Overstating deductions, and understating incomes are common ways people cheat on their taxes to the tune of $15 billion a year in Canada. People usually have their own personal reasons for cheating including feeling they owe too much or in anger against the Canada Revenue Agency. The CRA uses a number of ways to correct information such as through whistle blowers, encouraging honest reporting or offering voluntary disclosures. Of those who voluntarily disclose, two-thirds are motivated by external factors such as avoiding a penalty, and one-third did so because of a personal sense of ethics.

Key Takeaways:

• Cheating occurs when a taxpayer deliberately overstates a deduction (such as a business expense) or understates income (such as cash tips).
• The CRA combats incorrect information on tax returns through: 1) encouraging honest reporting on tax returns; 2) whistleblowers; and 3) voluntary disclosures.
• If a taxpayer has cheated in the past, a voluntary disclosure allows them to report the correct amount without fear of penalty or even jail time.

“It’s probably no surprise to you that people cheat and lie on their taxes. And they do this to the tune of $15 billion dollars per year.”

Read more: https://www.toronto.com/opinion-story/9261801-your-cheatin-heart-why-do-taxpayers-lie-/