Originally Posted by QuarterTon
Can you elaborate a bit TorontoCFE? Were they forced to pay taxes or had they already been paying? if they hadnt been paying their taxes did they get the expected penelties etc?
Of the 6 I have most knowledge of:
1. 5 came to the attention of the CRA because of activities not related to poker. What attracted attention was things like too many all-cash deals, not reporting investment income and a normal business audit.
2.1 was reported by a neighbour. This led to many large deposits being found and a check of their income tax return showed no income reported for 3 years (after the guy had made a decent living for 10 years and dutifully filed correctly.
3. In 3 cases, the income from poker was not significant for the CRA to worry about and they focused on the other activiities. In 2 the person accepted a reassessment to include poker in their income and paid the tax without further fight in order to get the matter resolved. They paid only the tax with no penalty or even interest. In 1 the issue is still waiting to be resolved.
My understanding (3 party) to the cases was the CRA is implying (as the are wont to do) that if:
1. The amount involved is not significant they won't waste their time and will overlook it even if they are aware of the earnings.
2. If the amount is large and they think you haven't been trying to hide your activities and don't test them in court , they will want their tax and be happy with that.
3. If you do take it to court, they are looking for the tax plus another amount equal to the tax as a penalty, plus interest.
4. There is no desire to go for criminal or anything but monetary damages if only poker earnings are involved.
I'm aware of these cases through friends / associates so some of the details (which may or may not be important) I may not know of.
I am not directly representing any one who has been audited.