Situation: A business man passed away before doing their taxes and it’s impossible to know what their income was. No records, no statements. No executor of the wil. Widow is now trying to submit their own taxes but upon answering the question of whether their spouse had income with a ‘Yes’ but without providing their total income - creates an error in EFILE and will not let me transmit. The CRA said that I can do this but EFILE won’t let me submit when there is an outstanding error. Can I by pass this error?
Not letting you transmit is a bit different than an EFile error.
You likely just need to sign off on the alert and then try again.
It’s unfortunated, but you know there is income, just don’t know details, whatever you do is going to be wrong. By doing this return, you are putting yourself at great risk
What is tax evasion and tax fraud:
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falsifying records and claims
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purposely not reporting income
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inflating expenses
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claiming a fraudulent refund or benefit
Tax evasion is an offence under section 239 of the Income Tax Act and section 327 of the Excise Tax Act.
When filing your clients return I would ensure you are not taking deductions or transferring credits you are not entitled to.
There is no fraud here unless a deduction or transfer is made to the surviving spouse. What I generally do when the spouse’s income is unknown (as sometimes is the case) is to “plug” the spouse’s income at a level that is non-permissive to any transfer, credit, deduction or allowance. Typically that’s around $50K (Gernerally easily verified by separating the returns and/or buildiing a “single” return for the survicvor and ignoring the GSTC credits and similar items. Mostly it’s a problem only with Pensions/OAS clawbacks etc.)
When the deceased’s income is determined, if it’s low enough to allow credits, file an amended return.