The CRA's criminal investigations process

Tax evasion is illegal and deprives citizens and governments of public funds, which are essential to supporting critical infrastructure projects and important social programs and services like health care, child care, and education.

The Canada Revenue Agency (CRA) is committed to fighting tax evasion and other serious tax crimes. There are serious consequences to breaking the law.

Once convicted, tax evaders can face court imposed fines, jail time, and a criminal record — in addition to having to pay the taxes they tried to evade, plus interest. However, criminal investigations are complex and often require years to complete. There are many steps and several factors that can affect the length of the investigations.

Below is a general outline of the CRA's criminal investigation process:

Triggers for a criminal investigation
Files selected for investigation
Criminal investigation steps
The Public Prosecution Service of Canada's (PPSC) role
Consequences of tax crime

1. Triggers for a criminal investigation

Various sources of information may lead the CRA's Criminal Investigations Program (CIP) to initiate a criminal investigation, such as:

internal referrals within the CRA, including the various audit programs
tips from individuals through the CRA Leads Program
information from various law enforcement agencies
publicly available sources of information

2. Files selected for investigation

Not all files will trigger a criminal investigation.

A file is usually selected by:

analyzing information to determine the extent of the alleged tax offence(s)
assessing the circumstances, the availability of evidence, and the likelihood of a prosecution

The CIP will place priority on the following:

Significant cases of tax evasion with an international element
Promoters of sophisticated and organized tax schemes
Joint investigations with other enforcement agencies, including cases of tax evasion involving money laundering
Significant cases involving income tax and/or Goods and Services Tax/Harmonized Sales Tax (GST/HST) tax evasion, including the underground economy
Significant tax offences targeting benefits, credits, and false refunds

3. Criminal investigation steps

A criminal investigation has many steps. They include:

gathering evidence, interviewing taxpayers and witnesses, executing search warrants, and analyzing evidence
preparing a comprehensive investigation report
sending the report to the PPSC for review of the evidence to support the laying of criminal charges and subsequent prosecution

The CRA can communicate with the public at different stages of the criminal investigation by issuing an enforcement notification.

As with any criminal investigation undertaken by law enforcement, CRA criminal investigations of tax evasion are complex and usually require years to complete. Here are some factors that may affect the duration of the investigation:

complexity of the case
number of individuals involved
availability of information or evidence
degree of cooperation by witnesses or the accused
various legal tools that may need to be employed to gather sufficient evidence
need to get information abroad

4. The Public Prosecution Service of Canada's (PPSC) role

When the PPSC receives a report from the CIP, they independently review the evidence and decide whether to initiate and conduct a prosecution on behalf of the Federal Crown. If the PPSC decides to pursue criminal charges, the following steps are taken:

CRA investigators lay charges
the accused is summoned to court to stand trial
the accused receives full disclosure of the case against him/her

5. Consequences of tax crime

In addition to having to pay the full amount of tax owing, as well as interest and penalties, under the Income Tax Act and the Excise Tax Act, Canadians who are convicted of tax crime face serious consequences, including:

a criminal record
a possible jail sentence
significant fines imposed by the courts
negative media publicity

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2025-02-26

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