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CRA Is Coming For Your Undeclared Income

GameBoy27

Well-known member
Nov 23, 2004
12,518
2,368
113
CRA expects to track down $400-million in tax crackdown.

While I agree people should pay taxes, I see this (as was mentioned) excessively targeting "low-hanging fruit" like restaurant servers.

I'm going to leave my tips in cash from now on.

If you earn income through tips and don't report it, watch out.

It's becoming increasingly easy for Canada Revenue Agency (CRA) to catch unreported tip income, and the agency says it plans to continue targeting those who don't pay up.

In an email to HuffPost Canada, a CRA spokesman denied recent news reports that the agency is engaged in a crackdown on bar and restaurant servers. Karl Lavoie said there has been no increase in audits in this sector in recent years.

But he noted that bars and restaurants have been identified as being at "higher risk" of non-compliance on taxes.

"When a sector has been identified as being at high risk for non-compliance, the CRA will focus audit efforts in this sector until an improvement in compliance is noted," said Lavoie.

The CRA says it doesn't directly go after servers' earnings; rather, audits of servers are usually an extension of a review of a particular bar or restaurant.

In one recent instance, the CRA targeted Murphy Hospitality Group, which owns restaurants around Prince Edward Island. Management reportedly told media that as many as 200 staffers may have been audited by the agency.

One staffer, a 25-year-old woman struggling to pay off student debt, was hit with a $15,000 tax bill, the Charlottetown Guardian reported.

"It's pretty crazy that they're coming after the poor young population who are in school and just trying to support themselves,'' Anita Casey told the newspaper.

She said she had "actually claimed a good portion of (her) tips" on her taxes to begin with.

The company's COO Ben Murphy expressed concern that his employees were targeted this way.

"It's been a rule for X amount of years or whatever, but to go retroactive and start enforcing it two years ago? A lot of these people are paying their way through school or paying off their student loans," he told the Guardian.

Failing to report income from tips used to be easier to get away with, back when much restaurant and bar business was done in cash. But experts say that with the growing popularity of digital payments, tax collectors are gaining the advantage.

"The CRA uses a variety of tools and techniques to identify unreported income, including third-party data. Most food and beverage establishments use electronic point of sales systems that provide detailed information on transactions, including the amount of tips paid," the agency said.

Not just going after the little guys, CRA insists

The CRA has repeatedly taken criticism, sometimes even from MPs in the governing Liberal party, that it excessively targets "low-hanging fruit" like restaurant servers while ignoring wealthy businesses and people who use complex schemes to send money offshore to avoid taxation.

But in the wake of revelations of widespread offshore tax avoidance in the Panama Papers and Paradise Papers, that appears to be changing — at least gradually.

The two last federal budgets have increased the resources the CRA has to go after offshore tax evasion, Lavoie noted.

"The CRA now has audit teams dedicated to offshore non-compliance, and another dedicated to wealthy Canadians. The Agency also now risk assesses all large multinational companies every year."

http://www.huffingtonpost.ca/2018/02/21/cra-auditing-income-from-tips-canada-revenue-agency_a_23367772/
 

Mr Deeds

Muff Diver Extraordinaire
Mar 10, 2013
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Its will probably cost the CRA 400m to collect the 400m :yield:
 

Worf

Active member
Sep 26, 2001
1,891
19
38
In a house somewhere
Yup... the low hanging fruit.

The CRA will be targeting the middle class, the same people our fun loving selfie loving idiot prime minister cares so deeply about. These are the people who can't really fight back by hiring accountants, lawyers etc. Everybody should pay their fair share of taxes. But as taxes increase (top marginal tax rate > 50%) and governments throw away our taxes, then there is more incentive for all of us to find alternate means to not reporting our taxes.
 

Ref

Committee Member
Oct 29, 2002
5,058
1,003
113
web.archive.org
It is easier to go after the small amounts because those people are less likely to claim bankruptcy and will work out a payment plan.

I am not a fan of the Trudeau government and their double-speak, however if people are not paying their fair share of taxes, my comment is "too fucking bad!". I pay my taxes in full and millions of others do as well. The fact that some people have earned extra income and not claimed it (either purposely or accidentally) is their fault and they need to own up to it.

For those who have been slammed by the government over a technicality and they have been unable to resolve their case via a lawyer or other means, then I feel bad for you.
 

explorerzip

Well-known member
Jul 27, 2006
7,993
1,184
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No doubt, I just got hit with 5 years of HST back taxes just now... obviously I don't collect any HST but they wanted me to pay it as I originally registered for another business before I started doing this. Why don't they focus on the companies in the Panama papers? There are far bigger fish than to go after servers with declaring lower amounts of tips, and in my case they just assumed I had collected and not paid them tens of thousands of dollars of HST which isn't true. I pay taxes, I had to refile and give reasons why I hadn't collected HST and still pay some of it anyway which sucks. Just be careful as it seems they are going after a lot of individuals. Last year I got audited for some special deductions and had to upload tons of paperwork and they backed off.
Low hanging fruit as someone else said. Individuals especially those on low or minimum wages are unlikely to have a professional doing their tax return. So it's easy for the CRA to go after them. Big companies have finance and legal departments.
 

Occasionally

Active member
May 22, 2011
2,929
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The government doesn't go after big companies because they hire accounting companies and auditors to help them do their books and taxes.

Assuming the company and third party company doing the taxes do it legit, there is nothing for the government to go after.
 

Occasionally

Active member
May 22, 2011
2,929
7
38
If you steal or cheat a thousand dollars you are a criminal or tax fraud person. If you steal or cheat one billion, you become a hero, and maybe our Prime Minister few years later. :)
No kidding.

The old saying "money doesn't grow on trees" is BS.

Sounds logical growing up as a kid, but when you get older and see what the government does, they literally print out money and go into untold billions of debt which no person or company could withstand.

People and company have to earn money to pay off debts.

The government pays off debts by forcing taxes and turning on the minting machines.

Would be great of I had a printing press in the basement I can churn out $100 bills when I wanted to!
 

Mr Deeds

Muff Diver Extraordinaire
Mar 10, 2013
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The government doesn't go after big companies because they hire accounting companies and auditors to help them do their books and taxes.

Assuming the company and third party company doing the taxes do it legit, there is nothing for the government to go after.
0
Assuming they are legit? Almost every large corp in the free world keeps assets off shore to evade taxes and the amounts are staggering, The CRA goes after people who mostly cant afford legal representation and are bullied into submission. In Canada we are guilty until proven innocent in the eyes of the tax dept.
 

koreanjames

Active member
Oct 4, 2011
832
65
28
The same lower income earning less educated population that were easily seduced by wynn and put them in power (ie. Ie min wage increase to 30k a year) will suffer the most. It never fails, time and time again.

Low hanging fruit as someone else said. Individuals especially those on low or minimum wages are unlikely to have a professional doing their tax return. So it's easy for the CRA to go after them. Big companies have finance and legal departments.
How's that minimum wage increase looking now?
Yup... the low hanging fruit.

The CRA will be targeting the middle class, the same people our fun loving selfie loving idiot prime minister cares so deeply about. These are the people who can't really fight back by hiring accountants, lawyers etc. Everybody should pay their fair share of taxes. But as taxes increase (top marginal tax rate > 50%) and governments throw away our taxes, then there is more incentive for all of us to find alternate means to not reporting our taxes.
 

koreanjames

Active member
Oct 4, 2011
832
65
28
They have become desperate AF as they wasted so much money (ie powe plant) and are resorting to petty methods to scrounge every cent they can, only to surely waste it all over again. There has been more random audits then ever for all small business, sole prop. + incorporated re all shapes and sizes.

No doubt, I just got hit with 5 years of HST back taxes just now... obviously I don't collect any HST but they wanted me to pay it as I originally registered for another business before I started doing this. Why don't they focus on the companies in the Panama papers? There are far bigger fish than to go after servers with declaring lower amounts of tips, and in my case they just assumed I had collected and not paid them tens of thousands of dollars of HST which isn't true. I pay taxes, I had to refile and give reasons why I hadn't collected HST and still pay some of it anyway which sucks. Just be careful as it seems they are going after a lot of individuals. Last year I got audited for some special deductions and had to upload tons of paperwork and they backed off.
 

sempel

Banned
Feb 23, 2017
3,649
25
0
Chances are people who earn minimum wage are living paycheck to paycheck, have to live frugal, and taking any extra money out of their pocket just makes their bad situation worse. Like hitting a person when they are down, pretty sad.

However, just playing the Devil's Advocate, we do live in a country that tries to be fair to everyone so everyone has to pay their fair share. We tax the hell out of the rich and the system is built so they are equivalent to a poor person when it comes to receiving services. So if we expect them to pay their taxes fairly, shouldn't everyone else be expected to do the same? A guy earns $1 Million so he has to pay taxes because there's no way to hide it. A bartender at an upscale place earns $40-50/hour in cash tips and doesn't declare it? That's not fair.

I think it's sad that you are going after the people working in small places that make a few buck extra per hour in tips so you are trying to get blood from a stone. But I think there's tons of people who earn very high tips that claim poverty and they make more than a lot of people.
 

spankingman

Well-known member
Dec 7, 2008
3,637
311
83
I've often wondered if you make a certain amount say $80.000.00 per year. Your employer deducts the taxes according to the CRA guidelines why do you have to pay MORE after you file your return?
 

koreanjames

Active member
Oct 4, 2011
832
65
28
I've often wondered if you make a certain amount say $80.000.00 per year. Your employer deducts the taxes according to the CRA guidelines why do you have to pay MORE after you file your return?
That shouldn’t happen. Standard t4 deductions are based on that consistent amount of pay throughout the entire year based on the assumed pay interval (ie. Every 2weeks). They should be deducting consistently and correctly.
 

IRIS

Supporting Member
Feb 18, 2010
5,209
270
83
iris4men.escortbook.com
My heart bleeds for you....


Do you even declare ALL your income? and pay tax on it? Don't kid a kidder....

I'm sure these back taxes are only a fraction of what you ACTUALLY owe.
Who the f..k are you? A perfect totally honest saint, who never did any trick? As I read your post you nothing more than an envious , jealous, low class guy who can't swallow our hourly rate.
Thinking about your own TAX and leave ours alone.
That line: " My heart bleeds for you..." shows us perfectly what type of guy you are. Sarcasm is for winners Absalom, so you don't have the right to be sarcastic here.
 

Keebler Elf

The Original Elf
Aug 31, 2001
14,572
203
63
The Keebler Factory
They said on the radio this is partly due to their inability to catch wealthier tax cheats who use loopholes to get out of paying so they're going after the little guy who will have trouble defending themselves.

That said, pay what you owe. I have absolutely ZERO sympathy for someone caught under-reporting their income. When you don't pay, we all have to pay more. Fuck that.
 

sempel

Banned
Feb 23, 2017
3,649
25
0
I've often wondered if you make a certain amount say $80.000.00 per year. Your employer deducts the taxes according to the CRA guidelines why do you have to pay MORE after you file your return?
Your employer deducts based on what they pay you and the info you provide them. They give you a summary of the full year and you do your taxes. Many people pay nothing or are entitled to a refund. Those who pay more had less deductions (e.g. Independent contractor), have other income, or have taxable benefits.
 

thumper18474

Well-known member
I've often wondered if you make a certain amount say $80.000.00 per year. Your employer deducts the taxes according to the CRA guidelines why do you have to pay MORE after you file your return?
If you have a company vehicle..CRA considers that a Taxable benefit...and affixes a value to that ..i.e 6000/yr it will be looking for that tax based on your tax level...if you come in under that you pay.
Thats why if you have a company vehicle ask your employer to take out extra tax..
 
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