7 Myths about the Taxman
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Thread: 7 Myths about the Taxman

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    7 Myths about the Taxman

    Not exactly worthy of its own thread, but given it is tax season, these 7 myths about the taxman courtesy of MoneySense may be worth noting.

    Myth 2 "evidence of fraud or misrepresentation of income" may be just a choice of words of the author, but there could be quite a murky differentiation between "misrepresentation" and "misinterpretation".


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    Senior Member kcowan's Avatar
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    Another one:
    2. If the CRA hasn’t questioned your return for four years, you got away with it.

    FACT: If there is evidence of fraud or misrepresentation of income, the CRA can come after you at any time for any tax year.
    Some people continue to believe that 7 years is all you have to keep. Even accountants spout this BS.

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    I believe, the 7 year clock is with respect to re-assessments only. Audit can go back to when you were in your mother's womb if they suspect fraud, etc.

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    Quote Originally Posted by AltaRed View Post
    Not exactly worthy of its own thread, but given it is tax season, these 7 myths about the taxman courtesy of MoneySense may be worth noting.

    Myth 2 "evidence of fraud or misrepresentation of income" may be just a choice of words of the author, but there could be quite a murky differentiation between "misrepresentation" and "misinterpretation".
    Agreed.

    Big difference between false and you know vs. false and didn't know.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

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    Senior Member sags's Avatar
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    And there is the "reverse onus" burden in a tax court situation, for the taxpayer to prove the "interpretation" by the CRA is wrong.
    Someone planted a tree a long time ago so I can sit in the shade.

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    Quote Originally Posted by My Own Advisor View Post
    Big difference between false and you know vs. false and didn't know.
    Think it ultimately depends on the complexity of the situation and how egregious the infraction that determines the weight of the hammer.

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    Senior Member kcowan's Avatar
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    Quote Originally Posted by sags View Post
    And there is the "reverse onus" burden in a tax court situation, for the taxpayer to prove the "interpretation" by the CRA is wrong.
    ergo keep your records. I hope the hell WD USBs never go obsolete!

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    That the CRA wants to throw you into jail (assuming no criminal intentions). They actually don't because it means that they still won't get their money for a long while. They would rather settle than to go to tax court which wastes time and money.

    Source: I was about to go to tax court for one of our clients when the CRA called 2 hours before court agreeing to settle.

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    Quote Originally Posted by sags View Post
    And there is the "reverse onus" burden in a tax court situation, for the taxpayer to prove the "interpretation" by the CRA is wrong.
    The article I read said that the "innocent until proven guilty" from a regular court is reversed in tax court. The tax payer is guilty until the defendant can prove they are innocent.

    That's why I like to keep a lot of electronic documentation to show what I was thinking for what I did.


    Cheers

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    Quote Originally Posted by AltaRed View Post
    I believe, the 7 year clock is with respect to re-assessments only. Audit can go back to when you were in your mother's womb if they suspect fraud, etc.
    I'll have to find it again but there was an article saying that where one owed money, each notice from CRA looking to collect reset the clock for how long they could go after one, proof of fraud or no proof of fraud.


    Cheers


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