Specialized Prosecutions
Tax Fraud Lawyer in Canada
A tax fraud lawyer defends charges under Income Tax Act, s. 239 and Excise Tax Act, s. 327, with Criminal Code s. 380 in serious cases. This page sets out what the offence covers, what the Crown must prove, the penalties on conviction and the defences that are commonly available, then lists criminal defence firms you can contact.
Income Tax Act, s. 239 and Excise Tax Act, s. 327, with Criminal Code s. 380 in serious cases·hybrid offence
What Tax Fraud covers in Canadian criminal law
Tax offences are prosecuted primarily under section 239 of the Income Tax Act and section 327 of the Excise Tax Act, which cover making false or deceptive statements, destroying or altering records, and wilfully evading payment of tax. In serious cases the Public Prosecution Service of Canada also lays fraud charges under section 380 of the Criminal Code.
The critical distinction in these files is between an audit and an investigation. In R. v. Jarvis the Supreme Court held that once the predominant purpose of an inquiry becomes the determination of penal liability, the Canada Revenue Agency's compulsory audit powers can no longer be used, and Charter protections apply. Identifying the point at which that line was crossed is often the whole defence.
Section 239 requires wilfulness. Negligence, poor record-keeping, or reliance on an accountant does not establish the offence. The Crown must prove that the accused knowingly made a false statement or deliberately evaded tax.
What the Crown must prove
The Crown carries the burden of proving every element beyond a reasonable doubt. A reasonable doubt on any one of them means an acquittal.
- A false or deceptive statement in a return, certificate, statement or answer, or an evasion of tax
- Wilfulness, meaning a deliberate intention rather than carelessness
- The amount of tax at issue, which drives the fine and the sentence
- Lawful collection of the underlying records, consistent with R. v. Jarvis
- Identity of the accused as the person responsible for the filing, including directors of a corporation
Penalties and consequences on conviction
- Fines of between 50 and 200 percent of the tax sought to be evaded under section 239(1)
- Imprisonment of up to two years on summary conviction and up to five years on indictment under section 239(2)
- Fourteen years maximum where fraud is charged under section 380 of the Criminal Code
- Civil gross negligence penalties and interest, which continue regardless of the criminal outcome
- Professional discipline and loss of designations for accountants and other regulated professionals
Common defences
- Absence of wilfulness, including good faith reliance on a professional advisor
- A Jarvis application to exclude records obtained under audit powers after the investigation had begun
- Section 8 Charter challenges to search warrants executed at homes and accountants' offices
- Disputing the quantum, since the amount evaded drives both the fine and the sentence
- Attribution issues in corporate structures with several directing minds
- Section 11(b) delay, which is common in lengthy Canada Revenue Agency investigations
Tax fraud lawyer: frequently asked questions
- What is the difference between tax evasion and a reassessment?
- A reassessment is a civil matter about how much tax is owed. Tax evasion under section 239 is a criminal offence requiring proof beyond a reasonable doubt of a wilful false statement or deliberate evasion. Owing tax, even a great deal of it, is not itself a crime.
- Can the Canada Revenue Agency use my audit answers against me?
- Not once the predominant purpose has shifted to investigating penal liability. R. v. Jarvis holds that at that point the compulsory audit powers can no longer be used, and information obtained afterwards under those powers may be excluded. Establishing when that shift occurred is a central defence task.
- Does a voluntary disclosure protect me?
- A valid application under the Canada Revenue Agency's Voluntary Disclosures Program can provide relief from prosecution and penalties, but only if it is genuinely voluntary, meaning it is made before any enforcement action has begun. Once an audit or investigation is underway, the disclosure will usually be rejected.
Find a tax fraud lawyer
Criminal defence firms listed on Criminal Lawyers Canada that identify Tax Fraud among their practice areas. Featured listings appear first.
Tax Fraud lawyers by province