Roger Miller of St. Jacobs pleaded guilty in the Ontario Court of Justice in Kitchener on nine charges of failing to file tax returns. He was fined $9,000. When individuals are convicted of failing to file tax returns they are still obligated to file the returns and pay the amount of taxes owing, plus interest as well as any civil penalties that may be assessed by CRA. Mr. Miller operated a T-shirt business and was fined for not filing his 2003 to 2006 personal tax returns as well as five GST returns.
Individuals who have not filed returns for previous years or who have not reported all of their income can apply under the voluntary disclosure program and bring their tax affairs up to date. They will not be penalized or prosecuted if they make a complete and full disclosure before CRA starts an investigation. Taxes and interest will still have to be paid.
Mark Feldstein Corporate Taxes, Tax Convictions Unclaimed Income
Joseph Berardi of Lakefield Ontario pled guilty in the Ontario Court of Justice in Peterborough on one count of income tax evasion. Mr. Berardi was fined $173,907 which represents 100% of the taxes due. The fine is in addition to any taxes and interest owed, as well as any civil penalties that may be assessed by CRA.
CRA’s investigation revealed that Mr. Berardi neglected to disclose the rental income that his company earned and that he appropriated the funds in the 2001 to 2003 tax years. The total unreported income amounted to $642,221 over the three years and thus attempted to avoid paying $173,907 in taxes.
In cases of gross negligence, CRA can assess a penalty of 50% of the unpaid tax. In addition, the court may on summary conviction charge a fine in the amount of 50% to 200% of the tax evaded and impose a jail sentence of up to two years. Consequently, the total penalties on tax evasion can reach up to 250%.
If Mr. Berardi applied under the voluntary disclosure program before CRA began their investigation, then he would have had to pay the taxes and interest and would avoid prosecution and penalties.
Mark Feldstein Corporate Taxes, Tax Convictions Tax Evasion, Unclaimed Income
Panagiotis Tourikis of Toronto pled guilty on August 31, 2009 on three counts of failing to remit GST. There was a $72,000 fine from the Ontario Court of Justice in Toronto. The fine is in addition to taxes and interest due.
CRA investigated Mr. Tourikis and discovered that he failed to remit $140,616 in GST that was charged and collected during the years 2002 to 2004. The GST was charged and collected on worm sales made to several wholesalers in Ontario.
If Mr. Tourikis applied under the voluntary disclosure program before CRA began their investigation, there would be no penalties or prosecution. There would only be interest and taxes due.
If an individual or a corporation is convicted of tax evasion, they have to pay the full amount of tax owing, plus interest, and any penalties that is assessed by CRA. If there is a gross negligence penalty, the Income Tax Act and Excise Tax Act allow CRA to assess an additional 50% penalty of the unpaid tax. In addition, the court on summary conviction could fine them 50% to 200% of the tax evaded and sentence them to jail for up to two years.
Mark Feldstein Corporate Taxes, GST Tax Evasion