TOO GOOD TO BE TRUE

It's that time of year when Canadians are preparing for their annual income tax filings.

Also be aware of those too-good-to-be-true tax schemes that promise to reduce your taxes or even increase the amount of your refund.

These promoters deliberately bend or break Canadian tax laws and the people who end up paying the consequences are the taxpayers who fall for these schemes. 

The Voluntary Disclosures Program allows taxpayers a second chance to correct a tax return.

The Government of Canada is cracking down on this type of activity by providing the Canada Revenue Agency (CRA) with the the tools and resources to pursue those who try to sell these schemes.

CRA has expanded its Promoter Compliance Centre dedicated to identifying, deterring and unraveling tax avoidance schemes set up by these promoters, through increased audits, business intelligence, communication, and the resources to better warn Canadians against such schemes.

It may take a few years for CRA to catch up, but tax evasion and tax avoidance through illegal means has no statutory time limit.

I know people who ended up in audit and instead of tax savings, owed significant fines and penalties with interest on top of that. Some of these audits occurred after 4 years, others at 7 years.

Don't be fooled. If in doubt, check with CRA first.