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
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
Stylianos Timkoglous of Stoney Creek pleaded guilty on June 3, 2009 on three counts of failing to file corporate income tax returns for the years 2004 to 2006. Timykoglous was fined $3,000 for failing to file the corporation tax returns. Colin Michael Fox also of Stoney Creek pleaded guilty on July 3, 2009 for failing to file his 2004 to 2006 personal income tax returns. Mr. Fox was fined $4,500 and if the fine is not paid according to the court, then there will be jail time on each charge. CRA made several requests for the missing returns before serving notices. These two individuals could have applied under the voluntary disclosure program to correct their tax affairs. They would not have been penalized or prosecuted if they contacted CRA before there was any action started on their file by the agency.
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Fairway Travel Inc was found guilty on July 8, 2009 for tax evasion. During the course of a CRA audit, it was discovered that there were non-deductible expenses claimed in the amount of $325,602. Consequently, the company evaded paying federal income taxes in the amount of $75,395. The Company was fined $150,000 in addition to taxes and interest.
If the company would have applied under the voluntary disclosure program before CRA commenced an action, then there would have been no penalties or interest. CRA can assess a penalty of up to 50% of the unpaid taxes due to gross negligence. In addition, the court on summary conviction can levy a fine from 50% to 200% of the tax evaded and sentence them to jail for two years.
Mark Feldstein Corporate Taxes, Tax Amnesty, Tax Convictions CRA, Tax Evasion, tax penalties, Unclaimed Income
Abosede Adeoye of Toronto was found found guilty of GST fraud on January 28, 2009. There were six counts of filing false GST returns. On April 30, 2009, Mr. Adeoye was sentenced to 90 days in jail, three years probation and fined $12,050. The fine represents 50% of the amount of false GST refund obtained and attempted to obtain.
CRA’s investigation revealed that Mr. Adeoye claimed $342,114 of business expenses and received a GST refund in the amount of $19,355 and he attempted to receive a GST refund of $4,595 for 1999 tax year. CRA’s analysis confirmed that Mr. Adeoye never operated a business.
Taxpayers who claim false returns are subject to a maximum penalty of 200% of the tax evaded and up to five years in jail. Mr. Adeoye could have come clean by applying under the voluntary disclosure program before CRA commenced their investigation. Penalties would have been waived and there would be no criminal prosecution.
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Joseph Kolic of Thunder Bay, pleaded guilty on February 17, 2009 on two counts of tax evasion in the Ontario Court of Justice in Thunder Bay. He was fined $24,449 which is 100% of the taxes that he attempted to evade. Mr. Kolic also had to pay civil reassessments amounting to $76,559 for federal taxes, provincial taxes, GST, penalties and interest.
Mr. Kolic operates Joe Kolic Masonry and failed to report business income in the amount of $74,230 on his personal return and his GST returns. The total tax evaded was $19,300 in personal tax and $5,149 in GST. The CRA investigation revealed that the unreported business income was deposited into the personal bank account. If Mr. Kolic would have decided to come clean; he could have applied under the voluntary disclosure program and he would not have been penalized or prosecuted. He would only have owed the income taxes, GST and interest.
Mark Feldstein Corporate Taxes, Tax Amnesty, Tax Convictions Tax Amnesty, Tax Evasion, Unclaimed Income
On January 9, 2009, Morley Brian Haynes of London Ontario, pleaded guilty in the Ontario court of Justice in London Ontario for failing to file income tax returns. Mr. Haynes was charged four times and was fined $1,000 per charge totaling $4,000.
In addition to fines, penalties and interest, individuals and corporations are still required to file past tax returns and pay the amount that is due. Mr. Haynes, was fined for not filing his 2003 and 2004 personal income tax as well as two quarterly GST returns for his business. Mr. Haynes filed the outstanding tax returns after CRA charged him.
Mr. Haynes could have applied under the voluntary disclosure program to avoid penalties and prosecution as long as he was not notified first by CRA. Once CRA contacts the tax payer, it is too late to apply under the voluntary disclosure program. The voluntary disclosure program provides a one time gift to a taxpayer to avoid penalties and prosecution. Under some circumstances, CRA will allow a second application under the program.
Mark Feldstein Tax Amnesty, Tax Convictions CRA, Tax Amnesty, Tax Evasion