Is this considered Tax Fraud?

[FirstTimer]

So back in April of this year, we had done financial disclosure and she declared for 2015 she was making roughly 60K. She did not submit her income tax yet as it was in April so she provided commission invoices from her job and dated in 2015 that totaled to that amount. She was trying to prove that she was financially stable to take care of child as she has an unstable work history.

Fast forward to now, and she has been court ordered to pay child support based upon the above amount and is under MEP.

A few weeks ago she sent me her 2015 FILED income tax return and she declared roughly 10K for her job and therefore she will only pay the FILED amount along with how pathetic I am of a human being.

She will try and bring this into court. So my question is, is this possible that you can somehow legally declare your job income as 10K even though your commission cheques YOU provided to court show an income of 60 K and all DATED in 2015.

Is this tax fraud or she is somehow doing something legal?

[paris]

She didn't show the commissions and then show deductions/expenses for those commissions?

[FirstTimer]

She didn't show the commissions and then show deductions/expenses for those commissions?

Nope on the commissions line she put in 5000


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[paris]

Just wow. I don't know what to say lol.

[Desperate_Dad]

She obviously wrote off 50,000 in expenses against that 60,000 in income. That is the only logical conclusion based on the information you have provided.

[paris]

Desperate_Dad, he explained it as if she claimed $5,000 in income and zero expenses. I can't remember if the deductions show up in the NOA, but he said she supplied him with her actual tax return.

[Janus]

This is actually a good thing for you.

Somebody who makes $60,000 and pays regular taxes pays regular support. However, somebody who makes $60,000 but pays no tax (or less than appropriate tax) gets their salary "grossed up", and support levels increase.

You can do a Canlii search for it if you want, it happens on a surprisingly regular basis.

[Desperate_Dad]

FirstTimer has not given enough information to make an accurate assessment.
She could have an unincorporated business and have 50,000 in expenses so she nets out 10,000 on Line 139. In that case, her true income is 10,000. But it's also possible she has a corporation and commission income flows into corporation. She writes of expenses and then takes either a 10,000 salary or a 10,000 dividend. It's impossible to assess what is happening without more information.

[FirstTimer]

Okay thanks, to be specific.
Employment Income - line 101 - 10K
Commissions in line 101 - 5K (her 2015 dated commission cheques totaled about 60K)

So in that sense, for Desperate Dad's scenario to work, she would have to declare on 60K on line 101 then deduct whatever expenses etc that she can legally claim. I suspect fraud but wasn't 100% sure hence the question.

[Desperate_Dad]

Ok its still not making sense. If the 10K is on line 101, she is either a corporate owner or an employee. Then you say commissions of 5,000 on line 101 as well? Commissions as an employee are on Line 102 and commissions as self employed are on Line 139. The commission invoices you mentioned on your orginal post imply self employment Can you elaborate further?

[FirstTimer]

Sorry line 102 - she puts 5K. Line 102 says (Commissions included in line 101)
There is nothing on line 139 for her.

She works in new home sales, she works from a showhome. I don't anything about setting up an unincorporated business so you're saying she's reporting the commissions on that separately.

[Desperate_Dad]

Now we're getting somewhere. The 10,000 is as an employee of which 5,000 of that 10,000 is commission income. She may write off expenses on Line 229 employment expenses. As for the 60,000 in commission statements, does it say who they are paid too? If it is a corporation, then she has corporate income as well. Sounds like she is self employed and an employee.

[FirstTimer]

The commission statements are to her name, not a corporation. So you're saying then nothing fishy is going on? That she legally did it right and even though she said she makes 60K, her actual income should be calculated at 10K after expenses.

[Desperate_Dad]

Are you sure the 60,000 isn't the value of the product she sold? And maybe she gets like a 10% commission on that product sold plus a base of 5,000?

Right now it's sounding like she only makes 10K per year.

[FirstTimer]

First, thanks for taking the time to answer this stuff.

She sells new homes, so typically the houses aka product are around the 450 to 600K range and she gets commission of those, so the invoices range from 5K to 8K off each house she sells.

I guess what is dubious is why state in court back in April that you made 60K in 2015...versus saying my salary is 10K right from the start. See where I am going with this.

Are you sure the 60,000 isn't the value of the product she sold? And maybe she gets like a 10% commission on that product sold plus a base of 5,000?

Right now it's sounding like she only makes 10K per year.