# Don't help friends with CRA problems



## Four Pillars (Apr 5, 2009)

http://blog.taxresource.ca/held-liable-for-someone-elses-tax-debt/

Interesting story - I understand the logic behind this law, but it doesn't seem fair since that person (and probably many people in a similar situation), likely would have no idea they might be getting themselves in trouble by helping someone.


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## MoneyGal (Apr 24, 2009)

See also this thread: http://canadianmoneyforum.com/showthread.php?t=6238


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## iherald (Apr 18, 2009)

While I agree that it doesn't seem fair, it's pretty clear you're helping your friend circumvent the CRA. You can't be surprised that they aren't going to like that!


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## Four Pillars (Apr 5, 2009)

iherald said:


> While I agree that it doesn't seem fair, it's pretty clear you're helping your friend circumvent the CRA. You can't be surprised that they aren't going to like that!


To be honest, it never occurred to me that you would be circumventing the CRA. It's obvious to me only after I thought about it (after reading the article).

What if your friend/relative messes up their taxes and has no money for food? You invite them and their hungry young children over for dinner. Are you helping circumvent the CRA in that case?


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## slacker (Mar 8, 2010)

Legally speaking, is owing money to the CRA different than other forms of unpaid bills? I couldn't imagine Rogers cutting my service off for helping a friend this way.


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## HaroldCrump (Jun 10, 2009)

slacker said:


> Legally speaking, is owing money to the CRA different than other forms of unpaid bills? I couldn't imagine Rogers cutting my service off for helping a friend this way.


I thought that CRA could put you in jail for not paying them.
Rogers can't.
There's no debtors jail any more, but the govt. is almighty.


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## iherald (Apr 18, 2009)

slacker said:


> Legally speaking, is owing money to the CRA different than other forms of unpaid bills? I couldn't imagine Rogers cutting my service off for helping a friend this way.


The difference as I see it is not that you're lending money, it's that you're taking his paycheck, 'washing' it through your bank account and giving your friend cash. 

If Rogers had a legal judgment against your friend and you were trying that, I can see them going after you.


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## Cal (Jun 17, 2009)

slacker said:


> Legally speaking, is owing money to the CRA different than other forms of unpaid bills? I couldn't imagine Rogers cutting my service off for helping a friend this way.


Rogers can't seize your house and freeze your assets for an outstanding cell phone bill either!


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## George (Apr 3, 2009)

HaroldCrump said:


> I thought that CRA could put you in jail for not paying them.
> Rogers can't.
> There's no debtors jail any more, but the govt. is almighty.


CRA has no authority to jail anybody for unpaid taxes, but they have huge authority to seize your stuff and garnish your income.


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## Taxsaver (Jun 7, 2009)

HaroldCrump said:


> I thought that CRA could put you in jail for not paying them.
> Rogers can't.
> There's no debtors jail any more, but the govt. is almighty.


In America, if a judge says you have to pay a debtor and you don't, you will go to jail because you're not obeying his judgement. Same here in Canada?


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## Taxsaver (Jun 7, 2009)

I remember a case in Quebec where a citizen had been waiting forever for a payment from a Quebec government's agency. He went to the Small Claims Court and got a judgement that told this agency they had like 30 days to pay back the citizen or else they would seize the agency's building! He received a cheque not long after that.


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## MoneyGal (Apr 24, 2009)

George said:


> CRA has no authority to jail anybody for unpaid taxes, but they have huge authority to seize your stuff and garnish your income.


CRA has no direct authority, but criminal tax evasion is absolutely punishable with jail time. You can even go to jail for unfiled returns, never mind unpaid taxes: http://www.cra-arc.gc.ca/nwsrm/cnvctns/bc/bc110225-eng.html

Go to the CRA web site and search on the term "jail" to get a list of recent successful convictions that resulted in jail time.


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## OhGreatGuru (May 24, 2009)

Four Pillars said:


> http://blog.taxresource.ca/held-liable-for-someone-elses-tax-debt/
> 
> Interesting story - I understand the logic behind this law, but it doesn't seem fair since that person (and probably many people in a similar situation), likely would have no idea they might be getting themselves in trouble by helping someone.


You aren't "helping a friend". You are helping him hide his money from his legal creditors (the government). You are also committing a fraud on the bank by giving him a debit card on an acount in your name. A "friend" wouldn't ask you to do this.


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## ghostryder (Apr 5, 2009)

MoneyGal said:


> CRA has no direct authority, but criminal tax evasion is absolutely punishable with jail time. You can even go to jail for unfiled returns, never mind unpaid taxes: http://www.cra-arc.gc.ca/nwsrm/cnvctns/bc/bc110225-eng.html
> 
> Go to the CRA web site and search on the term "jail" to get a list of recent successful convictions that resulted in jail time.




But that is not the same as being put in jail for failing to pay. No one in Canada goes to jail for failing to pay. If you don't pay, CRA will simply garnish wages, seize property, put a lien on your house etc.

People do go to jail for criminal tax evasion.

And some people go to jail for not filing returns. But those people have been prosecuted (for not filing), a judge has ordered them to file and when they don't comply with the order of the court, they end up in the big house for contempt of court. But techically that is not going to jail for failing to file. It's going to jail because you disobeyed a judge's order.


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## ghostryder (Apr 5, 2009)

Four Pillars said:


> http://blog.taxresource.ca/held-liable-for-someone-elses-tax-debt/
> 
> Interesting story - I understand the logic behind this law, but it doesn't seem fair since that person (and probably many people in a similar situation), likely would have no idea they might be getting themselves in trouble by helping someone.



How is this any different that someone who hides/transfers assets to someone else and then declares bankruptcy to get out of paying creditors? Bankruptcy court calls this "fraudulent conveyance".


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## bean438 (Jul 18, 2009)

Seems pretty clear cut case of money laundering and fraud to me.


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