CRA Tax Audit Small Town Construction Contractors

CRA Investigations of Unregistered Small-Town Subcontractors

In a special tax audit CRA investigators reviewed lists of municipal building permits in smaller communities to check on worksites for unregistered small-town subcontractors. The review of 8,396 building permits identified 2,751 unregistered building contractors with a resulting income tax collection of $4.5 million. This is part of the CRA focus on the underground economy that has been a CRA priority for several years since the construction sector has been identified as being of particular concern for unreported income. As part of this construction sector tax audit crackdown tax investigators also targeted installers who work for hardware and home improvement stores. CRA auditors recently investigated 93 hardware stores in 19 different communities, and found that 7 percent of installers were income tax evaders. In those cases CRA collected $4.5 million in taxes, $559,000 in interest payments and $843,000 in penalties. Building contractors with unreported income or GST/HST, or unifled tax returns, can submit a CRA voluntary disclosure through our top Canadian tax lawyers before CRA auditors target them and avoid tax evasion prosecution, tax penalties and often benefit from ain interest reduction on the unpaid taxes.