Unreported Income on Tax Returns
Another defense ICBC will use concerns unreported income on tax returns. It arises when a claimant says he lost income from a job due to injury, but because the claimant never declared his income, there is doubt about whether he worked or the amount he earned before the injury. If a claimant has failed to declare income, either before or after the injury claim begins, ICBC will use this evidence to:
- Attack the claimant’s credibility; and/or,
- Deny compensation for income loss based on the undeclared income.
There is little you can do can do about tax returns previously filed in which you failed to report income. However, failing to report income after your injury claim has commenced will have a very negative impact on your claim, and must be avoided.
Failure to Report
If you fail to report income on past tax returns, ICBC will argue this is evidence that you are willing to cheat the system for your own benefit, which may harm your credibility, both with your income loss claim and your claim generally.
In law, you cannot be “punished” in your ICBC claim for failure to declare income. However, if you don’t report income on your tax return, it will raise a strong inference that it was never earned, which may be difficult to rebut. In some cases, such as with taxi drivers or waiters who don’t declare tips, it may be easier to prove that the tips were earned even though not reported. In other cases, where claimants have a history of undeclared cash work and then try to claim against ICBC that they lost income from this work, it may be more difficult.
If you failed to report income on your tax returns and are concerned about how it may impact your ICBC claim, give us a call. We know the law and have experience dealing with these issues.
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