Tax Evasion

Tax evasion is the offence of wilfully evading or attempting to evade the payment of tax, or wilfully making false or deceptive statements on a return, contrary to subsection 239(1) of the Income Tax Act. It is distinct from simply filing late or failing to file: evasion requires a deliberate intent to mislead the Canada Revenue Agency or to defeat the operation of the Act, such as concealing income, claiming fabricated expenses, or keeping a second set of records. Conviction can carry a fine of 50% to 200% of the tax evaded and imprisonment of up to two years on summary conviction, or up to five years on indictment, in addition to the tax, penalties, and interest still owed. Because evasion turns on proven intent, the routine non-filer who is behind on returns without any scheme to deceive is generally outside its scope. A valid voluntary disclosure provides protection from prosecution for the disclosed conduct.