Should you report a tax-cheating pal? - MoneySense

Should you report a tax-cheating pal?

When to report someone to the Canada Revenue Agency.


Q: My best friend of 30 years is cheating on her taxes—not claiming upwards of $30,000 in income. Should I report her to the Canada Revenue Agency?

–J.R., Calgary

A: Before you reach for a toll-free government number, speak to your friend directly, says Chris MacDonald, an ethics professor at Ryerson University in Toronto. “If you don’t confront your friend, it’s likely no one will.” The dilemma you’re facing is about trust—trust between you and your friend and trust that each person contributes fairly to society. So, play to the character traits that are important to your friend. For instance, you could frame your concerns as a matter of fairness, honesty, or duty, MacDonald says. And be prepared to combat rationalizations like the belief that her actions aren’t hurting anyone. “They’re hurting other taxpayers,” says MacDonald. If that doesn’t work, then you may want to consider calling the CRA.

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