The CRA Underground Economy Advisory Committee includes industry partners such as Restaurants Canada and Canadian Home Builders' Association, experts and professional organizations including the Chartered Professional Accountants of Canada and was set up by CRA to help combat Canadian tax evasion through unreported cash transactions. Minister of National Revenue Diane Lebouthillier and Parliamentary Secretary to the Minister of National Revenue Emmanuel Dubourg met in early June 2016 with members of the Committee to look at ways to join forces to more actively combat the underground economy in Canada. The Committee advises the Minister and the Canada Revenue Agency and collaborates with members on measures to reduce the acceptability of and participation in the underground economy with a view to making under the table cash transactions socially unacceptable. The Committee’s advice and recommendations will assist the CRA in improving its methods and strategies to more effectively identify Canadians and who commit tax fraud by not declaring their income and not paying their fair share of taxes and to bring them into compliance with the law and to prosecute tax cheats for income tax evasion. Tax audits of the cash economy remain a CRA focus. The CRA’s Underground Economy Strategy focuses on three strategic themes to try to reduce participation in the underground cash economy:
- further refine the CRA’s understanding of the Canadian underground cash economy;
- seek to reduce the social acceptability of participation by Canadians in the underground cash economy; and
- deploy a range of initiatives to encourage tax compliance and reduce participation in the underground cash economy.
As Canadian tax lawyers we provide income tax advice to taxpayers who have engaged in unreported cash transactions and have decided to correct their back tax filings. Provided they have not been subject to a CRA tax audit they can submit a CRA voluntary disclosure through our Toronto tax law firm to correct unreported GST/HST or unreported income. By submitting a successful tax lawyer voluntary disclosure there will be no tax evasion prosecution and no penalties and there may be an interest reduction. The Minister is quoted as saying: “I am pleased to work with industry partners on this important issue - the fight against the underground economy. Their insight will help the CRA deliver on the government’s commitment to combat tax evasion and tax avoidance. The vast majority of Canadians pay their fair share of taxes and they must have confidence that the tax system is fair for everyone.”