SP and Income Tax Fraud

[google_123]

Just an FYI.

I too fell behind on my taxes. I ignored calls from my book keeper and accountant. When I was out chasing more revenue, I let the admin part of my job slip and I paid for it. CRA wasn't after me since I was only a few years behind. My accountant assured me I was still good since he has clients that have not filed in over 10 years. All he did for me was issue my T4's for me "pending further info" and CRA was happy. Obviously, these huge expenditures crimped my pooning style but I am getting back to normal again (thankfully!!).

I know the helplessly you are falling behind feeling quite well. In the end it did take its toll on me. I spent tens of thousands getting caught up with my book keeper and accountant, tens of thousands in back taxes plus penalties and it was a huge weight off my shoulders. They (CRA) are still on my file and I haven't heard a peep from them in a while. My accountant has assured me that the file is being reviewed and is in touch with them about any questions.

The message I am trying to communicate is you can get far behind, you can get caught up and as long as your books are accurate with revenue in and reasonable expenses there is light at the end of the tunnel.

I think what we can all take from these 6 pages is.

option 1 - Deal with professionals with experience in backed taxes and handling the CRA to manage your backed taxes. In doing this, you can reap benefits of the government and purchase/invest in things without second thinking if the CRA will catch you. It might seem daunting, but like anything in life, one thing at a time and before you know it, it'd be done and relatively stress-free!

option 2 - Don't file your taxes, don't pay taxes, play it smart, or be burned by fines/backed taxes.

 

[Violet]

^Pretty much

I agree that jail-time is pretty much non-existent for any individuals that are dishonest on their taxes.

And Violet, great reply but I don't think ignorance can be used as an excuse. And depending on the individual, various things in life can be daunting, but do you ignore them? No.
Like finding a career/job, eventually you will need to tackle the issue. Or the knocking noise in your car, this will have to be addressed. And exactly with regards to tax-free income by providing a service.

Any SP can google, or ask friends or do research themselves.

I really don't care if people try to not pay taxes, it's their problem not mine. Heck, good for them if they can keep on doing it without getting caught. There is a huge blackmarket for tax-free services. It will never change. But to say you didn't file taxes because of ignorance, that's not an excuse. I'm sure not paying taxes is a huge part of the issue. Taxes on 55k income would be near 10k not factoring in C.P.P and E.I. 10k is a nice chunk of change anyone would love to keep.

Anyways, I digress. I believe any SP who hasn't filed a tax, do research or ask their accountants. Or if they plan on keep avoiding filing taxes, to be smart about living within "their means" - otherwise, face some bad consequences.

If I was an SP, having all that cash would be quite scary. I mean, you could put it in a security box in your apartment/house, but what if it get's robbed?
If an SP is your #1 career, how can you buy a house? You would need a trustworthy friend/family member to buy it (and they would have the means to) and give them the cash. But their name is on the deed, so what if things turn sour? There's so much issues surrounding under the table money and could backfire if you aren't diligent about it.

Hmm who knows, maybe I would just consistently buy gold/silver bullion and keep those?

No, ignorance is not an "excuse" or justification, I never said that. Just explaining that ignorance and fear are common reasons, which in this situation I feel are often pretty understandable and at least non-horrible. It is simply not as easy or simple for an SP to file taxes as it is for many other jobs, especially those jobs where you are an employee. Absolutely any SP should do research on filing taxes, ask friends and/or try to get an accountant. But not all can or know how to do those things very easily and without fear about people finding out they are a sex worker and the consequences that can come from that, and I sympathize with that.

Also, I'm not saying money is not a factor at all, just that I don't think the sole motivation is pure selfish greed like some posters have suggested. Many girls I've known who worked through agencies/brothels/MPs took in around $50,000/year before agency fees and directly work-related necessary expenses, and netted half that. They don't get to choose how much they charge. It is complicated to determine what can be legally claimed as a business deduction and how to document all that. It's even more complicated and overwhelming to go back and do the things needed to properly file taxes once you've gotten behind, as BBB pointed out. Most SPs who are independent and charging high rates do seem to file/pay their taxes - they can afford accountants and their reasons to file/pay outweigh the reasons not to. I don't think the average SP is as wealthy as many assume.

At least this thread has taken on a friendlier tone recently and some particular posts have been removed

 

[UhOh]

Duplicate .

 

[UhOh]

Ive been reading the thread and find is an interesting topic. Im blessed in that I make a pretty good wage and as a result I have a significant tax bill. Fortunately BC has some of the lowest rates in the country.
For the risk an sp has to take and the stigma that comes with the profession I can understand why she might not want to approach someone for tax advice and disclose her income source. I can understand both sides of the issues but for me I have no problem with her keeping every penny.

 

[newatit]

just to clarify, the SP in this case finally filed after about five years or so of not filing, then filed false returns. She was a business savy gal, but took her chances. And somewhere she had to lie to a tax preparer. Many tax preparers have been fined and dealt with for false returns, so the one she dealt with was probably unaware of the real situation.

Yes been a good thread with good viewpoints, the bottom line doesn't change. No matter what play it square with Revenue Canada, the results of not doing so can be pretty nasty.

Lifestyle , addresses, possessions, etc are all related to your income, that makes it hard to enjoy the money and hide it at the same time. Not happening.