According to case law, a sham is generally a transaction conducted with an element of deceit so as to create an illusion calculated to lead the tax authority away from the taxpayer or the true nature of the transaction; or, simple deception whereby the taxpayer creates a facade of reality quite different from the disguised reality.

Without limiting the generality of the concept of a sham, the program covers sham transactions in the context of contractual relationships where there exists a simulation within the meaning of article 1451 of the Civil Code of Québec, i.e., where the parties agree to express their true intent, not in an apparent contract, but in a secret contract, in order to deceive tax authorities. The element of deceit covered by the program consists in parties creating the appearance of contractual rights and obligations that they know do not exist or are different from what is being presented, with the goal of deceiving tax authorities. The program does not cover the unilateral submission of facts that prove to be false.


Submissions must be reliable, detailed and credible enough for Revenu Québec to investigate the claims in them. The information must not be known by Revenu Québec or speculative.


  • Example 1: “I have detailed, credible information showing that a taxpayer's contractual situation is different from what they are presenting to Revenu Québec.”

    Comment: Because the taxpayer is seeking to deceive us by concealing a taxpayer's identity or a transaction's true nature, this type of situation is generally considered a sham. For example, the following elements could be falsified: the identity of a person holding assets or operating a business, the existence of an entity, or the occurrence or date of an event.

    In this case, the informant can file form LM-8-V, after which we will determine whether the submission is eligible for the program.
  • Example 2: “I have detailed, credible information showing that a taxpayer hides facts or income (from undeclared work, etc.) from Revenu Québec.

    Comment: This information is ineligible for the program because it concerns an omission and not a sham. Unlike example 1, there is no element of deceit. It can, however, be reported under the general framework for reporting non-compliance.

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