Man Sentenced, Fined for Real Estate Income Tax Evasion by CRA

I believe the main defense most people give CRA when they are audited for this type of situation is "Oh really, I didn't know."

Process:
1. Act surprised and in shock
2. CRA processes you with taxes + fines

My guess is this did not happen for Mr. Dhudwal as he owned eight properties, did not claim business income, did not claim capital gains and did not claim rental income on his 2007 to 2011 income taxes.

This put him in a situation to plead guilty to Income Tax Evasion.

Quote from article:

“When taxpayers are convicted of income tax evasion, they must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA. In addition, the court may fine them up to 200 per cent of the taxes evaded and impose a jail term of up to five years.”

If you do the math, rental income (with expenses) + capital gains are generally taxed comparatively low. Do yourself a favour and report accordingly.

****If you are in the business of investing in or flipping properties, make sure you use an excellent accountant.

If you need an excellent accountant, I have one. Message me for contact info.

Comments