‘Tax evasion can
be devastating

IF YOU cheat on your in-
come tax, I hope you have
no enemies.

Michael

DOLLARS AND SENSE

‘*We get a good cross-section of
whistle-blowers — informants who
contact us about individuals and
companies who perhaps aren’t
declaring all their income,” said
Ina McMillan, public affairs divi-
sion chief for Revenue Canada,
Taxation, Vancouver district of-
fice. ‘‘And we do explore all the
leads we get.”’

McMilban said one of the maia
sources of such leads is the ex-
spouse, whether ex-married or
ex-common law.

“At first,’? she said, ‘‘we
thought these would be former
wives, for example, who felt they
hadn’t zeceived a large enough
eattlement. But it often turns out
to be people who simply want
revenge.

“This frequently occurs when
the couple had their own family
business. Typically, the partner
who ends up out of the marriage
and out of the business tells us
about ways the other partner or
the company is not reporting in-
come or otherwise evading tax.
Clearly, the informant knows all
about how the business is being
run.”

Disgruntled people with 2
grudge against their former
employer could also have inside
knowledge of the company’s or
owner’s finances that would inter-
est Revenue Canada.

“We hear from these individu-
als, as well as from a business’s
competitors,’’ McMillan said.

“And we get tips from unhappy
customers who feel they didn’t get
good value in the products or ser-
vices they bought — and know the
supplier is taking cash under the
table or doesn’t provide proper
invoices or receipts.’”

Closer to home, a suspicious (or
unpleasant) neighbor could tip off
Revenue Canada about the rental
suite(s) in your house, just to see
if you really are declaring the rent
you receive.

McMillan said Revenue Canada
no longer makes announcements
to the media when a tax evader is
convicted.

“But we will answer any media
questions fer information that is
on the public record,*’ she said.
“And we regularly release a gen-
eral report on tax evasion pro-
secutions and convictions."’

Publicity about such convictions
appears to have a deterrent effect.

“We are getting more voluntary
disclosures —- taxpayers coming in
to straighten out some past
‘mistakes’ involving, in some
cases, miliions of dollars of
undeclared income,’’ she said.
‘And this increase appears to be ua
direct result of the publicity given
to the convictions of tax evaders,

“Also, more judges these days
see tax evasion as something that
warrants jail sentences, and that’s

ae

what the offenders are receiving.”*

Under criminal law, tax evasion
can cost you between 25 and 200
per cent of the unpaid tax and/or
up to five years in prison — plus
the unpaid tax, of course.

McMillan said Revenue Canada
itself also keeps an eye out for
potential tax evaders.

“Hf one of our auditors notices
something, a report will go in to
our special investigations unit.’’
she said. Publicity about an indi-
vidual or company could also
prompt a contact.

If you suddenly remember in-
come you should have declared
and decide to tcll Revenue Canada
about it ~— before Revenue
Canada comes asking — you can
escape prosecution and penalties.

other than a late filing penalty if

you didn’t file a return when you
should have. And your identitv
will be kept confidential.

Provided Revenue Canada
hasn't started any investigation as
of the date you make contact and
provided your disclosure is com-
plete, you will be Hable only for
the back taxes plus interest.

You are expected to pay what
you owe, or make payment ar-
rangements. You certainly want to
slow or if possible stop the inter-
est clock, which has been ticking
away at an annual rate of 15 per
cent, compounded daily; the rate,
adjusted quarterly, drops to 13
per cent effective April 1. For
more details, contact your focal
tax office for a free copy of In-
formation Circular IC 85-IR,
Voluntary Disclosures.

While some people might
disagree with the way government
spends the tax money it collecis
from us, those who don't pay
what the law says they should
simply shift an additional finan-
cial burden to other taxpayers.

Mike Grenby is a Vancouver-
based columnist and independent
personal financial advisor.

Wednesday, March 20, 1991 — North Shore News - 25

photo Cindy jan

JIM STUART (right) accepts a Morrow snoboard from Bruce Brown (left) assistant manager of
Save-On-Foods on Marine Drive. The board was grand prize in a Mars Candy draw (repre-

sentative Barry Atkinson looks on).

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