The Criminal Investigations Program

The Canada Revenue Agency's Criminal Investigations Program investigates significant cases of tax evasion and, where appropriate, refers cases to the Public Prosecution Service of Canada for criminal prosecution.

What is tax evasion?

Tax evasion is a criminal offence that involves deliberately ignoring the law to evade paying taxes. Those who engage in tax evasion typically conceal income or assets, claim expenses that are non-deductible, overstate their expenses, or wilfully refuse to comply with legislated reporting requirements.

The Criminal Investigations Program focuses on the most serious cases that meet one or more of the following criteria:

  • significant cases of tax evasion, with an international element
  • promoters of sophisticated and well-organized tax schemes aimed at defrauding the Government of Canada
  • joint financial crime cases with other enforcement agencies, including cases of tax evasion involving money laundering and terrorist financing
  • significant cases that may involve the evasion of income tax, goods and services tax, and harmonized sales tax, including the underground economy.

What’s the difference between an audit and a criminal investigation?

An audit is the verification of information provided by taxpayers to the Canada Revenue Agency (CRA). Audits are considered a civil matter, and the taxpayer has to defend their position. Taxpayers may have to make payments to the Receiver General for Canada if an audit determines that more tax is owed.

In a criminal investigation, the Crown has to prove beyond a reasonable doubt that the taxpayer intentionally contravened Canadian tax laws. Those being investigated have rights under the Canadian Charter of Rights and Freedoms. If convicted, a taxpayer may face both court fines and imprisonment, in addition to paying the taxes, penalties and interest owing.

What happens during a criminal investigation?

The CRA must tell the affected taxpayer(s) that they are under investigation. The CRA may only obtain evidence through production orders, international treaty requests, and search warrants issued by a judge. Next, taxpayers and potential witnesses are interviewed, search warrants are executed, and evidence is analyzed. When evidence supports going ahead with a case, a comprehensive report recommending criminal prosecution is prepared and sent to the Public Prosecution Service of Canada.

Consequences if convicted

In addition to having to pay taxes owing, as well as interest and penalties, under the Income Tax Act and the Excise Tax Act, individuals convicted of tax evasion can face court fines ranging from 50% to 200% of the taxes evaded, and up to five years in prison.

In some cases, an individual may be charged with fraud under section 380 of the Criminal Code, which carries a prison term of up to 14 years on conviction.

Court convictions are published in local, regional, and national media to draw attention to the consequences of tax evasion and fraud. The CRA will also publicize criminal convictions and other high-profile enforcement actions through enforcement notifications.

In addition, the fingerprints of individuals charged with, or convicted of, tax evasion are kept in the Canadian Police Information Centre (CPIC) and are available to all domestic law enforcement agencies. In addition, foreign law enforcement agencies with links to the CPIC system may consider such an individual as not admissible to their country. This could limit an individual’s foreign travel.

To learn more about the consequences of evading taxes, watch the Criminal Investigations videos

Getting results

Working with the CRA's Criminal Investigations Program, federal prosecutors had an 89% conviction rate for the 2016-2017 fiscal year.

From April 1, 2016, to March 31, 2017, the work of the CRA's criminal investigators led to:

  • the conviction of 37 taxpayers, involving $32.7 million of evaded federal tax
  • court sentences totaling about $10 million in court fines and 50.6 years of prison time

In addition, from April 1, 2016, to March 31, 2017, the work of the CRA led to:

  • 335 cases referred for criminal investigations
  • 123 search warrants executed
  • 32 files where criminal charges were laid under the Income Tax Act, Excise Tax Act, and/or Criminal Code
  • 12 joint operations with other law enforcement agencies (that is, federal/provincial/municipal police forces and/or other government/regulatory organizations)

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