William Ankomah of Brampton pleaded guilty to one count of fraud over $5,000 on October 16, 2009. He was sentenced to two years less a day house arrest to be served conditionally, and was fined $50,000.
CRA and the RCMP investigation revealed that Mr. Ankomah the operator of Tax Help Centre prepared false personal income tax returns on behalf of 23 of his clients. Mr. Ankomah charged a fee and overstated charitable donation receipts from various charities on his clients’ income tax returns. During the 2003 to 2006 tax years, Ankomah issued $331,716 in fraudulent charitable donation receipts, and in doing so, helped his clients claim over $134,124 in non-refundable tax credits.
Taxpayers that claim false receipts are subject to serious consequences. Taxpayers should understand that the charity has to be registered with CRA and that the donation receipt should equal the funds that were paid to the charity. For example, if you gave $500.00 to a charity and the charity gave you a receipt for $5,000, then you are participating in a fraud in order to obtain non-refundable tax credits. The taxpayer should have known that they are participating in a fraud. The taxpayer will owe the taxes due plus penalties and interest. In addition, if convicted, the court may fine an additional 200% of the tax evaded and sentence them up to a five year jail term. If the taxpayer applies under the voluntary disclosure program before CRA commences and investigation, then penalties and prosecution will be waived.
Mark Feldstein Personal Taxes charitable donations, fraud
Anthony Ho Shue of Markham Ontario pleaded guilty in the Ontario Court of Justice in Newmarket on September 22, 2009 on one charge of failing to keep proper books and records as required by the Income Tax Act. He was fined $16,000 and paid the amount immediately.
The Income tax Act requires that business owners keep proper books and records in order for CRA to properly calculate the taxes payable. CRA takes sloppy bookkeeping really serious. When an auditor reviews the books and records of a Company it is imperative that the books be in proper order.
If the books are a mess, the auditor will have no choice but to expand his work and look much further into the business. Inevitably, this causes a much higher reassessment. If the books are a complete disaster and the auditor cannot rely upon them, then CRA will do a net worth assessment based on the lifestyle of the tax payer.
The auditor will review personal bank accounts, credit card, mortgage payment etc. What the auditor cannot find in personal expenses, they will use statistics Canada numbers to estimate what certain items costs. For example, if CRA performs a net worth audit and cannot determine what a family consumes in groceries for a year, they will then use statistics Canada numbers to estimate what a family of a particular size consumes in food for a year. The onus will be on the taxpayer to prove CRA wrong.
Mark Feldstein Corporate Taxes
Julia Blanchard of St. Catharines was sentenced on September 16, 2009 on five counts of failing to file corporate income tax returns and one count of failing to file GST returns. She was fined $1,500 for each count for a total fine of $9,000. Julia Blanchard pleaded guilty to these charges on March 17, 2009.
CRA made several request for the missing tax returns before serving notice demanding that the returns be filed. Failure to comply with the requests resulted in charges being laid. All of the outstanding returns have now been filed. CRA takes delinquent filers very serious. It is always advisable to file all tax returns on time and stay off CRA’s radar.
Mark Feldstein Corporate Taxes, Tax Convictions CRA, criminal charges, Tax Evasion, Unclaimed Income
Walter Pontiero General Contracting Ltd of King City, pleaded guilty on September 17, 2009 of GST evasion. There was a fine levied in the amount of $91,063 in the Ontario Court of Justice in Newmarket. The fine was 100 percent of the taxes evaded.
CRA’s investigation revealed that the company which is a subcontractor to homebuilders, filed GST returns for the periods July 31, 2002 to April 30, 2005, in which the total sales of the business were under reported by over $2.75 million dollars. Therefore, the company understated the GST it collected on sales by $198,238 and it understated its input tax credits by $107,174, resulting in $91,064 GST evaded.
Individuals or companies that have not filed their returns or have not reported all of their income, can apply under the voluntary disclosure program. CRA will not penalize or prosecute them if they make a full disclosure before CRA commences an action. If Mr. Walter Pontiero General Contracting Ltd applied under the VDP program there would be no penalties or prosecution but the taxes would have to be paid along with interest.
Mark Feldstein Corporate Taxes, Tax Convictions criminal charges, Tax Evasion, Unclaimed Income
Nester Raymond Pinga of Newmarket Ontario pleaded guilty in the Ontario Court of Justice on 14 charges of failing to file tax returns. He was fined $14,000. When individuals or corporations are convicted of failing to file returns, they still have to file the returns and pay the full of amount of taxes outstanding plus interest and any civil penalties that may be assessed by the Canada Revenue Agency. If Nester Raymond Pinga contacted CRA before CRA commenced an action under the voluntary disclosure program, there would be no penalties or prosecution only interest and taxes would be due.
Mark Feldstein Tax Convictions criminal charges, Tax Evasion, Unclaimed Income