A resident of Stoney Creek, Colin Fox, pleaded guilty in the Ontario Court of Justice in Hamilton, on October 22, 2010 for failing to comply with a court order to file his 2004 income tax return. Since this was the third time Mr. Fox was convicted of this offence he was sentenced to four months imprisonment and a fine of $2,000.
If Mr. Fox applied under tax amnesty program and filed his tax return before CRA commenced an investigation then he would not have been prosecuted and penalized. He would only have to pay interest and taxes.
Mark Feldstein Personal Taxes, Tax Convictions failure to file, Hamilton, Tax Amnesty
Mario Pietrangeli of Napanee received a guilty verdict for federal income tax and GST evasion in the Ontario Court of Justice in Napanee. His sentence consisted of fines totaling $149,000 which had to be paid within two years, two years probation, and a 12-month conditional sentence which included four months of house arrest as well as good behavior and keeping the peace, comply with the Income Tax Act. If Pietrangeli had voluntarily disclosed the missing sales before Canada Revenue Agency started its investigation, he could have avoided fines and house arrest.
Pietrangeli sold scrap metal and salvaged parts from scrap automobiles as well as purchased the same at his place of business, Napanee Scrap Metal and Auto Parts. In January 2009, Canada Revenue Agency began an investigation. It was shown that Pietrangeli concealed revenue by withholding relevant books and records from his tax preparer. His bookkeeper was mislead by Pietrangeli into believing he sold to company for the years 2004 – 2006.
The Canada Revenue Agency also found false business expenses were being claimed, and some income was actually claimed as expenses.
Pietrangeli tried to avoid paying $80,455 in federal taxes during 2004 – 2005 by not reporting sales totaling $671,394. He also did not remit $118,838 in GST for the years 2004 – 2006.
Mark Feldstein Tax Convictions GST, Napanee, Tax Evasion, Voluntary Disclosure
Faiz Khan of Markham was convicted of one count of fraud over $5,000 in the Ontario Court of Justice in Toronto on November 26, 2010. Faiz received a conditional sentence of 2 years less a day. Khan will be under house arrest for a year and a half with 6 months under curfew. He will be on probation for the next two years. He has to pay $824,971, and was banned from gambling and preparing tax returns. If Khan had voluntarily disclosed the tax scheme to Canada Revenue Agency before they started any investigation, he could have avoided penalties, prosecution, and the loss of his livelihood.
During an investigation by Canada Revenue Agency, it was revealed that Faiz prepared false tax returns and false donation claims. During the years 2004 – 2008, he falsified documents on behalf of his 52 clients which understated their federal taxes by $575,971, thereby increasing their tax refunds.
The names of four charities on the falsified donation slips were City Chapel Ministries International, Destiny Ministries International Christian Mission, Pan African Canadian Multicultural Centre and Ave Development Foundation. They had their charity status revoked by CRA. Read more…
Mark Feldstein Personal Taxes, Tax Convictions charitable donations, Markham, Tax Evasion, Voluntary Disclosure
Anna McArthur pleaded guilty to four counts of failing to comply with a judge’s orders to file corporate income tax returns in the Ontario Court of Justice in North Bay. During the years 2002 to 2005, McArthur as director, officer or agent did not file corporate income tax returns for 1135650 Ontario Inc. She received a total fine of $8,000. Besides paying fines and penalties, income tax returns must still be filed and income tax payables must still be paid after conviction. This could have been avoided if McArthur filed her returns under the Canada Revenue Agency’s Voluntary Disclosure Program (VDP) before the government started investigating or contacting her.
Mark Feldstein Corporate Taxes, Tax Convictions failure to file, North Bay, Voluntary Disclosure
During his court appearance in the Ontario Court of Justice in Lindsay James Bradford Medd attempted to use the argument, still actively promoted by some individuals and groups, that it is possible to lawfully declare oneself exempt from tax. Despite Medd’s statement that the Court had “no jurisdiction or authority” over him as “a human being” he was found guilty of four counts each of Income Tax and Goods and Services Tax (GST evasion) on September 21, 2010. The $43,830 fine imposed by the Court represents 100% of the taxes evaded by Medd and is in addition to the taxes and interest owing and all penalties determined by the Canada Revenue Agency (CRA).
The charges related to the 2003 through 2006 taxation years. Medd has income from several sources including bookkeeping, accounting, tax preparation and consulting work, the sale of puppies and farm income. After a routine audit the CRA instigated an investigation which included a search of Medd’s residence, as authorized by a search warrant. It became evident from Medd’s bank and business records that Medd had failed to report personal income of $208,288 during the years in question. He also failed to file GST returns for the same period of time, thereby evading $14,250 in GST.
Mark Feldstein Corporate Taxes, Personal Taxes, Tax Convictions GST, Tax Evasion
A fine of $62,033 was imposed when Douglas Braund pleaded guilty to one count of Goods and Services Tax (GST) evasion in the Ontario Court of Justice in Kingston on December 21, 2010. The fine represents 100% of the federal tax that Braund attempted to avoid paying. The hefty fine is an additional expense, as Braund is still required to pay the taxes and interest owing as well as penalties as determined by the Canada Revenue Agency (CRA).
As President and General Manager of Douglas Braund Investments (Kingston) Limited, Mr. Braund kept the books and records for the Company, which operates the bus terminal on John Counter Boulevard in Kingston, Ontario. The GST returns filed were, in part, based on the records that Braund maintained. When the CRA conducted an audit it became evident ath false Input Tax Credits were being claimed and that the GST claimed on returns was being considerably less than was warranted. Based on these findings, the auditor transferred the file to the Enforcement Division for further action.
In a subsequent CRA investigation it became apparent that by creating fictitious entries in the Company books Braund was falsifying the Input Tax Credit Claims. The
Mark Feldstein Corporate Taxes GST, Kingston, Tax Evasion
Robert Morrison of Holland Centre faced three counts of tax evasion in the Ontario Court of Justice in Owen Sound on December 20, 2010. Following Mr. Morrison’s guilty plea the Court levied a fine of $47,344, to be paid in the next five years. The fine is supplementary to the taxes and interest owing, as well as the penalties determined by the Canada Revenue Agency (CRA).
Morrison, a masonry contractor operating in the Owen Sound area, had substantial income which he failed to report during the 2003 and 2004 taxation years. This fact was discovered during an audit by the CRA’s Underground Economy Section. As a result of this finding, the file was referred to the CRA’s Enforcement Division, who subsequently expanded the investigation to encompass the 2005, 2006 and 2007 taxation years. Total federal income tax evaded was $61,173 and the total GST evaded totaled $33,514 during the period of 2003 to 2007.
Upon conviction of tax evasion all taxes, interest and CRA penalties must be paid. Where gross negligence has occurred the CRA has the authority to assess a maximum penalty of 50% of the unpaid
Mark Feldstein Corporate Taxes, Tax Convictions Holland Centre, Owen Sound, Tax Evasion, Underground Economy Section
Diverting income to a U.S. corporation in an attempt to avoid paying Canadian income tax is not an option. Sylvie Clement, a self-employed human resources consultant, attempted to divert a portion of her income to a company located in the United States and owned solely by her. The end result was that she was charged with, and found guilty of, one count of tax evasion on December 21, 2010 in the Ontario Court of Justice in Ottawa. The Court imposed a fine of $20,000, which represents 50% of the total income evaded.
An investigation by the Canada Revenue Agency (CRA) revealed that while all of Ms. Clement’s work was performed for the same client, some of the invoices issued were in the name of a U.S. corporation owned solely by Clement. The client was asked to wire payments for these invoices to the bank account for the U.S. corporation. Only the income paid for in Canada was declared on Clement’s personal tax returns. The income diverted to the U.S. bank account was used to pay for personal expenditures. The total annual personal expenditures exceeded the income reported on personal tax returns. During the
Mark Feldstein Corporate Taxes, Personal Taxes, Tax Convictions Ottawa, Tax Evasion
Sooner or later you have to file your tax returns. Mark Martens of Sarnia, Ontario discovered this to be true when he defied a Court order to file his tax returns. The sole Director of 542514 Ontario Inc., operating as Sarnia Pool Company, Martens had pleaded guilty to failing to file personal and corporate income tax returns for 2004, 2005 and 2006 on November 17, 2008. The Court ordered him to file the outstanding returns by April 16, 2009.
When he did not meet the deadline given by the Court he was charged with six counts of failing to comply with a Court order and as a result he appeared in the Ontario Court of Justice in Sarnia again on October 7, 2010. At that time the Court imposed a fine of $1,000 per count, for a total fine of $6,000. In addition to the fine, Mr. Martens will have to pay all taxes, interest and penalties assessed by the Canada Revenue Agency (CRA) and will still have to file all delinquent returns.
The CRA has a Program whereby outstanding tax returns can be filed and previously unreported income can be disclosed. It is possible to avoid penalties and prosecution by entering into the Program. The Voluntary Disclosure Program is available to all taxpayers who have not been contacted by the CRA regarding unfiled tax returns and/or unreported income. However, as soon as the CRA begins an action or investigation into the taxpayer’s affairs, the Program is no longer open to the taxpayer.
Mark Feldstein Corporate Taxes, Personal Taxes Sarnia