The Straight Goods for Late Filers, Requests to File and Demands to File
Let’s get a few things straight.
Tax Evasion and late filing have little to do with each other. Being charged with failure to file a tax return is nothing to do with being charged with tax evasion.
If you have not been charged with failure to file a tax return, the only thing you have to worry about is how much tax you are going to owe. You do not lead legal help.
Don’t let anyone scare you into running to a lawyer if all you have to do is file your tax returns.
You have to file a tax return if you want your tax credits. That is CRA’s big stick in getting people to file their returns.
You have to file tax returns if you have a positive NET income.
You should file your taxes if CRA requests it to be so. Requests automatically become demands to file.
You have to file your taxes if CRA sends you a Demand to File. Otherwise you could be criminally charged for failing to file.
OK… that is how it is….
Now if you are as CRA likes to label you a “NON FILER,” you are more than a few years behind in your income tax return filing. CRA can be pretty aggressive, so you do need to get a tax professional to do the stick handling and get you the time you need to get your affairs in order. Getting things fixed is really about getting off your butt and doing what you should have done a few years ago.
CRA loves to railroad taxpayers into a rush job of doing their taxes, then audit and deny expenses while accusing you of gross negligence. Hardly a fair approach to the matter.
If you do a bad enough job of doing your taxes you will certainly need a tax professional to get you out of the mess. The situation will be worse if you were in such a hurry you forgot a lot of income.
But just for getting your past year’s taxes caught up, you just need to get things done correctly and you need someone to run interference with CRA so you get the time to have the job done correctly.
There is no need for legal protection if you are filing past due taxes. It will do nothing for you except run up your bill. There is no protection against owing taxes. Check out the section on voluntary disclosure being a trap, located on this web site.
Do you need a lawyer for filing late taxes? Not unless you want to try sending in false tax returns, and even then not likely a lawyer will be anything more than an extra expense. Lawyers do lawyering and accountants do accounting, and we think the TaxRep are the overall best value proposition.
Lawyers are great if you have a criminal charge… just make sure that the lawyer you pick has lots of litigation experience. Before seeing your lawyer, get your records 100% audit ready. Once your records are audit ready, you can go to your lawyer and you won’t even need to mention who prepared them, if you are worried about client confidentiality. Not that you are likely to need the confidentiality.
Either you or your lawyer you needs to hire a seasoned tax pro to get your records audit ready for preparing your tax returns, so that if you get an audit there will be nothing to fear from CRA. You can save yourself a lot of money by hiring a TaxRep yourself.
On that note… if you think that going to a lawyer is going to protect you from filing false tax returns, if you do a lawyer protected confession; you are simply dreaming. I wish it were true. If that were true… I personally, would become a big time tax fraud filer. I would claim all my expenses and lie about my income, then I would go to a lawyer, do a confession and be protected from owing taxes. Oh! How I wish that were true!
I see this as paramount to committing the criminal act of murder, then going and having a lawyer do a formal confession to court. Then expecting I would walk away scott free.
I know from my extensive experience doing audit ready books, followed up with a proper tax return that exactly matches the bookkeeping, that matches with the audit trail, and audit is not much different from submitting a company expense report invoice. All you have to do is prove you spent the money for business purposes.
So the idea of going to a lawyer to file back taxes, is pretty lame. Just go to a TaxRep who knows audit ready bookkeeping and get it done right.
Having said that… the radio ads are true… being a late filer means you are more likely to be audited. That is why you go to the TaxRep to get your taxes done right and then you can just say “Forget about it! And sleep well at night.
Don’t be scarred into overkill and you won’t become “Road Kill.” Do your research from a mental clarity zone. Think it out and then make an informed decision. There is a ton of information on this site. You owe it to yourself to be an informed taxpayer.