Published: March 9, 2020
Last Updated: March 17, 2020
Erhard Unger was convicted in Penticton, BC of failing to file income tax returns and was fined $1,000. This amount is the minimum penalty possible, and he could have been liable for a much larger penalty and even jail time. He deliberately failed to file Canadian tax returns from 2012 to 2015 despite receiving demands to file tax returns from CRA. The income tax returns were filed in January of 2016 but he had already been charged with failure to file tax returns. The Canadian Income Tax Act has a number of penalty provisions, with tax evasion and tax fraud being the most well known and bearing the most severe penalties, including jail time of up to 5 years in the case of an indictment. Failure to file tax returns is an offence under subsection 238(1) of the tax act and carries a penalty of between $1,000 and $25,000 and jail time of up to 12 months. Mr Unger’s failure to file the returns was deliberate and stemmed from a dispute with CRA. He claimed a bad debt on his tax return in 2002 but it was denied by CRA. He said he that he had tried for five years to find out why his bad debt claim had been denied, but CRA did not give him an explanation. Disputes with CRA are common, but there are procedures to handle those disputes, including Notices of Objection for denied claims or service complaints for service problems. Our top Toronto tax lawyers solve these problems on a daily basis. Failing to file tax returns is the wrong way to deal with a CRA tax dispute.
"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."