Go to them before they come to you

The CRA conducted over 350,000 audit and review actions, including about 17,300 underground economy
audits, and more than 1,100 audits of taxpayers suspected of earning income from illegal activities.
• The CRA completed 20,750 international audits and 34,111 audits of tax shelters.
• The CRA identified a total dollar value of $5.7 billion in non-compliance for international and large business
and $2.1 billion for small and medium-sized enterprises.
• The CRA reassessed over 20,000 individuals who had participated in at least 1 of 20 unacceptable tax shelter
gifting arrangements.
• The CRA completed 148 interprovincial tax avoidance cases, which resulted in more than $300 million
worth of taxes being recovered.
These accomplishments led to results in the courts, including significant fines and—for some people—jail time:
• In 2008–2009, the CRA referred 164 income tax and goods and services tax/harmonized sales tax
(GST/HST) investigations to the Public Prosecution Service of Canada.
• The CRA referred 58 GST investigations to Justice Québec.
• These and referrals from previous years resulted in 323 convictions for fraud or tax evasion (including
66 cases in Quebec courts).
• Courts across Canada imposed fines of close to $29.2 million (including $9.3 million in Quebec courts).

• The offenders were sentenced to more than 81 years in prison collectively (including 17 years in Quebec

• Convictions were obtained in 98% of the cases prosecuted.
In cases of gross negligence, the Income Tax Act and Excise Tax Act allow the CRA to assess a penalty of up to 50%
of unpaid tax or an improperly claimed benefit. In addition, a court may, on summary conviction, fine people 50% to
200% of the tax evaded, and sentence them to a jail term of up to two years.

The CRA is a member of international organizations that work to tackle the abusive use of tax havens. International
partnerships help us uncover schemes that are developed abroad and marketed in Canada. Taxpayers with
unreported assets and income offshore could face penalties of up to 50% of unreported tax on income and 5% per
year for any unreported assets.

You can come to us to correct your tax affairs before we go to you. Under the VDP, taxpayers who have not
reported all of their income can voluntarily correct their tax affairs. They will not be penalized or prosecuted if they
make a valid disclosure before they become aware of compliance actions being started by the CRA against them.

These individuals may only have to pay the taxes owing, plus interest. More information on the VDP can be found
on the CRA Web site at www.cra.gc.ca/voluntarydisclosures.
Tax Alert