money in case of the worst case scenario, then put an ad on craigslist to try to find a proper "tax preparer" who is willing to help you out in your special situation.

anonymousjoe said:

Oh also, do you have any idea what they do during an audit?
If I end up making a voluntary disclosure and they dont like the #'s I'm telling them.

Click to expand...

An audit is only dangerous if you are claiming lots of deductions. The most they would do is request your bank statements of deposit and use those amounts for your income. They have nothing else they can realistically do to gauge your income. They MAY ask for tax statements from your previous country, but that would be the further extent they would go. So they might see you made $10,000/year in your previous country, then if you are declaring $20,000 in Canada, they will be happy and have no problems. But if you made $100,000 in your previous country, and claim $10,000 here, they might get suspicious, but still nothing else they can do besides your bank records.

An audit is only scary if you are making claims for deductions. So if you tell the government, you paid me $5,000/year to do Data Entry for you, they might ask for VERY specific information WHY you needed to pay me, and ask for PROOF that you paid me etc.

Thanks so much man, I was a student for 3 years in canada before becoming a permanent resident... never had an actual job. So If I was to move to a different country in like 2 years, and the cra only then picked up on anything would they come after me internationally?

anonymousjoe said:

Thanks so much man, I was a student for 3 years in canada before becoming a permanent resident... never had an actual job. So If I was to move to a different country in like 2 years, and the cra only then picked up on anything would they come after me internationally?

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No they wouldn't. They just don't have enough information to go off of. With you being a non-resident at that point in time, and them not being able to get hold of you easily, they would just push your case to the back of the filing cabinet and forget about it.