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More CRA Tax Evasion Convictions

My last post on Tax Evasion, fraud and failing to file convictions [1] was rather popular with visitors to Canadian Tax Resource [2]. The CRA has continued to release the details of it’s 2009 convictions.

Here are the next round of CRA convictions:


Tax Evasion

Kelowna area drywaller fined $15,000 for tax evasion. The taxpayer filed income tax returns that did not disclose all business income.  The discovered the income in an audit and found that some of that unreported income was used to support personal expenses that included vacations, furniture, exercise equipment and a hot tub. In all, the investigation showed that the taxpayer failed to report net income of $128,779.

Vancouver businessman sentenced 2 years and fined $157,190 for tax evasion. The taxpayer used a complex scheme involving foreign corporations in an attempt to evade Canadian income tax. The fine represents 75 percent of the income tax evaded.

Newfoundland business owner convicted and fined $46,911 for tax evasion. The taxpayer was convicted of making false statements and inflating input tax credits for the HST, as well as overstating business expenses. The Court’s fine represents 100% of the tax the taxpayer tried to evade.

Quebec businessman fined $28,143 for tax evasion. The fine represents 100% of the tax evaded and is payable in addition to the tax owed. The scheme involved a factoring business used to avoid accounting certain revenues.

Tax Fraud

Fraudulently obtaining Government of Canada cheques totalling $226,735 leads to house arrest. The accused was employed by the CRA. The accused inappropriately accessed and used information in the CRA’s computer systems pertaining to 34 individuals.

Quebec Company & it’s administrator found guilty of tax evasion. The company willingly failed to report income and claimed false expenses from 1997 through 2007 and was fined $28,000. The administrator failed to report dividend income for those same years.

Tax Preparers

New Brunswick resident pleads guilty to tax evasion. This is the second conviction for this taxpayer. The taxpayer prepared fictitious T4 information slips that were used by another tax preparer to file fraudulent 2006 income tax returns. That tax preparer and another individual are also facing related tax evasion charges. The prior conviction resulted in a fine of $32,093 and sentenced to 16 months of house arrest. Sentencing for this conviction is scheduled for January 13, 2010.

NB tax preparer fined $275,186 and sentenced to house arrest on tax fraud charges. The taxpayer had pleaded guilty to 86 charges of tax evasion under the Income Tax Act and 46 charges under the Tax Rebate Discounting Act for claiming or obtaining $252,196 in false income tax refunds. He originally faced 258 counts; 162 under the Income Tax Act and 96 under the Tax Rebate Discounting Act.

Proceeds of Crime

Executor fined $61,460 for tax fraud relating to mother’s estate. A New Brunswick executor was found to have appropriated $199,000 from the estate for his own personal use. He failed to report this amount on his income tax return for that year and like legitimate income, the proceeds of crime are taxable!

Failing To File A Tax Return

Fernie, B.C. resident fined $4,000 for not filing tax returns.

Director and corporation fined $6,000 for not filing tax returns. The individuals and  corporations convicted, are still obligated to file the tax returns and pay the full amount of taxes owing, plus interest, as well as any civil penalties that may be assessed by the Canada Revenue Agency (CRA).

Ontario set designer gets house arrest and $8,000 fine for failing to file tax returns. The case involved not filing 2005 to 2007 personal income tax returns and GST returns.

Ontario resident fined $3,000 for failing to file. The taxpayer was a self-employed carpenter and failed to file 2005 through 2007 personal tax returns.

Goods And Services Tax (GST) Evasion

Winnipeg businessman fined $63,200 for income tax and GST evasion. The fines represent 75% of the income tax and 50% of the GST evaded. The taxpayer failed to report more than $196,000 of business income and $19,600 of GST.