Markham Tax Evasion Lawyer

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There are two different tax fights. The CRA audit is about what you owe. The criminal prosecution is about whether you lied. The worst mistakes Markham taxpayers make happen in the space between those two, usually by explaining too much before knowing which fight they are actually in. This page maps the two statutes that create criminal tax charges, the penalty structures attached to each, the machinery that moves a file from audit to prosecution, and the narrow off-ramp that exists for people who act before the CRA reaches them.

By Fadi Matthew Kazandji, Founding Partner, Kazandji Law. Serving Markham and all of York Region from our Thornhill office. Updated July 2026.

The two statutes that create criminal tax charges

Criminal tax exposure in Canada runs through two provisions. Section 239 of the Income Tax Act covers income tax. Section 327 of the Excise Tax Act covers GST and HST. They are built the same way, and each lists the specific conduct that turns a tax problem into a prosecution.

Under section 239, it is an offence to make false or deceptive statements in a return, certificate, statement or answer. To destroy, alter, mutilate or hide the records or books of a taxpayer in order to evade tax. To make false or deceptive entries, or to leave out a material particular, in records or books. To wilfully evade or attempt to evade compliance with the Act or payment of taxes, in any manner. And to conspire with anyone to do any of it. A companion provision applies the same structure to obtaining or claiming refunds or credits you are not entitled to.

Section 327 mirrors that architecture for GST and HST: false statements in returns and applications, destroyed or altered documents, wilful evasion of payment or remittance of net tax, wilfully obtaining rebates or refunds you are not entitled to, and conspiracy. Notice the word remittance. GST and HST were collected by you from your customers, in trust for the government, and the statute criminalizes wilfully failing to hand net tax over, not just understating what you earned.

The penalty structure, mapped

Tax penalties are percentages, not round numbers, and they are keyed to the tax that was sought to be evaded, not to what you ultimately owed after reassessment. That distinction drives the whole sentencing fight, because every dollar the Crown can attach to the evasion figure raises the fine automatically.

Track	Income Tax Act, s. 239	Excise Tax Act, s. 327 (GST/HST)
Summary conviction	Fine of 50 to 200 percent of the tax sought to be evaded, or that fine plus imprisonment up to 2 years	Fine of 50 to 200 percent of the tax or net tax evaded or refund sought, or that fine plus imprisonment up to 2 years
Indictment (federal Crown's election)	Fine of 100 to 200 percent of the tax evaded, and imprisonment up to 5 years	Fine of 100 to 200 percent, or that fine plus imprisonment up to 5 years
Where the amount cannot be calculated	The percentage structure applies to the amount the Crown proves	Fixed ranges instead: $1,000 to $25,000 on summary conviction, $2,000 to $25,000 on indictment

Three features of this structure deserve emphasis. First, the minimums are fines, not jail: neither statute imposes a mandatory jail term, but both set mandatory minimum fines as a floor. Second, the fine is punishment, so it sits on top of the tax debt itself, with interest, and apart from any civil penalties assessed before the charge was laid. People routinely underestimate the arithmetic: a conviction over $200,000 of evaded tax can mean repaying that amount with interest and paying a fine of the same size again. Third, the indictable track belongs to the federal Crown's election, and that choice signals how seriously the file is viewed. Our Ontario tax evasion lawyers page sets out the provincial picture beyond York Region.

Audit or investigation? The line that decides everything

The CRA runs two very different processes, and the transition between them is where cases are won and lost before charges exist. An audit is administrative. Its job is to reassess what you owe, and it works through document requests, questions and adjustments. A criminal investigation belongs to the CRA's Criminal Investigations Program, whose published mandate is to investigate significant cases of tax evasion and other tax crimes and, where appropriate, refer them to the Public Prosecution Service of Canada for possible prosecution.

CRA's own materials describe how files reach investigators: referrals from its audit programs, tips through its Leads Program, information from law enforcement, and publicly available information. Its stated priorities include significant evasion with an international element, promoters of sophisticated schemes, joint investigations with police including tax cases involving money laundering, significant income tax and GST/HST evasion including the underground economy, and offences targeting benefits, credits and false refunds.

Watch the tools, because they tell you which process you are in. Audits ask for documents. Investigations execute search warrants, seize computers and phones, interview witnesses and build a report for prosecutors. The legal ground shifts too: an audit can compel your cooperation in ways a criminal investigation cannot, which is exactly why what you hand an auditor, and when, needs thought the moment the questions start feeling pointed. If new faces appear, the auditor goes quiet, or a warrant gets executed, treat the file as criminal and stop volunteering.

CRA investigates, the PPSC prosecutes, Newmarket hears it

A criminal tax file is unusual in Canadian prosecution: the investigator, the prosecutor and the courtroom all belong to different institutions. CRA investigators gather the evidence, execute the warrants and assemble a comprehensive report. That report goes to the Public Prosecution Service of Canada, which independently reviews the evidence and decides whether to initiate and conduct a prosecution on behalf of the federal Crown. If the answer is yes, charges are laid and, in the usual case described in CRA's own process materials, the accused is summoned to court rather than arrested.

What does that mean in practice for someone in Markham? Three things. You will face a specialized federal prosecutor, not a general provincial Crown, and these prosecutors know tax files cold. The disclosure will be enormous: years of banking records, working papers, imaged devices and analysis. And the courtroom will be the ordinary criminal court for York Region, which means the Newmarket courthouse at 50 Eagle Street West, the single building that handles every York Region criminal matter, bail included. There is a quiet advantage in that geography: no split between bail court and trial court, one registry, one commute. Toronto residents face a different map, covered on our Toronto tax evasion lawyers page.

One more institutional point matters. The CRA does not prosecute anyone, and a PPSC prosecutor exercises independent judgment about whether the evidence supports charges. That review is a genuine checkpoint, and defence counsel who engage early, carefully and in writing can sometimes influence what happens at it. Silence has value, but so does a well-timed, well-framed submission. Knowing which one your file calls for is the judgment part of this work.

When tax counts pick up fraud or laundering counts

Criminal tax files do not always stay tax files. CRA's enforcement materials confirm that charges in these investigations are laid under the Income Tax Act, the Excise Tax Act and, where the facts support it, the Criminal Code. Refund and benefit schemes in particular have been prosecuted as fraud, where the allegation is that public money was taken by deceit rather than merely that tax was understated. A Criminal Code fraud count changes the complexion of the file: different elements, different sentencing framework, and a different story being told about you in court. Our Markham fraud defence lawyer page covers that terrain, and the province-wide picture is on our Ontario fraud defence lawyers page.

The other add-on is laundering. Tax evasion has been a designated offence for money laundering since 2010, which means moving or converting the proceeds of the alleged evasion can generate its own count under section 462.31 of the Criminal Code, with its own 10 year maximum. CRA investigators can pursue laundering that arises from tax crimes, often in joint investigations with police. Stacked counts raise the total exposure, complicate resolution and sharpen immigration risk for anyone who is not a citizen. They also multiply the defence angles, because each count has elements the Crown must prove separately; the laundering side of that fight is mapped on our Markham money laundering lawyer page. And where the underlying allegations touch trading or capital markets, a separate enforcement system runs on its own tracks, covered on our Markham securities offence lawyer page.

The fact patterns that cross a York Region desk

Markham's economy is heavy with exactly the work arrangements that generate criminal tax files: self-employment, incorporated consultants, family-run businesses, construction trades and restaurants. The recurring stories are recognizable. A contractor who priced jobs in cash for a decade and reported the cheques. A consultant whose corporation paid for the household while the T1 stayed modest. A restaurant whose point-of-sale records and filed returns describe two different businesses. A new house bought and sold quickly, with an HST rebate claimed on facts that did not hold up. Crypto gains that never made it to a return because the exchange felt like a video game rather than a brokerage.

None of these people planned to be criminally charged. Most treated the problem as a bookkeeping debt they would sort out eventually, and eventually arrived wearing a search warrant. The legal point inside every one of these patterns is the same: the moment conduct involves a false statement, a false record or a deliberate decision not to report or remit, it crosses from owing into evading, and the CRA's investigators are specifically tasked with finding the crossings.

What pushes a file from reassessment to prosecution

Not every audit adjustment becomes a charge, and understanding what attracts investigators is part of defending, and avoiding, these files. The CRA's published enforcement priorities are a usable map. Significant evasion, especially with an international element. Promoters of sophisticated schemes. Joint investigations with police, including tax evasion tangled with money laundering. Serious income tax and GST/HST evasion including the underground economy. And offences aimed at benefits, credits and false refunds, where public money went out the door rather than tax not coming in.

Translated into practice, the escalation drivers are magnitude, duration, documents and design. A one-year understatement reads like a mistake. The same understatement repeated across six years, supported by invoices that were created rather than kept, reads like a plan. False paper is the accelerant: fabricated receipts, altered ledgers and backdated records move a file toward prosecution faster than any dollar figure, because they prove the mental element the Crown otherwise has to infer. If any of this describes documents in your past, the response strategy needs to be built around it now, not after disclosure lands.

The voluntary disclosure off-ramp, and when it closes

There is one door out of this entire building, and it only opens from the inside. The CRA's Voluntary Disclosures Program lets taxpayers come forward to correct errors or omissions before the CRA comes to them. The published position is direct: if your application qualifies, you receive relief from penalties and part of the interest, as well as relief from criminal prosecution. You still pay the taxes you owe, plus partial interest. Nobody is forgiven the debt. What a qualifying disclosure buys is the removal of the criminal dimension and the penalty load.

The program changed effective October 1, 2025, and the current structure distinguishes between applications. Unprompted applications, filed before any CRA contact about the issue, attract more generous relief. Prompted applications, filed after the CRA has started asking, attract less. A separate stream handles wash transactions for GST/HST. Relief is granted case by case, and nothing about the program is automatic, which is why promises about outcomes should make you suspicious of whoever is making them.

Timing is the entire game. The door narrows once the CRA reaches out, and it is not designed for people already under criminal investigation. That creates a hard, time-sensitive judgment call for anyone sitting on years of unfiled returns or unremitted HST: disclose now, on advice and properly packaged, or hold and defend. It is a decision to make with counsel, quickly and quietly, because the option shrinks with every week and disappears with a knock on the door.

Years of unfiled returns, and no CRA contact yet

A surprising share of the people who call us have not been charged with anything. They have simply stopped filing, sometimes for many years, and the silence has become its own source of dread. If that is you, two facts should anchor the thinking. First, non-filing compounds: interest accrues, remittance obligations keep arriving, and each new unfiled year deepens the pattern the Crown would one day point to. Second, you are, right now, in the strongest position you will ever occupy, because the CRA has not yet made contact and the unprompted door to the Voluntary Disclosures Program remains open.

The move is not to panic-file a decade of returns overnight. Late filings are statements, and statements need to be accurate, consistent and strategically sequenced. The move is a quiet assessment with counsel and an accountant: what is actually owed, what records exist, whether the disclosure route fits, and how to package it so the relief the program offers is realistically available. People who take that path pay what they owe. What they generally avoid is the penalty load and the criminal file, and that trade is the entire reason the program exists.

Where the defence attacks a criminal tax case

Criminal tax prosecutions look overwhelming from the accused's chair: the state has your returns, your bank records and years of hindsight. But these cases have consistent pressure points, and experienced counsel works all of them.

• Wilfulness. Evasion is a crime of intent. Owing money is not evasion. Sloppy books are not evasion. The Crown must prove deliberate conduct: false statements made knowingly, records destroyed to defeat the Act, a plan to evade rather than a failure to cope. The distance between disorganized and dishonest is where many of these trials are decided.
• Reliance and delegation. Files where an accountant, bookkeeper or spouse ran the paperwork turn on what you knew, what you were told, what you signed and what you did when problems surfaced. Genuine reliance on a professional bears directly on intent. It is not a magic shield, and the paper can cut both ways, which is why we reconstruct the entire advice trail before deciding whether it is your best evidence or the Crown's.
• Quantum. The fine is a percentage of the amount the Crown proves was sought to be evaded. Every dollar knocked off that figure reduces the mandatory fine floor, so valuation, allocation and methodology fights are not accounting trivia. They are sentencing advocacy done early.
• Disclosure and delay. These are document prosecutions, and the Crown must disclose everything relevant. Gaps, late production and unmanageable volume all matter, and the constitutional time ceilings from the Supreme Court's Jordan decision put real discipline on a file that drifts.
• Charter issues. Search warrants, the handling of material gathered during the audit phase, and the boundary between compelled audit cooperation and criminal investigation all raise litigable issues in the right facts.

Not every file goes to trial, and not every file should. But every file negotiates better when the Crown knows the defence has found the soft spots.

The first 72 hours after a search or charge

If CRA investigators have executed a warrant at your home or business, or a summons has arrived, the next three days matter more than the next three months. Here is the sequence we walk clients through.

Do not explain, and do not tidy. Explanations given in shock get compared against documents for years afterward. And cleaning up the books is not housekeeping in this context; destroying, altering or hiding records is itself one of the listed offences, and post-search edits are exactly what investigators look for on the imaged devices they already have.

Preserve and inventory instead. Write down what was taken, who attended, what was said and to whom. Tell your accountant and your staff that all CRA contact now runs through defence counsel, because informal follow-up calls to your bookkeeper are still evidence gathering. If the business has remittance obligations coming due, keep meeting the current ones; the case is about the past, and the present should not make it worse.

Then map the track with counsel before taking any step that feels helpful. Repayment, amended returns and voluntary disclosure all have their place, but each one can also hand the Crown an admission if it is timed or framed badly. Corporations need their own analysis, since companies are regularly charged alongside their directors and a corporate conviction carries its own fines and fallout with banks, insurers and licensing bodies. Sometimes the person and the company need separate advice, and it is far better to learn that early.

How long it takes, and what living under it is like

Criminal tax cases move slowly, and the slowness is structural. The investigation itself often runs for a year or more before charges, because investigators are assembling banking records, third party production and device extractions into a report a prosecutor can act on. After charges, disclosure arrives in waves, and each wave takes months to review properly. Add pre-trial motions in the right file and a trial measured in weeks rather than days, and the honest answer to how long is usually: months at minimum, and often years.

Two forces keep that timeline from becoming abusive. The first is the Supreme Court's Jordan framework, which sets presumptive ceilings on the time from charge to the end of trial, 18 months in the provincial court and 30 in the superior court, net of defence delay. Document-heavy prosecutions are precisely where those ceilings bite, and a defence team that documents every period of Crown and institutional delay is building an argument it may one day need. The second is judicial case management, and York Region files benefit from Newmarket's virtual case-management courts, which spare working people repeated mid-week trips for five-minute appearances.

Living under the case is its own project. Most tax accused are on a summons or straightforward release, not restrictive bail, so the practical burdens are different: keeping the business operating while its records sit in an evidence room, managing banking relationships that get nervous around criminal charges, deciding what to tell partners, lenders and key employees, and keeping current filings and remittances clean because nothing looks worse at sentencing than fresh non-compliance accumulating behind the charge. We treat all of that as part of the file, because it is.

What the evidence actually looks like

People imagine tax trials as arguments about numbers. They are really arguments about documents and the story the documents tell. The core of a prosecution brief is usually years of banking records set against filed returns, supplier and customer records obtained from third parties, payroll and point-of-sale data, and whatever the imaged phones and laptops held: messages about pricing in cash, spreadsheets that never matched the filings, drafts that show what someone knew and when.

That evidence has two properties worth understanding early. It is voluminous, which creates both delay risk for the Crown and review cost for the defence, and it is interpretive. A deposit is just a deposit until someone characterizes it as unreported revenue. Characterization is where the defence lives: loans from family, transfers between accounts, gifts, savings recycled through a business, all of it looks identical in a bank statement until context is proven. We build that context document by document, because in a percentage-fine regime every recharacterized dollar pays for itself twice.

The publicity dimension deserves a word too. Court files are public, and the CRA publishes enforcement notifications about charges and convictions, drawn from court records, precisely because deterrence is part of its mandate. For a Markham business owner or professional, reputation management belongs inside the defence plan from day one. That means nobody speaks except counsel, resolution timing is chosen deliberately, and the record that gets created is the smallest accurate one available. No lawyer can promise suppression, and you should be wary of any who does. What counsel controls is what gets said, when, and by whom.

Why Kazandji Law for a Markham tax prosecution

We are criminal defence counsel, and that is the point. By the time a tax file turns criminal, the accounting fight is over and a prosecution fight has started: burden of proof, wilfulness, admissibility, disclosure, sentencing exposure. We work alongside your accountant or tax counsel rather than replacing them, and we keep the criminal defence lens on every decision, including whether a disclosure or repayment step helps or hurts. Results from our financial crime practice are collected on our case successes page, and the rest of our York Region work is on the Markham criminal defence lawyer hub.

Clients reach us through four offices: our Toronto headquarters at 180 John St, Unit 320; our Thornhill office at 7191 Yonge St, Suite 310, minutes from Markham and closest to York Region's courts; and offices in North York and Oakville. Consultations are free and confidential. If the CRA is already asking questions, the consultation should happen before your next answer.

A practical note on privilege: conversations with your lawyer are protected in ways conversations with your accountant generally are not, and in a criminal tax file that difference is not academic. Where forensic accounting is needed, we retain it through counsel so the analysis and the working papers sit inside the defence, and the privilege belongs to you. Structure like that costs nothing extra and changes what the Crown can ever see.

This page is general legal information for people in Markham and York Region, not legal advice about your situation. Tax and criminal law change, program rules change, and application depends entirely on the facts. Statutory references are to the Income Tax Act, the Excise Tax Act and the Criminal Code as amended to the date above. If you are under audit, investigation or charge, speak with a lawyer before acting on anything here. Kazandji Law: 7191 Yonge St, Suite 310, Thornhill and 180 John St, Unit 320, Toronto. 647-588-3234.