Hay River (Apr 07/03) - For Northerners, just like all Canadians, there are consequences for not filing a required income tax return.

And there is very little chance the government will not notice if you don't.

That's despite a recent Supreme Court case involving the Canada Customs and Revenue Agency. A taxpayer successfully objected to paying overdue taxes because the CCRA had not attempted to collect for six years.

"I can't think of too many cases where we would not initiate action in six years," says Ron Quinn, the CCRA's communications manager for the NWT and northern Alberta.

A delinquent taxpayer might get lucky for a year, Quinn says. "But eventually we do catch up with most people who don't file."

The only time you're not legally required to file is if you expect a refund, he explains.

In 1999, NWT residents filed 26,520 returns on $988 million of income. In all, they paid nearly $175 million in income tax.

If a person doesn't file, the CCRA will match up information slips to determine whether a return might be required. If so, it will send a letter to the taxpayer asking for a filing.

Letters will go to just about every non-filer by September or October.

If that is not successful, the CCRA can file a so-called arbitrary return for the taxpayer, Quinn explains. "We don't calculate deductions, except the basic personal deduction."

However, such a filing is rarely used.

More likely, the CCRA will contact the tardy taxpayer with a personally served letter demanding a filing.

"If it is still not filed, we'll lay a charge of failure to file under the Income Tax Act," says Quinn.

That is not a criminal charge. However, if convicted under the Income Tax Act, a person would be ordered to pay the tax within 30 or 60 days, and would also be fined based on income.

Even if a taxpayer doesn't have the money to pay taxes owing, Quinn says, it is still best to file a return by the April 30 deadline. Then, interest would be charged on the amount owing, but no penalties would be imposed.

Quinn says the government will accept postdated cheques for payment, as long as it is for a reasonable timeframe. It would not, for example, accept dozens of cheques each paying only a small amount per month over an extended period of time.

Even if a person has not filed for a number of years, penalties can still be avoided by voluntary disclosure. However, the interest charges would remain.

Quinn says if a person can't do a tax return, he or she should go to a reputable accountant.

He says some people take their advice from what he calls bar room and coffee shop accountants. "That causes nothing but grief."

Hetty Hunter, the office manager with H&R Block in Hay River, also advises everybody to file an income tax return.

Having an accurate return is important, she says, noting people might be paying more taxes than necessary.

She says there are several reason people don't do their own returns. "For some individuals, it's time. They're busy."

For others, there may be a bit of intimidation in dealing with the tax forms, she notes. "It's not always the easiest to follow."

Hunter finds most people have a positive attitude when it comes to income taxes. "They know it's part of life. It's something they have to do."

Anyone who has to pay extra tax just wants to know why, she says. "They want someone to explain it in plain terms."

However, Hunter has heard some unusual comments from taxpayers.

Some people look at their T4 slips and want back all the tax they paid over the year, she says. "That's kind of the ones newer to filing."

Hunter notes that filing an inaccurate return can cause major problems.

"That's how they got Al Capone."

Where do you rank?

For the 2001 tax year, the number of income tax returns from the NWT per total income range were as follows:

$0 100

$1-$19,999 10,070

$20,000-$29,999 3,080

$30,000-$39,999 2,670

$40,000-$49,999 2,310

$50,000-$59,999 2,120

$60,000-$69,999 1,860

$70,000-$79,999 1,610

$80,000-$89,999 1,050

$90,000-$99,999 610

$100,000-$124,999 650

$125,000-$149,999 230

$150,000-$249,999 190

Over $250,000 70

Total returns: 26,590