If You Are Earning In Cash, Can CRA Still Penalize You For Tax Evasion?
CRA or Canada Revenue Agency is the organization that keeps track of businesses and individuals and their income all through the year. It is the job of this organization to ensure that, the citizens pay their tax on time and in the proper amount. People who are in various professions or own businesses, have to file their taxes according to the regulations created the authorities. There is also a section of the population who earn in cash and they tend to think that such rules of taxes and authority backed regulations do not apply to them. If you think like that about Tax Audit and Reassessment, then it is time to reconsider.
Understanding The Premise – The first thing you need to know is that, despite getting paid and earning in cash, you will still fall under the purview of CRA and tax authorities. This means, you will have to pay your taxes and not doing so, will mean getting penalized by the CRA. You may think that getting paid in cash means, not having any records of earning, but that is also not true. CRA has an array of tools and techniques which is also ever growing to catch the tax cheats and collect tax from the underground economy.
Things That Happen Normally – One of the biggest reasons for thinking about easy tax evasion is the proclamation of your clients. There are multiple instances, where you are promised that the client will not be showing the payment for your work. It allows you to think that there is a leeway to evade paying taxes, but that is not true at all. The client will show each and every penny earned and spent notwithstanding the promises made. Due to that, the CRA will know about the source of your income. Additionally, to save their own skin, the client will definitely provide with your information.
As a result, to the information provided by your cash paying client, the CRA will know about your attempts at evading tax. They will come to your door, serve you with the notice and then ensure that you pay your taxes properly. If you have not been doing so for a long time, then you will be given the chance to pay for all the back taxes, failing to do so will result in fines and serious jail time. So, you need to know about Tax Audit and Reassessment and pay the amount due, otherwise, the CRA can penalize you.