QUESTION:
My brother in law is in trouble with the CRA. They have claimed that he
owes them over $100,000. He fought them at every level but was not able
to get them to change their mind.
He asked my advice. But my only thought was to declare bankrupsy and just
pull the plug.
But he said that was not a sure fire way to avoid the taxman. In some cases
people have been socked by the Superintendent of Bankrupsy to pay the whole
amount owed to the CRA or a large percentage.
So my next guess was to RUN AWAY.. head for a tropical island and just don't
hope that the government of Canada has a tax collection agreement with that
country.
Which made me wonder... WHERE IN THE WORLD could he run to that would be
beyond the reach of the CRA collection hounds ?
Where would you find a list of countries that would be hostile or
non-cooperative with the CRA ?
-------------------------------
david ingram replies:
This is a simple question and applies to the US and Canada.
So far as I know, the only two countries with a mutual collection process
are the US and Canada.
Therefore, you should be able to go to any other country in the world and
escape the clutches of the CRA or IRS as long as you have no assets or
property of any kind in either country.
In fact, Theoretically, if one kept all their assets in the Bahamas or
Panama or the Turks and Caicos, and declared $1,000,000 a year in tax and
sent their return in to the IRS or CRA and never paid it, I do not think
that anything really serious would happen.
There are lots of penalties for under-reporting or failing to file but if
you declare everything and don't pay, I know of no case where the taxpayer
has got in trouble.
The CRA could put you into Bankruptcy but they are still foiled by the
inability (as I understand it) of collecting on assets in countries like the
Bahamas.
I will put this out to the News List and see if there is another opinion out
there,.
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