Personal Finance

My employer lied about my income, what can I do?

  • Last Updated:
  • Jul 11th, 2010 1:36 pm
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Newbie
Jan 2, 2009
49 posts
2 upvotes
I've been through this... listen carefully.

When I was younger, the place I was working at did this. Come T4 time, what they paid me and what they reported were two different things.

The first step I took was to get them to correct this issue... no luck. I did this in writing. This is important.

My next step was to write the CRA Enforcement branch and share my concerns. You'll be surprised how quickly you will get a response. Drop this off at a CRA location and time stamp it OR send it registered.

Anyhow, CRA made me file my return with the information provided on the T4. Over the coming months, I had numerous people asking for copies of pay stubs. Eventually my return was adjusted accordingly to what I owed, and excess taxes paid refunded + interest.

I quit after they wouldn't amend the T4... as I heard from one my old co-workers, CRA showed up with the Police to confiscate almost every piece of paper.

The short of it, CRA is very powerful monster... don't get caught in its jaws. If you paid extra money on your taxes, don't sweat it, you will get it back. Just be sure to keep good records and be honest with them.

The fact is, this smells fishy and you need to CYA.
Deal Fanatic
May 29, 2006
7155 posts
671 upvotes
This is quite the gong show of a thread.

I make x amount of money, I dont get paystubs, my employer claims I make x amount of money.

Jump ship asap.

Who doesnt get a paystub???????
Deal Addict
Apr 5, 2007
1105 posts
133 upvotes
Canada
tmtu wrote:
Jul 9th, 2010 8:40 pm
I've been through this... listen carefully.

When I was younger, the place I was working at did this. Come T4 time, what they paid me and what they reported were two different things.

The first step I took was to get them to correct this issue... no luck. I did this in writing. This is important.

My next step was to write the CRA Enforcement branch and share my concerns. You'll be surprised how quickly you will get a response. Drop this off at a CRA location and time stamp it OR send it registered.

Anyhow, CRA made me file my return with the information provided on the T4. Over the coming months, I had numerous people asking for copies of pay stubs. Eventually my return was adjusted accordingly to what I owed, and excess taxes paid refunded + interest.

I quit after they wouldn't amend the T4... as I heard from one my old co-workers, CRA showed up with the Police to confiscate almost every piece of paper.

The short of it, CRA is very powerful monster... don't get caught in its jaws. If you paid extra money on your taxes, don't sweat it, you will get it back. Just be sure to keep good records and be honest with them.

The fact is, this smells fishy and you need to CYA.
CRA investigators can, with a court warrant, enter your house, search and seize everything they consider related to the investigation.

Did we mention you get to have a 'shame page' on the CRA site if you are convicted? http://www.cra-arc.gc.ca/gncy/lrt/crmnl-eng.html
Deal Addict
Oct 9, 2005
1787 posts
143 upvotes
cahk wrote:
Jul 9th, 2010 9:28 pm
CRA investigators can, with a court warrant, enter your house, search and seize everything they consider related to the investigation.

Did we mention you get to have a 'shame page' on the CRA site if you are convicted? http://www.cra-arc.gc.ca/gncy/lrt/crmnl-eng.html
If they didn't need a warrant, then why would they have got one in this case? http://www.cra-arc.gc.ca/nwsrm/rlss/200 ... c-eng.html

Section 8 of the Charter guarantees rights against unreasonable searches and seizures, and it's up to a judge to decide what's reasonable or not.
Deal Addict
User avatar
Aug 30, 2007
2432 posts
40 upvotes
cahk wrote:
Jul 9th, 2010 9:28 pm
CRA investigators can, with a court warrant, enter your house, search and seize everything they consider related to the investigation.

Did we mention you get to have a 'shame page' on the CRA site if you are convicted? http://www.cra-arc.gc.ca/gncy/lrt/crmnl-eng.html
guessaaa wrote:
Jul 9th, 2010 10:31 pm
If they didn't need a warrant, then why would they have got one in this case? http://www.cra-arc.gc.ca/nwsrm/rlss/200 ... c-eng.html

Section 8 of the Charter guarantees rights against unreasonable searches and seizures, and it's up to a judge to decide what's reasonable or not.
*ahem*
Newbie
Feb 19, 2010
7 posts
Toronto
Apparently your employer thinks your an idiot. For that reason alone I would report him.

Don't prove him right by "taking half", the guy has already tried to screw you?

Either have him pay you in full for what you are owed, or talk to the CRA, and let them guide you through your options. Your very last option would be a lawyer if CRA does not seem very willing to help you.
[OP]
Sr. Member
User avatar
Feb 17, 2007
880 posts
76 upvotes
Toronto
dslrnewb wrote:
Jul 9th, 2010 7:42 pm
If you go to an employment lawyer he will get that 20K for you and will be retroactive.
If he dares to lay you off you will still have opportunity to sue for lost compensation.
He has no option but litigate. Also if you don't do it and once this becomes public by someone else you are liable party as well. I say wherever you see an illegal action in your employment relationship you should just get out of there.
Excellent advice.

GSRee wrote:
Jul 9th, 2010 7:43 pm
How do you know what your gross pay was if you didn't receive paystubs? Or did the payroll provider issue stubs?
I track my finances well enough to know I didn't earn an extra 20k this year.
Deal Addict
User avatar
Nov 7, 2005
2725 posts
36 upvotes
Toronto
Start printing stuff out.
Report your employer, don't accept anything other than properly reporting your income to the CRA.
You really don't need a fraud conviction (or even accomplice to fraud) on your record.
That will definitely f- you from any potential jobs in the future.

Then of course, amend your tax return.
Deal Addict
Feb 28, 2006
3296 posts
41 upvotes
Toronto
i guess its a cheaper crime to kill than evade tax. the law seems messed up.
cahk wrote:
Jul 9th, 2010 5:34 am
You do realize the "play along" part is fraud right? You become a party to the criminal offense even if you passively joined in. In addition, you are falsifying documents for the purposes of carrying out fraud - maximum 19 years in jail, still think you should go along with his plan?



You do realize you are counseling someone to commit a Criminal Code (and most likely the Income Tax Act) offense right?
Deal Addict
Aug 24, 2002
3569 posts
19 upvotes
Sask
ricsad wrote:
Jul 8th, 2010 4:05 pm
For my 2009 taxes, my employer was claiming slightly higher taxes on his employees and paying them rather erratically, with random bonuses to cover any discrepancies. I didn't think much of it as he assured me it was legit and that by the end of the year the numbers would even out.

The above scenario has caused me to end up in the highest tax bracket, with not enough actual income to cover the costs associated with the highest tax bracket that I'm slowly learning about.

I have stopped receiving GST credit, and have just found out that I'm not eligible for any student loans/bursaries for this fall when I plan on going back to school full time.

Is there anything I can do to fix this, or would I just end up in more trouble than I'm already in if this were to get reported to the government?
Either your employer is doing something really messed up, or you are misunderstanding.

This talk about being pushed into a higher tax bracket makes it seem as if you could be misunderstanding at least part of this.

This talk about asking your employer to give you half or bribe you could land you with a conviction.

But I'd also be cautious about accusing them of something highly illegal before you have a better understanding.

Is there anyone you trust that you can go to, in accounting or payroll maybe? They might be able to explain it properly.

You need to very quickly verify your actual income to the penny and compare it with what you signed and filed in your tax return. If there's any discrepancy at all you need to contact CRA before they contact you. Contact your province also to see what kind of labour help and advice they can give you. Don't name the employer until you are absolutely sure they did something wrong.
Deal Addict
Apr 5, 2007
1105 posts
133 upvotes
Canada
Sprite_TM wrote:
Jul 11th, 2010 9:42 am
i guess its a cheaper crime to kill than evade tax. the law seems messed up.
Incorrect. Murder conviction will automatically be a life sentence whereas the 19 years maximum term for fraud + falsifying document are just "maximum", very unlikely a judge will be that harsh against first-timer.

Tax evasion is a serious crime - and courts around the world recognize that fact.
Deal Fanatic
May 29, 2006
7155 posts
671 upvotes
cahk wrote:
Jul 11th, 2010 4:38 pm
Incorrect. Murder conviction will automatically be a life sentence whereas the 19 years maximum term for fraud + falsifying document are just "maximum", very unlikely a judge will be that harsh against first-timer.

Tax evasion is a serious crime - and courts around the world recognize that fact.
Thats for murder, alot of murder charges get downgraded to manslaughter, you serve 5 years, and your out.
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