The Canadian taxman chose to publicise the operations, which involved about 30 CRA investigators, in an effort to discourage taxpayers who think that tax protester theories are legitimate.
“The CRA is always on the lookout for illegal tax schemes and those who promote them. The CRA works closely with law enforcement agencies on tax cases to maintain the integrity of the tax system,” the agency said.
Natural vs legal person
According to the agency, one of the most common and false arguments tax protesters use is the concept of a natural versus a legal person.
Using the pretence that the taxpayers is, in fact, two separate people for income tax purposes, the natural person is defined as the individual who earns the income, while the legal person is the legal entity created by the federal government when it issues and uses their social insurance number.
Tax protesters allege that the legal person has to file a tax return but that the income received belongs to the natural person and is therefore not subject to Canadian income tax.
Jail and fines
The CRA warned that participating in these schemes can have serious consequences, after it convicted 35 taxpayers who participated in the tax protester movement between January 2007 and March 2014.
In addition to paying taxes owed, the 35 taxpayers were collectively sentenced to 325 months in jail and fined a total of C$5.4m (£3.25m, $4m, €3.7m).
Four of the people jailed and fined were promoters of the schemes. They were jailed for 188 months and fined C$1.28m.
